Hi all, Short blog post about the above scheme which is currently underutilised by everyone there has not been much publicity scheme which was launched the end of last year. If you are eligible take advantage of this scheme sooner rather than later.
This scheme was launched in September 2018 to help those on a low-income boost their savings this scheme is underutilised approximately 3.5m employees claim benefits to increase their income but so far only approximately 80K have opened an account!
The Government will boost savings by 50 per cent at the end of two years
The Help to Save scheme, is a government backed savings account, it can help those on low incomes boost their savings by 50p for every £1 you save.
If you’re entitled to Working Tax Credit or Universal Credit you could be eligible to open a Help to Save account. And, because it’s a government scheme all your money is secure.
How does Help to Save work?
Once your Help to Save account is open it’s up to you how much and how often you save. To get the tax-free bonus you don’t need to save a minimum amount or even save every month. The maximum you can save is £50 a month.
The account stays open for four years after which it closes. You can withdraw the money from your savings at any time and it’ll be paid into your bank account.
You can also close the account early, however as you’re only allowed one Help to Save account you won’t be able to open another in the future. If you close the account early you won’t be eligible for the next bonus that’s due.
How is the Help to Save bonus paid?
You can earn two tax-free savings bonuses that’ll be paid into your bank account (not your Help to Save account). The bonus is based on how much you’ve saved. Even if you’ve withdrawn money from your savings, you’ll could still be entitled to a bonus. However, this will reduce the maximum bonus by doing this.
The first bonus is paid at the end of the second year and will be 50% of the highest balance saved. So for example if you saved the maximum £50 every month at the end of the two years you’d have saved £1200. Your bonus would be 50% of that – £600.
The second bonus would be paid at the end of the fourth year and is 50% of savings you pay into the account above the highest balance you’ve saved. So if you continue to save £50 a month you’ll be adding another £1200 to your savings pot and will receive another £600 bonus.
If you withdraw all the money you save after two years and then carry on saving you won’t get a bonus in year four because your highest balance would never go over £1,200.
Now who can open a Help to Save account?
You can open a Help to Save account if you’re living in the UK and:
- entitled to or receiving Working Tax Credit or Child Tax Credit payment, or
- claiming Universal Credit and your household income in you last monthly assessment period was £542.88 or more. Your Universal Credit payments don’t count as part of your household income.
If either you and your partner have a household award of tax credits or Universal Credits then you’ll be allowed to open a Help to Save account each.
If you stop claiming benefits you will still be able to keep using your savings account.
You can also apply for the account if you live overseas and you’re a:
- Crown servant or their spouse or civil partner
- Member of the British armed forces or their spouse or civil partner
Below is the link to the official site to access the account.
Get help with savings if you’re on a low-income (Help to Save)
How to apply
You need a Government Gateway user ID and password to apply. If you do not have a user ID, you can create one when you apply.
To start using your Help to Save account, you’ll need to provide your UK bank details.
First time buyers
First-time buyers can also take advantage of the Help to Buy Isa which sees the Government boost savings by 25 per cent on sums up to £1,200.
But you’ll need to open an account soon because there are reports that the government intends to scrap this by the end of the year. Use the above link to take you to the government website.
Good Luck and hope you find this useful!!