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Record £32m deposited into Help to Save accounts during lockdown

Paloma Kubiak
Written By:
Paloma Kubiak

In the six months to July, £32.1m was deposited into the government’s Help to Save scheme, giving low income holders a chance to earn a bonus of up to £1,200.

Help to Save accounts offer people on low incomes a 50% bonus on what they save – rewarding them with 50p for every £1 put away. Over four years, a maximum bonus of £1,200 is available on savings of up to £2,400.

The latest statistics from HMRC covering February to July 2020, revealed that 60,000 accounts were opened, taking the total number opened to 222,000 since launch in September 2018.

This is a 37% increase on the number reported in the previous six-month period.

Total deposits during the period stood at £32.1m – a 57% increase from the previous half year statistics.

And the average deposit per person per month has also risen to £48, just shy of the maximum £50 permitted.

However, the figures also reveal that the largest amount has been withdrawn from the government saving scheme – £13.3m.

And even though more people are paying into the accounts than ever (132,000), HMRC said there are over 60,000 accounts that are still yet to receive a deposit.

Given that Universal Credit claimants are eligible to open a Help to Save account and there were 5.6 million recipients as at 9 July, many more people may now wish to apply for the account.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the Coronavirus crisis pushed Help to Save to record highs as it had its most successful six-month period since it was launched.

“Hundreds of thousands of people are likely to have qualified for the first time. Lockdown pushed over two million people onto Universal Credit: around a million of them are still claiming, and a big chunk of them will be eligible.

“With their lives turned upside down and their finances stretched to breaking point, you’d have thought the last thing on many people’s mind will have been the fact they might now qualify for a savings scheme. However, the uncertainty of life and the value of a safety net were also becoming far clearer, and people realised the value in having something to fall back on.

“The fact you can start from £1 a month, and you can get your hands on the cash at any time, means there’s no harm in trying to save. The fact that bonuses are based on your highest ever balance rather than the balance at the end of the period also means you won’t be punished for having to withdraw cash along the way,” she said.

See YourMoney.com’s Help to Save guide for more information.