Is Help to Save worth it?

Help to Save is a Government-backed savings account that lasts for a maximum of four years. This account pays a bonus of 50p for every £1 saved. Savers can deposit from £1 up to £50 each calendar month. There are no penalties for missing a monthly payment or for withdrawing your money. The bonus is paid after the second and fourth year. You can only ever have one Help to Save account and need to be receiving certain benefits to qualify. The account is operated by National Savings and Investments and they are only available until September 2023.

Help to Save accounts exist to help those on a low income to build a savings fund. Those who are eligible are:

• Receiving Working Tax Credit
• Entitled to Working Tax Credit and receiving Child Tax Credit
• Claiming Universal Credit and your household earned at least £569.22 from paid work during your last monthly assessment.

Those who receive payments as a couple 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).

Yes, once your account is opened you can continue to use it until you either close it or it reaches the end of the four-year term.

You can save from £1 up to £50 per month in a Help to Save account. You can set up a regular payment called a standing order with your bank account so your monthly payment into your Help to Save account is always made. You can also use your debit card to make payments into the account. You can make multiple payments into your account each month as long as they do not exceed the maximum of £50 in one calendar month. You cannot carry over any unused amount from previous months. 

The maximum bonus for the Help to Save account is £1,200 over four years. The bonus is paid at the end of years two and years four. Your bonus will be half of your maximum highest balance during the period. At the end of your fourth year you will receive another bonus. This will be half of the difference between your highest saved balance in the first two years versus the last two years.

• Save £50 per month for the first two years. Your highest balance will be £1,200. Your bonus is 50% (half) of this balance: £600.
• In years three and four you continue to save £50 per month increasing your £1,200 balance from the end of year two up to £2,400 at the end of year four. Your bonus is 50% (half) of the difference between the maximum balance at the end of years two and years four. £2,400 - £1,200 = £1,200 – half of this is £600.
• The total bonus is £1,200 across the four years and your total balance including this bonus is £3,600.

1. Apply online – you will need to have a Government Gateway user ID and password to apply.
2. Have your UK bank details ready for when you apply – these are needed to receive your bonus payments and to pay money into your account.
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.

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. If trying to save regularly would worsen your living standards or result in you not paying your debts or bills, then you may want to wait. This is because you can only have one Help to Save account ever. If you open it and then find you cannot save as much into it as you might have liked or at all, then your opportunity would have been wasted.

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.

Savers can also benefit from Lifetime ISAs (LISAs), which offer a bonus from the Government of up to £1,000 per year. You can only use LISAs for a house deposit or as part of saving for retirement. You will also need to be between the ages of 18 and 39. Find out more and compare Lifetime ISAs.