‘Help to Save’ available for people on low incomes.

Launched last year by the government the ‘Help to Save’ scheme gives up to £1200 for people on low incomes.

What is Help to Save?

Help to Save is a new savings scheme for people on low incomes who are claiming certain benefits. Help to Save gives you a bonus payment from the government of up to 50% (half) on savings paid into the account. This guide explains who can get a Help to Save account, how you can pay money into them and how the bonus payment works.

How it works.

Help to Save is a type of savings account. It allows certain people entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50p for every £1 they save over 4 years.

Help to Save is backed by the government so all savings in the scheme are secure.

How payments work.

With Help to Save, you can save between £1 and £50 each calendar month. You do not have to pay money in every month.

Paying money into your Help to Save account can be done by debit card, standing order or bank transfer.

You can pay in as many times as you like, but the most you can pay in each calendar month is £50. For example, if you have saved £50 by 8 January you will not be able to pay in again until 1 February.

You can only withdraw money from your Help to Save account to your bank account.

How bonuses work.

You get bonuses at the end of the second and fourth years. They’re based on how much you’ve saved.

What happens after 4 years?

Your Help to Save account will close 4 years after you open it. You will not be able to reopen it or open another Help to Save account. You’ll be able to keep the money from your account.

You can close your account at any time. If you close your account early you’ll miss your next bonus and you will not be able to open another one.

What you’ll get.

You can earn 2 tax-free bonuses over 4 years. You’ll get any bonuses you’ve earned even if you withdraw money.

After your first 2 years, you’ll get a first bonus if you’ve been using your account to save. This bonus will be 50% of the highest balance you’ve saved.

After 4 years, you’ll get a final bonus if you continue to save. This bonus will be 50% of the difference between 2 amounts:

• the highest balance saved in the first 2 years (years 1 and 2)
• the highest balance saved in the last 2 years (years 3 and 4)

If your highest balance does not increase, you will not earn a final bonus.

The most you can pay into your account each calendar month is £50, which is £2,400 over 4 years. The most you can earn from your savings in 4 years is £1,200 in bonus money.

Your bonus is paid into your bank account, not your Help to Save account.

Example – You pay in £25 every calendar month for 2 years. You do not withdraw any money. Your highest balance will be £600. Your first bonus is £300, which is 50% of £600.

In years 3 and 4 you save an extra £200 to grow your highest balance from £600 to £800. Your final bonus is £100, which is 50% of £200. Even though you withdrew some money after your balance was £800, this does not affect your bonus.

What happens if you withdraw money?

If you withdraw money it will be harder for you to:

• grow your highest balance
• earn the largest possible bonuses

Withdrawing money could mean you are not able to earn a final bonus – depending on how much you withdraw and when.

You can open a Help to Save account if you’re any of the following:

• receiving Working Tax Credit
• entitled to Working Tax Credit and receiving Child Tax Credit
• claiming Universal Credit and your household earned £569.22 or more from paid work in your last monthly assessment period

If you get payments as a couple, you and your partner can apply for your own Help to Save accounts. You need to apply separately.

You also need to be living in the UK. If you live overseas, you can apply for a Help to Save account if you’re either a: Crown servant or their spouse or civil partner or a member of the British armed forces or their spouse or civil partner

If you stop claiming benefits.

You can keep using your Help to Save account.

How it will affect your benefits?

Saving money through a Help to Save account could affect your eligibility for certain benefits and how much you get.

Universal Credit

If you or your partner have £6,000 or less in personal savings this will not affect how much Universal Credit you get. This includes any savings in your Help to Save account.

Your Help to Save bonuses will not affect your Universal Credit payments.

Working Tax Credit

Any savings or bonuses you earn through Help to Save will not affect how much Working Tax Credit you get.

Housing Benefit

If you or your partner have £6,000 or less in personal savings this will not affect how much Housing Benefit you get. This includes any savings in your Help to Save account.

Your Help to Save bonuses will not affect your Housing Benefit payments.

• How to apply.

You need a Government Gateway user ID and password to apply. If you do not have a user ID, you can create one when you apply.

You’ll be asked to provide your UK bank details when you apply.

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