Help to Save: How to boost your savings
The Help to Save scheme, a government backed savings account, can help those on low incomes boost their savings by 50p for every £1 saved.
If you’re entitled to Working Tax Credit or Universal Credit you could be eligible to open a Help to Save account. And, because it's a government scheme all your money is secure.
How does Help to Save work?
Once your Help to Save account is open it’s up to you how much and how often you save. To get the tax-free bonus you aren’t required to save a minimum amount or even save every month. However, the maximum you can save is £50 a month.
The account stays open for fours years after which it closes. You can withdraw the money from your savings at any time and it’ll be paid into your bank account.
You can also close the account early, however as you’re only allowed one Help to Save account you won’t be able to open another in the future. If you close the account early you won't be eligible for the next bonus that's due.
How is the Help to Save bonus paid?
You can earn two tax-free savings bonuses that’ll be paid into your bank account (not your Help to Save account). The bonus is based on how much you’ve saved. Even if you’ve withdrawn money from your savings, you could still be entitled to a bonus. However, you'll be affecting your chances of earning the maximum bonus by doing so.
The first bonus is paid at the end of the second year and will be 50% of the highest balance saved. So if you saved the maximum £50 every month at the end of the two years you’d have saved £1200. Your bonus would be 50% of that - £600.
The second bonus is paid at the end of the fourth year and is 50% of savings you pay into the account above the highest balance you’ve saved. So if you continue to save £50 a month you’ll be adding another £1200 to your savings pot and will receive another £600 bonus.
But, if you withdraw all the money you save after two years and then carry on saving you won’t get a bonus in year four because your highest balance would never go over £1,200.
Who can open a Help to Save account?
You can open a Help to Save account if you’re living in the UK and:
- entitled to or receiving Working Tax Credit or Child Tax Credit payment, or
- claiming Universal Credit and your household income in you last monthly assessment period was £542.88 or more. Your Universal Credit payments don’t count as part of your household income.
If you and your partner have a household award of tax credits or Universal Credits then you’ll be allowed to open a Help to Save account each.
If you stop claiming benefits you’ll still be able to keep using your savings account.
You can also apply for the account if you live overseas and you’re a:
- Crown servant or their spouse or civil partner
- Member of the British armed forces or their spouse or civil partner
Worried about debt?