What is the Help to Save scheme?
Help to Save is a government backed savings account, designed to help those on low incomes to save money, by boosting their savings by 50p for every £1 saved.
Who can open a Help to Save account?
You can open a Help to Save account if you’re living in the UK and:
- entitled to or receiving Working Tax Credit or Child Tax Credit payment, or
- claiming Universal Credit and your household income in you last monthly assessment period was £542.88 or more. Your Universal Credit payments don’t count as part of your household income.
If you stop claiming benefits you’ll still be able to keep using your savings account.
You can also apply for the account if you live overseas and you’re a:
- Crown servant or their spouse or civil partner
- Member of the British armed forces or their spouse or civil partner
If you stop claiming benefits you’ll still be able to keep using your savings account. If you have a household award of tax credits or Universal Credits then you and your partner will both be allowed to open your own Help to Save account.
How much do you have to pay into a Help to Save account?
Once you open a Help to Save account you decide how much you want to save (up to a maximum of £50) and how often. You don't need to make a minimum payment or pay into the account every month to get the bonus.
Can I withdraw money from a Help to Save account?
The account stays open for four years and during that time you can withdraw your savings straight into your bank account or close it at any time. However, as you’re only allowed one Help to Save account you won’t be able to open another in the future. You'll also miss out on the next available bonus if you close your account early.
How is the Help to Save bonus paid?
You can earn two tax-free bonuses based on your highest savings balance, So, at the end of the second year if you saved the maximum £50 every month you’d have saved £1200 and your bonus would be 50% of that - £600.
At the end of the fourth year you’re entitled to another bonus which is 50% of savings you pay into the account above the highest balance you’ve saved. So if you continue savings £50 a month you’ll have another £1200 at the end of the scheme and you'll receive another £600 bonus.
If you withdraw all the money after two years and carried on saving you wouldn’t get a bonus in year four because your highest balance would never go over £1200. So, although you can withdraw your savings at any time, you'll be affecting your chances of receiving the maximum bonus.
How does Help to Save affect my benefits?
If you’re receiving Universal Credit or Housing Benefit you or your partner can save up to £6000 which includes any money in your Help to Save account. Any bonus you receive won’t affect your Universal Credit or Housing Benefit payments.
If you’re receiving Working Tax credit any savings or bonuses through Help to Save won’t affect how much Working Tax Credit you receive.
You'll need to check if any savings or any bonuses from Help to Save can affect your eligibility for other benefits or how much you receive.
How do I apply for a Help to Save account?
If you’re eligible you can open an account online or through the HMRC app.
- Your National Insurance Number
- Your bank account details – this is where any withdrawals or bonuses will be paid
- A Government Gateway account – if you don’t have one you can set one up as you apply
If you can’t get online you can call 0300 322 7093 to open an account.
Do I have to use Help to Save to pay off my DMP?
No. Savings are included as part of your budget so that you have a safety net and don’t need to turn to credit to support your everyday living. If you’re able to save a regular amount every month, it’s up to you how you use this money. For example, you might save it to cover any unexpected costs or put it towards one-off expenses, such as birthdays or Christmas.
If you have a considerable amount in savings it could be possible to make a settlement offer to your creditors but, this would be your decision and, you should check with your DMP provider if this solution is a good alternative for you.
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