Help to Save

The uncertainty caused by lockdown has lead many of us to re-evaluate our finances and appreciate the benefit of saving for a rainy day. Saving may seem a luxury for those on low incomes, and with interest rates paid on savings close to zero, some question the value of money paying money into an emergency fund, unlikely to see much growth over time.

However, what if you could earn 50p for every £1 saved? Too good to be true? This is one of those rare exceptions where it really is as good as it promises.

You may have heard of the ‘Help to Buy’ scheme to help homeowners get onto the property ladder, but have you heard of the Help to Save scheme? Help to Save is a government savings account helping those entitled to working tax credit or receiving Universal Credit to get the savings habit and receiving a healthy 50p bonus for every £1 saved over 4 years to boot!


How does it work?

The Help to Save scheme allows eligible savers to pay in up to £50 each calendar month over 4 years, and in return pays two tax-free bonuses over the period.

The first bonus is paid after 2 years on the highest balance saved over the period. Monthly savings of £50 a month for 2 years, would give a maximum bonus of £600.

The second bonus is paid after 4 years, paying 50% of the difference between the highest balance in the first 2-year period (years 1 & 2), and the highest balance in the last 2-year period (years 3 & 4).

If the maximum £50 per month is saved for four years, a maximum bonus of £1,200 could be earned to add to the £2,400 saved.


Need to access you saving?

No problem. Unlike many savings accounts if you need to dip into your savings before the end of the bonus period, the bonus will be paid on the highest balance in the period, not on the balance at the end. For example, if you had saved £800, but needed to withdraw £200 leaving £600 at the end, a bonus of £400 will be added (50% of £800). However, to ensure you earn a final bonus too, make sure you don’t make too many withdrawals. Your highest balance in the last 2-years must be more than the highest balance in the first 2-years.


Flexible saving

Making an active decision to save and paying yourself first are all good strategies for becoming a savings supremo. However, the reality for many is that income can be unpredictable in size and timing. The good news, is that the Help to Save scheme recognises the ups and downs of daily life, and allows payments of between £1 and £50 each month, which can be made multiple times up until the £50 max per calendar month is reached. Money can be paid in via direct debt, standing order or bank transfer.

Friends with benefits?

If you receive benefits as a couple you may both be eligible to open your own separate account. If you or your partner have less than £6,000 in personal savings, any bonuses earned through the Help to Save scheme will not affect your Universal Credit, Working Tax credit or housing benefit payments. The government backed scheme also gives you peace of mind knowing your savings are safe and secure.

Whether you are eligible to join the Help to Save scheme yourself or know friends or relatives who might be benefit, what are you waiting for? Spread the word, spread the love and spread the savings habit!


How to get started

Applicants for the Help to Save scheme require a UK bank account and will need to set-up access to the Government Gateway to apply.