More Brits could open a Help to Save account | moneyfacts.co.uk

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Michael Brown

Content Writer
Published: 25/07/2022

Almost 7% of those eligible have opened a Help to Save account, which can pay up to a £1,200 bonus.

Since its inception, almost 360,000 savers have opened the Government’s Help to Save account, according to data from HMRC. In contrast, latest statistics suggest more than 5.5 million people now claim Universal Credit, thus making them eligible for this scheme.

In order to open a Help to Save account, users must either receive Working Tax Credit, be entitled to Working Tax Credit and receiving Child Tax Credit, or claim Universal Credit.

In addition, those opening an account need to live in the UK, unless they are a Crown servant or a member of the British Armed Forces. Savers living abroad but having a spouse or civil partner who is a Crown servant or a member of the British Armed Forces will also qualify.

“The Help to Save scheme supports hundreds of thousands of people on low incomes to save for their future,” said an HMRC spokesperson.

What is the Help to Save scheme?

The Help to Save scheme is one of the Government’s more lucrative savings offers. While users are restricted to depositing £2,400 into this account, the Government will pay out a 50% bonus after two years and another after four years if they keep saving.

It means that users can claim up to £1,200 as a bonus from the Government while accessing their funds as they wish.

However, just 2.5% of those eligible for the scheme are earning the maximum bonus. This is according to AJ Bell, an investment platform, which stresses that this is a generous estimate.

“Once you factor in those still on Working Tax credits and people that could have opened an account but are no longer receiving tax credits the uptake figures are likely much lower,” said Laura Suter, Head of Personal Finance at AJ Bell.

Since the Help to Save account has a deposit limit, savers are permitted to deposit a maximum of £50 per month.

Currently there are more than 48,000 accounts which still have not received a deposit.

Why is uptake slow?

“The reality is that the scheme has been poorly advertised, so lots of people aren’t aware of the perks on offer if they were able to put a bit away each month,” Suter believes.

In addition, the rising cost of living means that the amount of people who can afford to save the maximum sum each month will likely drop.

Still, for those who are eligible and can save this scheme could be a lucrative starting point.

“The flexibility of the scheme is one of its massive perks, as savers can withdraw the money whenever they need it and they will still get a bonus equivalent to half of their highest balance, so they aren’t penalised if they need to take out some cash before the two-year bonus period is up,” Suter explained.

To learn more about the Help to Save scheme, and other Government savings schemes, read our guide.

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