The Help to Save scheme can assist those on low incomes to boost their savings. The scheme was launched in September 2018 and new figures just published by HMRC have revealed that over 163,000 people have signed up depositing more than £53 million.
The scheme is open to working people who receive tax credits or universal credit and with a minimum earned income equivalent to 16 hours per week at the National Living Wage in their last assessment period.
Account holders using the scheme can save between £1 and £50 every calendar month for up to two years and will then receive a 50% Government bonus. Payments under the scheme can be made by standing order on a weekly, fortnightly, or monthly basis and one-off payments by debit card are also possible.
Account holders can then continue saving under the scheme for a further 2 years and receive another bonus. This could result in account holders receiving a bonus of up to £1,200 on maximum savings of £2,400 for 4 years from the date the account is opened. After 4 years the Help to Save account will be closed and savers will not be able to reopen it or open another Help to Save account. The account balances are expected to be rolled over into successor accounts.
There are no limits on how the money used can be spent but it is hoped that the money will be saved for urgent costs. Money paid into the account can be withdrawn at any time, but this could affect the size of the bonus payment. The Government is urging anyone that is eligible to use the scheme to look at the benefits and sign up as soon as possible.