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As the cost of living crisis continues, Help to Save could help Brits to get an extra £1200 added to their savings by the government over the next four years.
In light of the extension of the Help to Save scheme, personal finance expert Lucinda O’Brien has given her insights into what this means for Brits: “For those on Universal Credit, the Spring Budget also highlighted Help to Save accounts and its attractive 50% bonus scheme.
“The good news is that applicants can now apply for an account until April 2025 as the government is keen for low-income earners to have a savings pot for a rainy day.
“The Help to Save scheme was due to end in September after its launch in 2018. However, the scheme is now even more important as many people are struggling with the cost of living crisis and finding it increasingly difficult to save each month.”
How much can I save in a Help to Save account?
Lucinda O’Brien says, “A Help to Save account is backed by the government which means that your money will be safe and secure. The account then allows you to save from £1 to £50 each month, but you don’t have to pay money in every month and you can pay in as many times as you wish – until you reach the £50 limit.
“The account will then reward you for saving with a bonus of 50p for every £1 that’s saved over four years. The bonus is paid at the end of the second and fourth years and it’s based on how much you’ve saved.
“For example, if you saved £50 a month for two years, you would get a tax-free bonus of £600. This means that you could end up with a pot of savings totalling £1,800 by 2025.
“If you decide to carry on saving, you’ll then receive another tax-free bonus of £600 after another two years, meaning you’ll receive £1,200 after four years of saving.
“However, it’s important to note that although you can close the account at any time, if you close the account early you might miss out on the bonus and you won’t be able to open another account.
“You can qualify for a Help to Save account if you live in the UK and you’re receiving Working Tax Credit, Child Tax Credit (and entitled to Working Tax Credit) or Universal Credit and you had a take-home pay of £658.64 or more in your last monthly assessment period.”
Who is eligible for Help to Save?
“In the Money.co.uk savings report, it was discovered that as of March 2022 there had been almost 360,000 Help to Save accounts opened in the UK. This means that millions of people are missing out on the opportunity to earn a bonus from the government by saving a little each month.”
How to Apply
If you think you might be eligible for the Help to Save scheme, just visit gov.uk and enter your Government Gateway user ID and password to apply. You’ll also be asked to provide your UK bank details as you pay money into the account via either a debit card, standing order or bank transfer.