MILLIONS of people on low incomes are missing out on a saving scheme that could DOUBLE their cash.
The Help to Save scheme gets you a 50% bonus from the Government on the amount you save.
Millions of people are missing out on a savings scheme that could get you a 50% bonus
Putting aside the maximum amount could earn you a £1,200 bonus over four years.
But millions of people don’t know the accounts exist, or might not realise they’re eligible for one.
Tom Selby, head of retirement policy at AJ Bell, said just 2.5% of people who qualify for Help to Save are signed up.
That’s despite a whopping 5.6million people on benefits such as Universal Credit being eligible for the accounts.
Here’s everything you need to know about Help to Save:
What is Help to Save?
Help to Save is a government-backed scheme aimed at helping people on a low income to start saving.
It gives you a 50p bonus for every £1 you set aside – and you can save a maximum of £50 a month.
Around 359,000 Help to Save accounts have been opened since the scheme launched in 2018, but more than 48,000 of these have no been paid in to.
Around 143,000 people are saving the maximum £50 a month into the accounts.
Tom said: “These people are on track to get a £1,200 savings top up – the money could provide them with a rainy day fund and become a stepping stone to saving and investing more in the future.
“But these figures show that just a fraction of low income households are making the most this generous scheme.”
Who is eligible?
To qualify for a Help to Save account, you’ll need to meet one of the following criteria:
- Receive Working Tax Credit
- Are entitled to Working Tax Credit and receive Child Tax Credit
- Claim Universal Credit and you (with your partner if it’s a joint claim) earned £604.56 or more from paid work in your last monthly assessment period
The accounts are one per person, not one per household, so if you and your partner both qualify, you can each open a separate account.
You will need to be living in the UK to be eligible, and if you stop claiming benefits you can still use your account.
Tom said: “The scheme has been poorly advertised, so lots of people aren’t aware of the perks on offer if they were able to put a bit away each month.
“But this is coupled with the fact that a lot of people who qualify for the scheme, just don’t have any spare money to put away each month.”
How does it work?
You can then save up to £50 a month, and you’ll get a 50% bonus on the amount you set aside.
The bonus is paid after two years, and again after four years.
That means you could pocket a bonus of up to £1,200 if you saved the maximum amount each month for four years.
Savers will get a 50% bonus on the highest balance they achieved during the first two years – so even if you need to take some money out of the account, you don’t get penalised.
If you save the maximum amount for two years, you’d hit £1,200 – so you’d get a £600 bonus.
And if you managed to do the same for the next two years as well, you’ll get the same, meaning your today bonus over four years would be £1,200 and you’d have £2,400 saved too – giving you a total of £3,600.
What else to consider?
Of course, it’s not for everyone. In a cost of living crisis, many people can’t afford to save any cash and this account is best for those who can set some money aside each month.
But you don’t have to commit to a set amount, so it’s still worth opening an account if you qualify – and you could save a pound or two whenever you’re able to, and still get a 50% bonus on what you manage to save.
Tom said: “For anyone who does have spare cash at the moment, this is a hugely valuable incentive to take advantage of.”
Do also bear in mind that if your personal savings reach more than £6,000, it could affect your eligibility for some benefits.
You apply for an account through the government website – you’ll need a Government Gateway user ID and password. Alternatively you can apply by calling 0300 322 7093.
How does it compare to other savings accounts?
Help to Save is undeniably the most generous savings account out there, with an unbeatable 50% bonus.
It has the added perk of being easy-access, meaning you can access your money at any time if you need to, and you won’t have to forfeit your bonus.
Tom said: “The flexibility of the scheme is one of its massive perks as savers can withdraw their money whenever they need it and they will still get a bonus equivalent to half of their highest balance.
“It means you aren’t penalised if you need to take out some cash.”
By contrast, the best easy-access savings account on the market currently pays interest of just 1.81%.
Lifetime Isas are another government-backed alternative, which are arguably more popular.
These let you save up to £4,000 a year and you get a 25% bonus if you use the money either to buy your first home or at retirement.
While these accounts don’t have as big a bonus, they do let you save more – and anyone aged 18-39 can open them, you don’t need to be on benefits to qualify.
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