Saving for a rainy day with Help to Save
The government’s Help to Save scheme is proving a hit with low-income savers. Already, over 90,000 people have signed up to the new savings account. Read more about the benefits of this new scheme.
Over £13 million deposited already
The government’s savings scheme appears to have enjoyed a healthy start. Over 90,000 lower-income earners have already taken advantage, depositing over £13,000,000. This number is growing to the tune of 250 new savers each day.
How do low-income earners benefit?
Help to Save is a special savings account aimed at working people on low incomes. The Help to Save account is for
– working people on tax credit
– people who claim universal credit and who earn a minimum earned income equivalent to 16 hours per week at the national living wage in their last assessment period.
Savers are allowed to deposit a maximum of £50 per month. It seems most are taking full advantage, with monthly deposits averaging £47. Doubtless, the most attractive aspect of the scheme is the 50% bonus that’s earned after four years of saving. This bonus is payable to a maximum of £1,200 on savings of £2,400 over a four-year period.
Why did the government introduce Help to Save?
Help to Save is aimed at those on lower incomes to help them build up a ‘rainy day’ fund. The scheme gives excellent rewards to diligent savers. It also gets them into the saving habit. Savers are handed the responsibility and freedom to decide for themselves how much to put aside each month. If they want to miss a few months, they’re free to do so. Their bonus won’t be affected if they do miss payments.
Here at Most Money Accountants, we hold the strong belief that savings are a critical part of planning for the future. So many people aren’t natural savers. With borrowing on credit reaching dangerous levels, we’re gratified to witness so many savers, often young adults, getting into the habit with Help to Save. If you think you might be eligible, it’s really worth taking a close look.
John Glen is the government’s Economic Secretary to the Treasury. He supports our view. ‘Even if you can only save a small amount each month, it will help you prepare for whatever the future brings, and you’ll get a 50% boost on your savings from the government, too.’
Help to Save account holders can save between £1 and £50 every calendar month, with accounts expiring four years from the date they were opened. As a saver, you receive a 50% tax-free bonus on the highest balance you’ve achieved, after 2 years. Then, if you continue saving, you could receive another 50% tax-free bonus after a further two years, giving you maximum savings of £2,400 over four years with an overall bonus would be £1,200.
Ask the experts
Do you think you might qualify for the Help to Save scheme? We have all the facts here. Why not find out more and get in touch?
This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.