Help to Save: Helping Low Income Earners to Save
The Government’s ‘Help to Save‘ scheme finally launched in September 2018! It is aimed at helping those on a lower income to build up their savings and could see them pocketing up to £1,200 in free money from the Government! The scheme is designed to help people start saving, and encourage people to save for an emergency.
What is Help to Save?
Help to Save is a new savings scheme for people on low incomes. This scheme will allow some low income earners to get a bonus of 50p for every £1 they save over 4 years. The scheme aims to help over 3 million people build up savings with a tax free bonus.
It’s easy access, so you can make withdrawals if you need to. And Help to Save is backed by the government so all savings in the scheme are secure!
How does it work?
Savers can pay in any amount from a minimum of £1 up to a maximum of £50 a month (£2,400 over a four-year period) – and the government will give you an extra £1,200!
You receive two separate bonuses: one after the first two years and the second after four years, paid into your bank account (not into the Help to Save account). Both bonuses would be 50% of the highest balance you’d saved – if your highest balance did not increase after the first bonus you won’t earn the second bonus.
There is no penalty if you’re not able to save every month, but this will affect your maximum bonus payment. If you miss a payment, or pay in under the £50 maximum, you can’t overpay or top up at a later date. The maximum you can pay in during any one month is £50.
Who is Eligible for the Help to Save Scheme?
An estimated 3.5 million people in the UK are on some form of Working Tax Credits and are therefore entitled to this new scheme! You can open a Help to Save account if you’re any of the following:
- Receiving Working Tax Credit
- Entitled to Working Tax Credit and receiving Child Tax Credit
- Claiming Universal Credit and your household earned £542.88 or more from paid work in your last monthly assessment period
- Have a current account with a bank or building society
You only need to be eligible on the day you apply for a Help to Save account. If your circumstances change, your Help to Save account will stay active and you can continue to save into it.
Is Help to Save right for you?
The Help to Save account is worth considering if you meet the eligibility criteria (mentioned above) and can afford to put away regular payments without it negatively affecting your living standards. If this sounds like you, this could be a really great opportunity to get some bonus savings from the government and increase your emergency fund.
It is unlikely that you will be able to earn more on your savings, than you’ll pay on your debts. So, it is recommended that you pay off your debts before you start to save.
You can open an account up until September 2023. You could always start saving later if you manage to clear your debts in the near future.
How do I apply for Help to Save?
You can find out more details about the scheme and apply for it on the HMRC website (or by calling 0300 322 7093). You can manage your Help to Save account online or through the free HM Revenue and Customs (HMRC) app.