Help to Save – designed for claimants of Universal Credit and Tax Credits – offers a 50% bonus for every £1 saved – and 80,000 people on low wages will benefit
Millions of people are missing out on a potential £1,200 bonus through a new Government scheme to support Britain’s lowest earners.
So far 80,000 people have opened a Help to Save account – an initiative launched in September to help 3.5 million people build up a rainy day pot.
A collective £10 million has been stashed in, putting thousands on track for the full £1,200 reward.
Help to Save – designed for claimants of Universal Credit and Tax Credits – offers a 50% bonus for every £1 saved.
Account holders are allowed to save between £1 and £50 every month with accounts lasting four years.
Over this time, a maximum saving of £2,400 would deliver a £1,200 bonus.
However almost 3.4 million people are missing out on it.
The support scheme, aimed at those in receipt of Universal Credit is off to a “slow start”, according to insurer Royal London, so far reaching less than one in 40 of the low income savers it was designed to help.
It said just 80,810 accounts had been opened by the end of 2018, according to latest figures.
The scheme was first announced in March 2016 by David Cameron.
Becky O’Connor, personal finance specialist at Royal London, said: “It’s not surprising that Help-to-Save is off to a slow start given the issues that claimants have had with Universal Credit itself.
“In theory it’s a good idea as people on low incomes would benefit a lot from a small savings fund, as it could help them avoid costly payday loans and other forms of high cost credit. However in practice, if you are on a low income, the problem is that you have very little, if anything, to set aside, in the first place
Treasury Minister John Glen said: “The new year is a good time to start getting into the habit of saving, and with Help to Save you’ll get a massive 50% boost from the Government.
“Whether you are saving for a family break, putting money away for a rainy day, or even saving for next Christmas, Help to Save is designed to make saving as simple as possible
And with the new version of the app, which can be personalised to help you make the most of your bonus, it’s easier than ever.”
Help to Save is available to working people on tax credits and universal credit.
HMRC has now launched a new tool on its app that allows savers to set goals and give personal reminders to maximise bonuses.
The scheme is open to UK residents who are:
Entitled to Working Tax Credit and receiving Working Tax Credit or Child Tax Credit payments
Claiming Universal Credit and have a household or individual income of at least £542.88
Living overseas and are (or have a partner that is) a Crown servant or a member of the British armed forces.
To apply, savers can visit www.gov.uk/helptosave or follow the instructions on the HMRC app.
The Treasury says it takes around 5 minutes to open an account which will be run by NS&I. Accounts will be available to open from 12 September 2018 until September 2023.
If you don’t have access to the internet, you can still open one by calling 0300 322 7093.