What is the Help to Save scheme in the UK?

Full answer

Help to Save is a savings account backed by the government, designed to help people on low incomes build a financial buffer. You are eligible if you are receiving Universal Credit and earning income from work, or if you receive Working Tax Credit. You can save between £1 and £50 each calendar month. You do not have to save every month, but you can never pay in more than £50 in any single month. The bonus is calculated at 50% of the highest balance you reach during the first 2 years, paid at the end of year 2, and then 50% of any additional saving above that highest balance during years 3 and 4, paid at the end of year 4. The maximum total bonus is £1,200 over the full 4 years, assuming you save the maximum £50 every month. For example, if you save £50 a month for the first 2 years, your highest balance reaches £1,200, and the government pays a £600 bonus. If you continue saving for years 3 and 4 and add another £1,200, you earn a further £600 bonus. The bonus is paid directly into a bank account you nominate, not into the Help to Save account itself. You can make withdrawals during the scheme, but any reduction in the highest balance reduces the bonus you earn at the end of year 2. The account is operated by National Savings and Investments on behalf of HMRC. You apply online through your Government Gateway account. The scheme is designed to reward saving discipline and gives a guaranteed 50% return, which is significantly better than any commercial savings rate. Use a savings calculator to compare what Help to Save delivers against a standard ISA.

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