Join the Help to Save scheme and you could get up to £1,200 of bonus tax-free money from the government to use as an emergency fund or on whatever you want.
Many, many, many moons ago, our old PM told us all about a Help to Save scheme.
This savings scheme was being set up to (can you guess ;) ) help you save!
Roll on the months and, while the whole thing is not launched to everyone, feedback from members of the Skint Dad Community Group has shown that people are applying now and being accepted onto the first part of the rollout.
What is Help to Save?
To support in planning for the future, the government’s new saving scheme will allow people on low income to build up their savings.
You’re able to save up to £50 a month over 4 years and could get up to £1,200 in tax-free bonuses. If you want to save less you can and you can start saving at just £1 a month.
After two years, savers will get a 50% bonus based on the highest balance they’ve been able to achieve. If you’ve saved the full £50, that’s £1,200 saved plus £600 free boost from the government.
But you’re still able to carry on saving for another two years and get another 50% bonus on the additional savings.
Over the course of four years, if you’ve been able to save the maximum £2,400 you will get a bonus saving of £1,200.
Who can apply for Help to Save?
The Help to Save scheme is not available to everyone, unfortunately.
It’s open to UK residents who are entitled to Working Tax Credit and receiving Working Tax Credit or Child Tax Credit payments claiming Universal Credit.
You will also need to have a household or individual income of at least £542.88 for your last monthly assessment period.
If you live overseas and meet the criteria you can apply if you are a Crown servant (or their spouse or civil partner) or a member of the British armed forces (or their spouse or civil partner).
It’s estimated that 3.5 million people could be eligible to open an account.
When does Help to Save roll out?
The scheme started its trail in January 2018 and is being rolled out in stages.
It will be available to all those eligible from October 2018 onwards.
However, we’ve had feedback from members of our community group that people aren’t being asked to join, but are able to apply and join right now.
Starting to save
Natasha, a member of the Skint Dad Community Group, has access to Help to Save.
She told us: “I logged onto my personal tax account and the government are doing saving accounts. It’s new and part of a trial but I think it’s pretty impressive as it will help me save more.
“It’s really simple to do and it’s a good idea to get people into the routine of saving whether it would be a £1 or £50.”
Natasha has already started her saving and has a goal in mind: “I’m hoping I could put it towards a new car at the end of four years.”
Since sharing she joined Help to Save, other members of the community have also joined and started saving too.
Is Help to Save fair?
While I think it’s great to give an opportunity to help low earners save money, I know there will be people miffed that they can’t take part.
Personally, I would have loved to get over £1,000 in bonus payments, but I can see why the government cannot afford to roll it out to everyone.
Those who get paid more might easily afford the £50 a month and would go all in…but they probably don’t need to bonus payment as much as others.
The ones who miss out are people who work, earn just over the amount to get benefits, yet struggle to get by month to month.
Wouldn’t it be nice to have a tax incentive thrown to people in the middle every now and then?!
Is it unfair?
Not everyone is a big fan of the new scheme.
Gary, also a member of the Skint Dad Community Group, explained why he’s not a fan.
“The closest thing to this for people not claiming these eligible benefits is the Flexclusive Regular Saver via Nationwide which offers 5% interest. This new scheme is offering 50%. That’s insane.”
Having been a saver for many years, Gary feels the government is singling our those on benefits:
“I’m very happy to contribute to the system to help support those in need. But I don’t feel those in receipt of benefits should be ‘helped’ even further by a scheme of this sort.
“I feel that if there is this ‘bonus’ money available to pay to those families who are signing up to this scheme then surely that money would be better used elsewhere.”
Stats show that four in ten of us have less than £500 set aside as an emergency fund.
So if something were to happen (the washing machine packs in, the boiler goes or your car just won’t start) then you’ve got no way to pay for it. This generally means people turn to credit and get into more debt.
It’s best, if possible, to have three to six months of rent/mortgage and bills saved in an easy to access account to cover things for an emergency.
When you add this up it’s a huge chunk of money, but it can take some financial stress away knowing that you’ve got a buffer.
The Help to Save scheme has been set up as a way to help you save for an emergency but, in truth, you can use it for whatever you want.
How do you check your Help to Save account?
You can check your account (and see if you’re eligible) via your personal tax account on the gov.uk site.
Once you’ve been accepted you can start making saving straight away, then you’re able to check your balance, pay in savings and manage your account all in one place.
What if you’re skint?
Maybe you start paying in £50 a month as you can afford it (or you thought you could). But then your circumstances change or maybe the cooker just won’t heat up anymore and you need a new one!
You don’t need to fret.
The money you’ve saved in Help to Save can be withdrawn at any time and you can lower your saving level.
However, if you take it out, it could affect the size of the bonus payment you get.
Not entitled to Help to Save?
While it may seem like a big sting that you can’t take advantage of the offer, there are other options.
If you don’t need to access your savings, you can get a massive return on an auto enrolment pension with your employer. For every penny you put in, your employer and the government add contributions to top up the amount, making it worth a whole lot more!
However, if you want to build up an emergency pot, you will not be able to access this money for years.
If you find saving money hard, try some of these ideas:
- Get a 1.25% (Variable) Bonus with the Chip+1 Savings App
- How to Save Money When You Live Paycheck to Paycheck
- 3 Simple Tips to Save Money When You Normally Struggle
- 5 Ways to Save Money Without Even Trying
- 1p Saving Challenge: Easily Save Over £650 in Less than a Year (FREE Printables)
Missing out on anything else?
If you’re married, you could make a tax saving with the Marriage Allowance, depending on how much you earn.