Martin Lewis gives advice on ‘Help to Save’ government scheme
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As the year draws to an end, many families will be looking at ways to save for the year ahead, and ways they can make extra cash. The scheme was launched by HMRC in 2018 to encourage those on low incomes to start saving money and putting it away
The Government match people’s contributions as an incentive to start saving. For every 50 pence people put in, they will save £1.
The Help to Save scheme is available to 3.5 million British people who are claiming Working Tax Credits, Child Tax Credits or Universal Credit.
As the furlough scheme has ended, many people have faced job uncertainty through reduced working hours and may find themselves having to claim financial support through the Department for Work and Pensions (DWP) or HMRC to help them with the daily costs of living.
However, many people claiming benefits are not aware of this scheme specifically designed to help them by boosting their savings by 50 percent.
With the scheme, people can save between £1 and £50 each month.
For example, if someone has saved £50 by January 16th, they will not be able to pay into their account again until February 1.
To receive a bonus of £1,200, someone would need to put away £50 a month for four years.
The total amount saved over the four years would be £2,400, which the government would then add £1,200 to.
Britons get bonuses at the end of the second and fourth years and these are based on how much someone has saved.
People can close their accounts at any time but if they do this early, they could miss out on their next bonus and will not be able to open another one.
After four years, the Help to Save account will close. People cannot reopen it once this happens.
UK residents are entitled to open a Help to Save account if they are:
• Receiving Working Tax Credit or Child Tax Credit
• Entitled to Universal Credit and have earned income of at least 16 hours a week at the National Living Wage (from April 1, 2021, this is equivalent to £617.76 a month) in the previous assessment period.
Those people receiving Universal Credit and Tax credit will still receive their benefits while saving with Help to Save.
People that get payments as a couple can apply for their own Help to Save accounts separately.
Even though a lot of people are missing out on this bonus, the ones with an account are taking full use of it, saving the maximum of £50 per month.
Latest statistics from June 2021 show that more than 284,000 accounts had been opened with 91 percent of account holders saving the maximum of £50 per month.
An HMRC spokesperson said: “The Help to Save scheme is specifically designed to support working households on low incomes to build a rainy-day savings fund while encouraging a regular, long-term savings habit.
“They can save between £1 and £50 each month and earn two tax-free bonuses over four years, worth up to £1,200.
“More than 90 percent of account holders are saving the maximum £50 each month.
“It is quick and easy to set up an account, just search ‘help to save’ on GOV.UK.”
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