MILLIONS of people on Universal Credit and other benefits are still missing out on a bonus worth up to £1,200 from the Help to Save scheme.
As part of Help to Save, you get 50p for every £1 you set aside into a special account, up to a maximum bonus of £1,200 over four years.
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To get the maximum bonus, you would need to save £2,400 over the four years.
Around 264,800 people have opened a Help to Save account since its launch in September 2018, according to new figures released by the government today.
It means millions of people are still missing out on opening an account and cashing in on the tax-free bonuses.
When the Help to Save scheme first opened, more than 3.5million people were estimated to be eligible for an account.
Best savings accounts for your cash right now
HELP to Save offers a higher effective rate of interest than what you’d earn with a regular savings account or bank account.
For example, the top easy-access savings accounts right now are offering rates of 0.50% AER, according to Money Facts.
This means for £1,000 invested for 12 months at an interest rate of 0.50% AER, you’ll earn approximately £5.00 interest.
The top fixed rate accounts offer 1.10% AER on your savings and you can’t touch your money for five years.
In terms of instant access cash ISA accounts, the top rate is 0.40% AER.
However, Help to Save is only really useful for people who can actually afford to put away money each month, so the scheme isn’t for everyone.
Of the number of accounts open as of today, only 216,950 have had money deposited into them.
This time last year, around 163,000 people had signed up to Help to Save, compared to just 90,000 people in 2019.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The first Help to Save bonuses were a shot in the arm for savers who had been laid low by the pandemic.
“Early birds who snapped up a Help to Save account in the first few months will have received their bonus during some of the toughest months of the pandemic.
“If you qualify for the scheme, it’s worth taking the time to consider if there’s any way you can afford to put away any money each month.”
Who is eligible for Help to Save?
Help to Save accounts are available to people who:
- Receive Working Tax Credit
- Are entitled to Working Tax Credit and receive Child Tax Credit
- Claim Universal Credit and you (with your partner if it’s a joint claim) earned £604.56 or more from paid work in your last monthly assessment period
You and your partner can apply for separate Help to Save accounts, but you’ll both need to apply individually.
Savers also need to be living in the UK to be eligible for the scheme.
How much can you save through Help to Save?
You can save between £1 and £50 every calendar month and accounts last for four years from the date opened.
After two years, savers get a 50% tax-free bonus on the highest balance they’ve achieved.
If you continue saving, you get another 50% tax-free bonus after a further two years.
The most you can earn from your savings in four years is £1,200 in bonus money.
As Help to Save is an easy-access account, you can make withdrawals – but doing this may affect your bonus.
You should also note that if your Help to Save cash pushes you over £6,000 in personal savings, it could affect your eligibility for some benefits.
How to apply for Help to Save
You can apply for an account via Gov.uk but you need a government gateway user ID and password.
If you do not have a user ID, you can create one when you apply.
For those who don’t have access to the internet, you can still get an account – just call 0300 322 7093.
Be aware that you’ll be asked to provide your bank details when you apply as the bonus is paid into your bank account rather than into the savings account.
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