Saving can be difficult and at the moment interest rates are very low, meaning it may seem like there’s not much in it for the saver. In times like these, it may be hard to find the incentive to start saving. But there are schemes available that can turn this around! Help to Save accounts are savings accounts available through a government-backed scheme that give linked 50% bonuses on every pound saved.
For those with a Help to Save account, every £1 saved will receive a bonus of 50p for four years. These bonuses are given at the end of the second and fourth years of holding the account and give you 50% on top of what you’ve saved yourself. For example, if somebody paid in £40 per month, at the end of two years they would have saved £480 and received an extra bonus amount of £240.
Payments into Help to Save accounts can be done by setting up a direct debit, bank transfer or standing order and are limited from £1 to £50 each calendar month. Importantly though, you don’t need to contribute every month if you don’t want to. Some months can feel tighter than others, so these accounts give you flexibility.
Help to Save is a one-time scheme that lasts four years to help people put some money away. All savings in this account are tax-free. This means the maximum amount saved over that time can be as much as £3,600. The savings plus bonuses are then transferred into the holder’s current account and it’s up to them whether they then want to continue saving using a different type of savings account.
The bonuses at the end of year 2 and year 4 are given based on the highest amount that has been saved into the account over that time, rather than the amount at those points. This means that if somebody was consistently saving, but then had to draw out some cash in an emergency, they would not lose out on part of their bonus. The account essentially rewards Help to Save account holders just for the act of saving itself!
Who can have a Help to Save account?
Help to Save accounts are available to people who are receiving Universal Credit or those entitled to Working Tax Credits. For those who receive Universal Credit as a couple, both partners are allowed to set up separate Help to Save accounts. Even if you were to stop claiming any benefits while you had a Help to Save account, you could still keep your account open.
If you already have savings, you can still open a Help to Save account, but only if you have existing savings of no more than £6,000.
Opening one of these accounts does not affect your Universal Credit payments or the amount of Working Tax Credits you’re due.
How to set up a Help to Save account
To apply for a Help to Save account, simply go through the Government Gateway. You’ll then be asked to provide bank details, information about your personal circumstances and your National Insurance number.
Between August 2020 and January 2021, 42,000 Help to Save accounts were opened and the amount saved by the full 264,800 account holders exceeded £40 million! Saving can be a difficult practice to start and a little bit of incentive can go a long way in order to start people on that journey.
Do you have any tips for saving? Have you been saving with a Help to Save account? Get in contact and tell us all about it!
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