Help to Save 2026/27: The Complete Guide for UC and WTC Claimants

What is Help to Save?

Help to Save is a government savings scheme that rewards lower-income workers for building up a savings pot. For every £1 you save, the government adds 50p -- effectively a 50% return on your savings, guaranteed by HM Treasury, regardless of interest rates.

The scheme was introduced in 2018 and is available to people in England, Scotland, Wales and Northern Ireland who are on Universal Credit or Working Tax Credit. It is run by HMRC and NS&I.

Given that most savings accounts pay nowhere near a 50% return, Help to Save is one of the most attractive savings products available -- the challenge is simply being eligible and saving regularly on a tight income.

Who is eligible?

You can open a Help to Save account if you are a UK resident AND meet one of the following conditions:

Universal Credit with earnings

You must be currently receiving Universal Credit AND your household must have had earnings from employment or self-employment of at least £1 in your last UC assessment period.

• You do not need to have a minimum amount of earnings -- even £1 counts.
• Earnings must come from you or your UC partner (for joint claimants).
• The "household earnings" test applies to the assessment period immediately before you apply.

Working Tax Credit

You must be entitled to Working Tax Credit AND actually receiving Working Tax Credit (or Child Tax Credit if entitled to both).

• "Entitled to" Working Tax Credit means you qualify based on hours worked.
• This typically means at least 16 hours/week for single parents, 24 hours/week for couples.

The residency test

You must normally live in the UK. Crown servants posted overseas can also apply.

You cannot open a Help to Save account if you are bankrupt or subject to a Debt Relief Order.

How much can you save?

You can deposit any amount between £1 and £50 per month. You do not have to save the same amount each month, and you can skip months entirely if money is tight.

There is no interest on the savings themselves -- the bonus is the entire return from the government.

How the 50% bonus is calculated

The bonus calculation is more nuanced than a simple 50% on everything you save. It rewards your highest balance reached -- not your final balance. This protects against losing bonus if you need to withdraw.

First bonus (after 2 years)

Paid after month 24 into a separate bank account you nominate.

First bonus = 50% x the highest balance you reached in months 1-24.

Example: You save £50/month. Your highest balance during years 1-2 is £1,200. First bonus = £600.

Second bonus (after 4 years)

Paid after month 48 into your nominated bank account.

Second bonus = 50% x (highest balance in months 25-48 MINUS highest balance in months 1-24).

The second bonus only applies if your balance grows above the highest point reached in the first 2 years.

Example:

• Highest balance in years 1-2: £1,200 (you saved £50/month).
• After the first bonus was paid, you kept saving £50/month.
• Highest balance in years 3-4: £2,400.
• Growth above year 1-2 peak: £2,400 - £1,200 = £1,200.
• Second bonus: 50% x £1,200 = £600.
• Total bonuses: £600 + £600 = £1,200.

What happens if you withdraw?

Withdrawals lower your actual balance but do not erase the highest balance already recorded. However, if you withdraw and your balance never recovers to above the previous highest point by month 24, your first bonus is based on the pre-withdrawal peak.

The risk is with the second bonus: if you make withdrawals in years 3-4 and cannot rebuild above the year 1-2 peak, the second bonus is zero.

Practical tip: treat Help to Save as money you cannot touch for 4 years. If you need emergency cash, exhaust other options first.

How to open a Help to Save account

You open Help to Save through HMRC, not through a bank:

1. Log in to the HMRC app (recommended) or your Personal Tax Account on gov.uk.
2. Search for "Help to Save."
3. Check your eligibility (HMRC checks UC/WTC records automatically).
4. Choose the bank account where you want bonus payments sent.
5. Account opened -- usually instantly.

You can also call HMRC on 0300 322 7093 to open by phone.

Once open, you can pay money in by bank transfer to your unique Help to Save account number. Standing orders make it easier -- set up a monthly transfer on the day after your UC payment arrives.

Help to Save and Universal Credit

This is an area that causes confusion. The key rules:

During the account's 4-year life

Money held in your Help to Save account is disregarded for the UC capital test during the account's 4-year term. This means it does not count toward the £6,000 savings threshold that begins to reduce UC, or the £16,000 threshold above which UC is stopped.

When the bonus is paid

The government bonus is paid to your separate bank account (outside Help to Save). Once received, it is ordinary savings and counts as capital for UC purposes.

• If your total savings (including the bonus) remain below £6,000, UC is unaffected.
• Between £6,000 and £16,000, UC is reduced by £4.35/month for each £250 of capital above £6,000.
• Above £16,000, you are no longer entitled to UC.

For most Help to Save users, the bonus amounts (up to £1,200 over 4 years) are unlikely to push total savings above £6,000, but it depends on your wider savings position.

Impact of Help to Save deposits on UC itself

Saving money does not reduce your UC payments during the account's life (because the balance is disregarded). However, the money you put aside is obviously not available to spend, so budgeting carefully matters.

Help to Save and tax

The government bonus is completely tax-free -- no income tax, no National Insurance. It does not need to be declared on a Self Assessment return. Interest on a Help to Save account is also tax-free (there is currently no interest, but the tax exemption is in place).

What happens after 4 years?

At the end of month 48, your Help to Save account closes automatically. HMRC:

1. Calculates and pays the second bonus to your nominated bank account.
2. Pays any remaining balance to you.
3. Closes the account.

You cannot extend the account or roll it over. You cannot open a new Help to Save account -- the scheme is open to you once in your lifetime.

After closure, you can:

• Move the money to a cash ISA (up to £20,000 ISA allowance per year).
• Open a regular savings account or easy-access savings account.
• If you remain on UC, build savings carefully to stay below the £6,000 disregard threshold.

Maximising your Help to Save

Save as much as possible in the first 2 years

The first bonus is 50% of the highest balance in years 1-2. Every £50/month you save in this period generates £25 in bonus. Saving the maximum £50/month for 24 months gives a first bonus of £600.

Keep saving in years 3-4

The second bonus depends on growing your balance above the year 1-2 peak. If you saved £50/month in years 1-2 (peak = £1,200), and you then continue at £50/month in years 3-4, your peak rises to £2,400 and the second bonus is £600.

Do not withdraw unless essential

Every pound you withdraw that is not recovered reduces the second bonus calculation. The 50% bonus makes this savings product uniquely valuable -- protect it.

Consider timing around UC assessment periods

If you have a month where earnings are zero (e.g. a gap in work), your UC eligibility test for the account continues -- you can keep saving even if temporarily not receiving UC. The eligibility check is only at account opening.

Worked example: 4-year plan

Sarah is on Universal Credit with part-time earnings of £800/month. She opens Help to Save and saves £40/month.

Total Sarah saves: £1,920. Total bonus: £960. Total return: £2,880.

For a household with tight margins, an extra £960 from the government -- guaranteed, tax-free -- is significant.

Sources

• GOV.UK: Help to Save scheme
• HMRC: Help to Save guidance for individuals
• DWP: Universal Credit and capital
• NS&I: Help to Save account management