An additional three million people could potentially benefit from the extension of a unique UK Government savings scheme designed to help those on a low income after HM Revenue and Customs (HMRC) recently announced that the Help to Save scheme, which was due to end this September, has been extended to April 2025.
Help to Save offers an unbeatable 50 per cent bonus payment worth up to £1,200 over four years (up to £300 for each year). Since its launch in September 2018, more than 359,200 people on Universal Credit and Tax Credits have opened a savings account.
Under the scheme, savers can deposit between £1 and £50 a month into their account and will receive a UK Government bonus in the second and fourth years - even if money has been withdrawn. Someone saving £2,400 - the maximum amount they could deposit over four years - would receive a £1,200 bonus paid directly into their bank account.
Commenting on the extension, Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Help to Save can encourage positive saving habits - no matter what you can afford to save - and the 50 per cent government bonus payment can help savers when they need it most.”
Andrew Griffith, Economic Secretary to the Treasury, said: “Millions of people could benefit from a boost to their savings through Help to Save and thanks to our Spring Budget reforms the scheme has been extended until 2025. Whatever amount you can save will trigger a top up from the Government, so take advantage and apply today.”
Eligible savers can find out more and how to apply on GOV.UK here, or via the HMRC app. People may be eligible if they receive Working Tax Credit or Universal Credit - more details in our guide below.
What is Help to Save?
The Help to Save account is a state-operated scheme which millions of people on a low income, or claiming certain benefits, could be eligible to join. In simple terms, for every £1 you put in you get a 50p bonus over a period of up to four years.
However, you can also take the money out from the account at anytime, but there’s a catch - the bonus payout is based on the highest amount of money you put in.
Even if you’re not able to set aside money for savings at the moment, open an account anyway, while you are eligible to do so, because you don't have to put any money in.
How payments work
You can save between £1 and £50 each calendar month - you don’t have to pay in every month. Payments can be made by debit card, standing order or bank transfer.
You can pay in as many times as you like, but the most you can pay in each calendar month is £50. You can only withdraw money from your Help to Save account to your bank account.
How bonuses work
You get bonuses at the end of the second and fourth years - these are based on how much you have saved.
What happens after four years?
Your Help to Save account will close four years after you open it. You will not be able to reopen it or open another Help to Save account. You can close your account at any time. If you close your account early you will miss your next bonus and you will not be able to open another one.
Eligibility
You can open a Help to Save account if you are:
- receiving Working Tax Credits
- receiving Child Tax Credits and are entitled to Working Tax Credits
- receiving Universal Credit and they (with their partner, if it is a joint claim) had take-home pay of £722.45 or more in their last monthly assessment period
HMRC has prepared a video on YouTube to help customers find out more about Help to Save.
Getting payments as a couple
You and your partner can apply for your own Help to Save accounts - you need to apply separately. You also need to be living in the UK.
Will it affect my benefit payments?
You can continue to receive Tax Credits or Universal Credit while saving with Help to Save.
What happens if I stop claiming benefits?
You can keep using your Help to Save account until the four years ends.
For more information and to set up your Help to Save account, visit the GOV.UK website here.
To keep up to date with the latest benefits news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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