For those who are unaware of this scheme, this is a government backed savings scheme for those on a low income and working this scheme has been around for over a year but has not been promoted widely apart from Martin Lewis Money Savings Expert. For others who are taking part in the 2020 challenge consider this another means of saving money with a high return.
Her Majestys Revenue and Customers (HMRC) administer the Help to Save program. It’s a type of government savings account that rewards those on a low income with a 50% tax-free bonus.
To qualify you must be in work and getting one of the qualifying benefits to open an account. But, it means you could get a bonus of 50 pence for every £1 that you save over a 4 year period.
The government apply the bonuses at the end of the second year and the fourth year anniversary of the account. You can save between £1 and but no more than £50 each calendar month. You do not have to pay money in every month.
You can pay money into your Help to Save account by debit card, standing order or bank transfer. You can pay in as many times as you like but remember the most you can pay in each calendar month is £50. Any amount that you have saved in the Help to Save account is safe and secure. Money invested by low earners is completely backed by the government.
There are some differences to a traditional deposit savings account. You cannot withdraw cash from your Help to Save account. Instead, you would need to withdraw it from your bank account.
What happens after 4 years
Your Help to Save account will close 4 years after you open it. You will not be able to reopen it or open another Help to Save account. You’ll be able to keep the money from your account. You can close your account at any time. If you close your account early you’ll miss your next bonus and you will not be able to open another one.
Help to Save Eligibility Criteria
To join the Help to Save scheme and open an account you must be (either):
- Entitled to Working Tax Credit and getting either Child Tax Credits or Working Tax Credit payments.
- Claiming Universal Credit and have a household income of at least £569.22 in the last monthly assessment period.