How to mitigate the rising cost of travel to work
Anyone who commutes in the UK - around 86% of the working population - understands how the cost of travel to work puts pressure on their budgets.
Rail fares remain high, even despite the cap put on regulated train tickets in March this year. The UK is also experiencing volatile fuel prices, with diesel prices at a record high of 199.5 pence per litre on October 5, according to Government data, surpassing the previous high from July 2022. Beyond fares and fuel, hidden expenses such as station parking and onward travel can push the total cost even higher.
In this landscape, employers need to consider how workplace benefits can help employees manage their travel costs. There are many ways to help ease the pressure, from public transport support and organised car sharing to flexible working arrangements.
With the cost of living crisis continuing, every little helps when it comes to keeping travel costs down. However, it’s important to remember that commuting support needs to reflect how people actually get to work. Different solutions will be useful for a rural shift worker, a rail commuter in the city, or someone living within cycling distance to work. We look at some of the key benefits.
Discounted public transport and season ticket loans
A study from House Hunting Tools found that the annual average cost of regional train travel is £1,650-£2,760 for employees in the office three days a week. In London, this figure increases to £3,050-£5,500.
For those commuting by train, an annual season ticket may represent a significant upfront expense, particularly for employees commuting from outside cities.
Employers can help employees combat rising commuting costs by offering staff discounts, subsidised bus passes and reduced public transport fares. Even relatively small savings on regular journeys can add up.
Another option is offering season ticket loans through salary sacrifice, which allows employees to spread travel expenses over time. Buying an annual ticket can work out cheaper than paying for individual journeys, depending on the route and how frequently they travel, but it’s a significant upfront cost to face.
This can make commuting costs more predictable, helping employees manage their monthly budgets. Employers must ensure they explain the repayment terms clearly, including what happens if an employee leaves the organisation before the loan has been repaid.
By combining negotiated discounts, targeted subsidies and season ticket loans, employers can offer practical support that reflects employees’ different travel needs and financial circumstances.
Electric car schemes
For employees who rely on a car to commute, an electric vehicle (EV) salary sacrifice scheme can help to manage costs more predictably and support financial resilience. Often no upfront deposit is required, which can broaden employees’ access to electric cars.
Under a salary sacrifice scheme, the cost of the EV is paid directly out of the employees’ gross salary via payroll. It usually also packages costs such as insurance, servicing, maintenance and breakdown cover into one monthly -amount to help employees budget more effectively.
More affordable options such as pre-loved cars can widen access for employees. They can gain access to high-spec, nearly-new electric vehicles at affordable monthly amounts, which might otherwise be beyond their budget when buying new.
EV salary sacrifice can also potentially lower income tax and National Insurance contributions for employees, while electric cars benefit from comparatively low benefit-in-kind tax rates.
For employers, the key is to present EV salary sacrifice as one option within a broader travel and financial wellbeing strategy. Clear information about costs, tax implications and eligibility can help employees decide whether the scheme is genuinely suitable for their circumstances.
Cycle to work schemes
For employees who live within a reasonable commuting distance, cycling can be a more affordable and environmentally friendly alternative to driving or using public transport.
Cycle to work schemes allow employees to obtain a bike through salary sacrifice, spreading the cost and reducing the upfront expense. Income tax and National Insurance savings may also make cycling more affordable than buying a bike outright.
Once they have a bike, employees can benefit from relatively low commuting costs, although maintenance, repairs and secure storage should still be factored into their budgets. Combining cycling with public transport can also help reduce the cost of longer journeys.
Employers can make cycling more practical by providing secure bike storage, showers and maintenance support, helping employees incorporate cycling into their daily commute.
Naturally, cycling will not be practical for everyone, particularly those with long commutes or shift patterns that make cycling difficult. Employers should therefore offer cycle to work alongside other travel benefits, ensuring employees have a choice of support that reflects their individual circumstances.
Supplied by REBA Associate Member, Tusker
Tusker is the UK’s leader in salary sacrifice cars. Part of Lloyds Banking Group, it has more than 15 years’ experience in offering an affordable way for employees to drive a new, fully insured, and maintained car. Its scheme, which is available to over 1.8 million UK employees, offers a range of options, from pure electric cars to hybrids and even traditional petrol and diesel vehicles. It provides a tailored scheme for organisations’ individual needs.
