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The Help to Save scheme can help those on low incomes to boost their savings. The scheme was launched in September 2018, and new figures published by HMRC have revealed that over 132,000 people have signed up, depositing more than £31.4 million into Help to Save accounts. These savers are now eligible for bonuses totalling around £14 million.
Under the scheme, those receiving Working Tax Credit or entitled to Working Tax Credits and in receipt of Child Tax Credits, can save up to £50 a month for two years and receive a 50% Government bonus. The scheme is also open to those who are claiming Universal Credit and had a household or individual income of at least £569.22 for their last monthly assessment period. Payments from Universal Credit are not considered to be part of household income.
Payments under the scheme can be made by standing order on a weekly, fortnightly, or monthly basis and one-off payments by debit card are also possible. Account holders will then be able to continue saving under the scheme for a further 2 years and receive another bonus. This could see those on low incomes receive a bonus of up to £1,200 on maximum savings of £2,400 for 4 years from the date the account is opened. After the 4 years, the Help to Save account will be closed and savers will not be able to reopen or open another Help to Save account. The account balances are expected to be rolled over into successor accounts.
There are no limits on how the money used can be spent, but it is hoped that the money will be saved for urgent costs. Money paid into the account can be withdrawn at any time, but this could affect the size of the bonus payment. The Government is urging anyone else eligible to use the scheme, to look at the benefits as the take-up of the scheme has been far less than expected. It is estimated that some 3.5 million people could use the scheme.
Addison & Co