Help to Save Account Supports Low Income Households
For anyone on a low income wage and on Universal Credit or Working Tax Credit, the Help to Save account offers a boost to savings. It’s a savings account that gives you instant access to the cash but allows you to benefit from a 50% bonus of any amount that you’ve saved. This could equal a maximum of £1,200 across four years.
How Does Help to Save Work?
Essentially, you can save up to £50 a month into this account. As it’s easy access, you can withdraw any savings that you’ve put into it at any time. After the first two years, you get 50% of the highest balance that was available across the first 24 months. The maximum you can get is £600. Across the next two years, you get 50% of the difference between the highest amount in the first 24 months and the second 24 months. Again, this is up to a maximum of £600.
One of the main advantages to this savings account is that you don’t have to pay into it every month. If you find that you can’t afford to, you don’t need to keep adding savings to benefit from any bonuses. Additionally, if you are in need of money, you can withdraw anything you’ve paid in without being penalised for it.
As the rewards work on the highest amounts in the account across the two year intervals, it doesn’t necessarily matter how much you take back out as you’ll still be rewarded. The bonuses will be paid into your bank account, not into the savings account. After the four years are up, the account is closed and you won’t be able to open another one.
Example of Help to Save
During the first two years, you’ve managed to put away £1,000. Before the two years were up, you needed to withdraw £300. As the highest amount in the first two years was £1,000, you will still receive a bonus of £500, which is the 50% of £1,000.
As the second two year period works slightly differently, you need to save more than the highest amount in the first two years to get the bonus. Using the same example, you saved £1,000 but withdrew £300, so your balance was £700. In the second two year time frame, you managed to save £700 but had to withdraw £200. This puts your total at the end at £1,200.
The highest amount you had in the second two year time period was £1,400. The bonus you receive is 50% of the difference between the two highest balances in years 1–2 and 3–4, which were £1,000 and £1,400. The difference is £400, so your 50% bonus would be £200.
How Do I Qualify for Help to Save?
You need to meet the following criteria to be able to open up a Help to Save account:
- Be a UK resident and receive one of the following:
Universal Credit (with income less than £722.45) or
Working Tax Credit or
Be entitled to Working Tax Credit and receive Child Tax Credit
The good news is that if you stop qualifying while you’ve got the account, you still keep it. You only need to be eligible at the point of sign-up. It’s also available for every single individual that qualifies, so a couple can have an account each and receive bonuses separately.
Boost Your Income
Are you looking to boost your income? Have you applied for Marriage Tax Allowance? This transfers some of your personal allowance to your married partner so they can earn more before they’re taxed on it. It works out as a tax break worth up to £1,256 a year!
Check your eligibility by clicking on the button below.