This Government scheme is aimed at people on low incomes, specifically Universal Credit, in hopes with helping them build up a savings habit.
The scheme – which was set to expire in September this year – is now to continue until April 2025.
During the Martin Lewis Money Show, the money saving expert explained how the scheme works.
He said: “If you’re eligible, you can put up to £50 a month in over two years, and then at the end, you can get 50 percent of the highest amount in.”
This means if a person deposits the full £50 each month for the four years they will deposit a total of £2,400, and acquire a £1,200 bonus.
People can earn two tax-free bonuses over four years. They’ll get any bonuses they’ve earned even if they withdraw money.
After their first two years, they’ll get a first bonus if they’ve been using their account to save. This bonus will be 50 percent of the highest balance they’ve saved.
After four years, they’ll get a final bonus if they continue to save. This bonus will be 50 percent of the difference between two amounts:
- the highest balance saved in the first two years (years one and two)
- the highest balance saved in the last two years (years tree and four)
Britons can withdraw from the account. If they withdraw money it will be harder for them to grow their highest balance and earn the largest possible bonuses.
People can open a can open a Help to Save account if they’re receiving:
- Working Tax Credit
- Child Tax Credit – and you’re entitled to Working Tax Credit
- Universal Credit and you (with your partner if it’s a joint claim) had take-home pay of £722.45 or more in your last monthly assessment period
If they get payments as a couple, them and their partner can apply for their own Help to Save accounts. They need to apply separately.
Savers also need to be living in the UK. If they live overseas, they can apply for an account if they’re either a:
- Crown servant or their spouse or civil partner
- member of the British armed forces or their spouse or civil partner
Saving money though a Help to Save account could affect one’s eligibility for certain benefits and how much they get.
If they or their partner have £6,000 or less in personal savings this will not affect how much Universal Credit they get. This includes any savings in their Help to Save account.
Their Help to Save bonuses will not affect their Universal Credit payments.
