New Help to Save scheme launched last week
Monday 17th September 2018
A new government scheme was launched last week to help working families on tax credits or Universal Credit build up savings. The new Help to Save scheme rewards savers, with the government giving you 50p for every £1 that you manage to save.
You can save up to £50 a month into a special 'Help to Save' account, and for every £1 you have saved the government will give you a 50% bonus. At the end of the two years, you can either close your account and get the 50% bonus, or you can choose to keep the account for another two years, again saving between £1 and £50 every month. This means you might get another bonus at the end of the four years.
Money paid into the account can be withdrawn at any time, although this might affect the amount of bonus you receive.
I am eligible for a Help to Save account?
To open an account, you need to be resident in the UK and either:
- Claiming Universal Credit and have earnings from employment of £542.88 or more for the last month
- Be getting tax credit payments and be eligible for working tax credit. You are eligible for working tax credit if you are working 16 hours a week or more and are either a lone parent or have a partner who is eligible for Carer's Allowance. Otherwise couples must normally be working at least 24 hours a week between them (with one partner working at least 16 hours).
If you are a couple who meet these tests, you can each open up an individual account. It's not possible to open a joint account as a couple.
How do I open an account?
You need a Government Gateway account to apply. If you don't have one, you can set one up when you apply. You can do this via the GOV.UK website. You will be able to open an account up until September 2023.
Will the savings in my Help to Save account affect my benefits?
If the money in your account is the only capital you have it won't be enough by itself to affect your benefits. If you have other capital, the money in your account will be taken into account as capital alongside these other savings.
If your total savings are more than £6,000 this is likely to mean that you will see a reduction in means-tested benefits you receive such as Universal Credit or housing benefit. While the money you have saved in your account will be counted as capital, the bonus paid by the government will be ignored for benefits and tax credits.