This debt advice applies to individuals in the UK with personal debts.
The Help to Save scheme is a savings account supported by the government that is intended for low incomes to increase their gains by 50p for every £1 saved.
Through the Help to Save scheme you can raise savings and earn tax-free bonuses if you are earning low and claiming Universal Credit, or suitable for Working Tax Credits. Since Help to Save is backed by the government, your money is certainly secured.
How Help to Save Works?
Once you open a Help to Save account, you can save as much as you and how frequent you wish to. To earn the tax-free bonus you’re not obliged to save the desired amount or even save regularly. But, up to is £50 a month in maximum.
The account remains open for up to fours years. After such time it will close. Besides, if you want to withdraw your savings, you can do this anytime. It can also be paid straight to your bank.
Significantly, you’ll only be allowed to open one Save to Help Account. So, you must consider this circumstance when you wish to close it early. Additionally, when you close your account early, you won’t be entitled to any bonuses that will be due.
How Can I Get Paid with Help to Save bonus?
You can gain tax-free savings bonuses twice within four years. This will not be paid in your Help to Save account but straight to you bank account. The amount that you’ll earn will depend on how much you have saved.
The good thing is, regardless of whether you’ve taken out money from your account, you’ll still be entitled to bonuses. However, the opportunity of earning larger bonuses might be at stake.
The initial bonus is given at the end of your second year. It is around 50% of the total amount that you’ve saved. This means, if you’ve saved £50 each month (maximum savings each month), you’ll have a total of £1200 at the end of the second year. Since the bonus is 50%, you’ll get an additional £600. This will give you a total of £1800 on your second year.
At the end of the fourth year, you’ll get the 50% of your savings as the second bonus. If you maintain saving the maximum amount of £50, you’ll be entitled to get the same amount during the second year.
However, if you take out all your savings for two years, you won’t be eligible for the bonus on at the end of the fourth year.
Can I Open A Help to Save Account?
You are eligible to open a Help to Save account if you’re:
- living in the UK
- receiving Child Tax Credit payment or Working Tax Credit
- claiming universal credit and your last month’s assessment period on your household income is £542.88 or more. (universal credit is not taken into account as part of your household income).
If both you and your partner have household award of tax credits or Universal Credits, you’ll be entitled to open a Help to Save account individually. Also, if you cease receiving benefits you’ll still utilize your Help to Save account.
If you live overseas and you satisfy the criteria stated below, you can also qualify to open an account:
- Crown servant or a spouse or civil partner of one
- Part of the British armed forces or the spouse or a civil partner of one
Can Help to Save Affect My Eligibility to Benefits?
Your entitlement to certain benefits might also be affected once you open an account through Help to Save scheme.
Both you or your partner can hold £6000 worth of savings. This cannot affect payments to your universal credit. Besides, bonuses on your Help to Save won’t have any effect as well.
Working Tax Credit
Help to Save savings or bonuses will not matter the amount of Working Tax Credit you’re getting.
Setting up a maximum of £6000 will not affect any payments for your housing benefits. This also includes your Help to Save bonuses.
How to Apply?
If you’re qualified you can open an account online or using the HMRC app.
You will need the following to open up a Help to Save account:
- National Insurance number
- Bank account information to which bonuses or withdrawals are compensated
- A Government Gateway account which you can obtain online as you apply if you don’t have any
You can also call on 0300 322 7093 if you cannot open a Help to Save account online.
We have debt experts that offer free debt advice to individuals with debt-related problems. If you perceive that you’re needing help with your finances, make use of our debt advice tool or call us on 0800 193 1024.