More than 264,000 Help to Save accounts opened
Help to Save is the government-backed savings scheme aimed at helping people on low incomes to put money into a savings account.
The scheme allows savers to earn a 50p bonus for every £1 saved over four years. The 50% bonus is payable at the end of the second and fourth year and is based on how much money accountholders have saved.
Accountholders can save up to £50 a month. If they save the maximum amount each month for four years, they could save £2,400 and earn £1,200 in bonus payments.
More than 42,000 new Help to Save accounts were created between August 2020 and January 2021.
Angela MacDonald, HMRC’s deputy chief executive, said: “The Help to Save scheme has helped more than 264,000 individuals open a savings account. And regular savers can earn up to £1,200 in bonus payments over four years.”
Almost 217,000 people have made a deposit to their Help to Save account. Of those depositing into their savings account, the average monthly deposit per person is £48, as of 31 January 2021.
The total deposits to the scheme in the six-month period, August 2020 to January 2021, exceeded £40m. This is the highest recorded amount saved in a six-month period since the scheme began in September 2018.
People can open a Help to Save account if any of the following applies. They are:
- receiving Working Tax Credit
- entitled to Working Tax Credit and receiving Child Tax Credit
- claiming Universal Credit and they (with their partner, if it’s a joint claim) earned £604.56 or more from paid work in their last monthly assessment period
You can check the Help to Save eligibility criteria and find out how to apply at Gov.uk. If you’re eligible, you can set up a Help to Save account at any time until September 2023.
Accounts are open for four years and you can make as many deposits as you like, as long as you don’t go over the monthly saving limit of £50.
You can withdraw money at any time, although this may affect your 50% bonus payments.
Myron Jobson, personal finance campaigner at Interactive Investor, said: “The coronavirus crisis has clearly helped increase the uptake of Help to Save towards numbers the government would have hoped for when it first launched the scheme back in 2018. According to official figures, the number of people on Universal Credit rose by 98% since 12 March to 6 million as of 14 January 2020 – many of whom will be eligible for the Help to Save scheme.
“It is a great initiative to help instil a culture of savings among the nation’s most cash-strapped individuals. But for those who’ve felt the full force of Covid’s financial pinch, the priority has been to stay above the breadline.
“For those who can afford it, a 50% savings bonus is too good a carrot to pass up at a time when many conventional savings accounts offer a pittance in interest. Those on a low income should consider whether saving is a priority if it would mean they would have difficulty meeting outstanding debt commitments, particularly priority debts such as council tax, as a result.
“However, the latest Help to Save uptake figures suggest that the value of having something to fall back is not lost on the nation’s most vulnerable.”