Money News:Help to Save account - 50p for every £1 you save

Account offers working people on low incomes a 50% bonus

Over 132,000 people have signed up to the government-backed savings account Help to Save, depositing more than £31.4 million.

The account offers working people on low incomes a 50% bonus on what they save. Rewarding them with 50p for every £1 they put away. Over four years, a maximum bonus of £1,200 is available on savings of up to £2,400.

Statistics published on 30 August show that those using help to save accounts are already eligible for bonuses totalling around £14 million. The accounts make saving affordable, achievable and worthwhile. Some participants now see themselves as ‘savers’ rather than ‘spenders’.

The Economic Secretary to the Treasury, John Glen, said:

“Saving shouldn’t be seen as a luxury but as an essential part of planning for the future.

“That’s why I launched the Help to Save scheme last year, and it’s been great to see so many people using it to put money aside for themselves and their loved ones.

“Around 3.5 million people could benefit from the scheme, so if you’re eligible but haven’t yet opened an account, you should take a look. Saving comes with a 50% government bonus and even a small amount could help you to be more prepared for the future.”

50% tax-free bonus after two years

Help to Save helps those on lower incomes build up a ‘rainy day’ fund, and encourages a long-term savings habit. How much is saved and when is up to the account holder, and they don’t need to pay in every month to get a bonus.

Help to Save is available to working people on Tax Credits, or Universal Credit claimants with a minimum earned income equivalent to 16 hours per week at the National Living Wage in their last assessment period.

Account holders can save between £1 and £50 every calendar month and accounts last for four years from the date the account is opened.

After two years, savers get a 50% tax-free bonus on the highest balance they’ve achieved. If they continue saving, they could receive another 50% tax-free bonus after a further two years.

On maximum savings of £2,400 over four years, the overall bonus would be £1,200.

To check eligibility, apply, and get more information savers can visit www.gov.uk/helptosave or use the HMRC app.