Thousands of families on low incomes will be able to benefit from a new Government savings account launching this month. The Help to Save scheme rewards savers with an extra 50p for every £1 saved, so that over four years maximum savings of £2,400 would earn an overall bonus of £1,200.
More than 285,000 people on low incomes living in the East of England can potentially benefit from this scheme.
Save up to £50 a month
Help to Save is available to working people on Tax Credits and Universal Credit. Account holders can save between £1 and £50 a month over a four year period. After two years, savers get a 50% tax-free bonus on savings and another 50% tax-free bonus after four years if they continue to save.
The bonus does not count as income for tax credits, Universal Credit or any other income related benefit, e.g. Housing Benefit.
Easy, flexible and secure
“Help to Save is easy to use, flexible and secure,” said Cllr Gagan Mohindra, Portfolio Holder for Finance. “It will help those on low incomes build up a ‘rainy day’ fund, and encourage savings behaviours and habits. How much is saved and when is up to the account holder, and they don’t need to pay in every month to get a bonus.
“On maximum savings of £2,400 over 4 years, the overall bonus would be £1,200.”
Who can apply?
To be eligible for Help to Save, customers must be a UK resident and:
- be receiving Working Tax Credit
- have a nil award of Working Tax Credit but receiving Child Tax Credit
- be in receipt of Universal Credit with minimum individual or household earnings equivalent to 16 hours, times the National Living Wage in their last income assessment period (that’s £542.88 during the financial year 2018-19).
If customers have a joint Universal Credit or tax credits award, both partners can open an account.
To apply, savers can visit www.gov.uk/helptosavelocal or use the HMRC app.