What is the Help to Save scheme? Is it worth using?

What is Help to Save?

Help to Save is a Government-backed savings account, operated by National Savings and Investments (NS&I), that lasts for a maximum of four years. They are designed to help people on a low income and receiving certain benefits to build up a savings pot.

Instead of paying interest, these accounts pay a bonus of 50p for every £1 saved. The bonus is paid after the second and fourth year.

Savers can deposit from £1 up to £50 each calendar month. There are no penalties for not making a deposit in a month or for withdrawing your money.

At the end of four years, your Help to Save account will close and you won’t be able to apply for another one.

Eligible savers have until April 2027 to apply for one of these accounts.

Who can open a Help to Save account?

Help to Save accounts exist to help those on a low income to build a savings fund.

To qualify for a Help to Save account, savers need to receive Universal Credit and have a take-home pay of at least £1 in their last monthly assessment period. If you have a joint Universal Credit claim, this £1 minimum applies across your and your partner’s income.

Even if you receive Universal Credit payments as a couple, you can each apply separately for a Help to Save account.

Those opening an account need to live in the UK, unless they are a Crown servant or a member of the British armed forces (or, in both cases, their spouse or civil partner is).

Can you continue to use a Help to Save account if you stop receiving benefits?

Yes, once your Help to Save account is opened, you can continue to use it until you close it or it reaches the end of the four-year term, even if you stop receiving benefits.

You only need to meet the eligibility criteria at the time of opening the account.

How much can you save into a Help to Save account?

You can save from £1 up to £50 per month in a Help to Save account, but there’s no penalty if you can’t add to your savings in a particular month.

There are several ways you can pay into a Help to Save account, including via bank transfer, a debit card payment or a standing order with your bank account so your monthly payment into your Help to Save account is made automatically.

You are allowed to make multiple payments into your account each month, as long as they do not exceed the maximum of £50. However, you cannot carry over any unused amount from previous months.

How does the bonus work?

The maximum bonus you can receive with a Help to Save account is £1,200.

The bonus is paid into your bank account (not your Help to Save account) at the end of the second and fourth years and is tax-free.

Your first bonus will be half of the highest balance held during the first two years.

At the end of your fourth year, you will receive another bonus (assuming you continued to save into the account).

This will be half of the difference between your highest saved balance in the first two years versus the last two years.

How to earn the highest bonus possible using Help to Save

To receive the highest bonus of £1,200 on your Help to Save account, you should save the maximum of £50 every month for the full four years, without making any withdrawals.

If you do this, you will receive a £600 bonus after the first two years and a £600 bonus after the last two years. This will bring your total balance to £3,600, made up of £2,400 of your own deposits and £1,200 in bonus payments.

Are withdrawals from Help to Save accounts allowed?

You can make withdrawals from your Help to Save account without incurring any penalty or fee. However, this will reduce your total balance and could limit or remove your opportunity to earn a bonus payment.

Bear in mind it could take several working days to receive any money you withdraw.

How to open a Help to Save account

1. Apply online via the Gov.uk website or the official HMRC mobile app. You will need to use your Government Gateway user ID and password.
2. Have your UK bank details ready for when you apply. You need these to pay money into the account and to receive your bonus payments.
3. Your application will be reviewed by HM Revenue & Customs (HMRC), which will decide if you are eligible for the account.
4. Once your account is opened you will receive a sort code and bank account number for your account.
5. You will receive a welcome pack from HMRC containing instructions about how to pay money into your account and how to receive your bonus payments.

Should I open a Help to Save account?

A Help to Save account could be a good idea if you have some spare cash available each month and want to build a rainy day or emergency savings fund.

However, if you’re currently paying off expensive debts or are behind on priority debts, such as Council Tax, it may be worth putting any spare money towards paying these off instead of into savings.

Because you can only ever open one Help to Save account, to take full advantage of it, you should only apply if you’re confident you can contribute to it on a fairly regular basis.

What other Government savings schemes are there?

Savers aged between 18 and 39 can also open Lifetime ISAs (LISAs), which offer a bonus from the Government of up to £1,000 per year.

However, you can only withdraw money in a LISA for a house deposit or after you turn 60; withdrawals for any other purpose will incur a 25% penalty charge. Find out more and compare Lifetime ISAs.