The Help to Save scheme is another type of savings account, which is supported by the Government.
It enables people, who are entitled to Universal Credit or Working Tax Credit, to receive 50p for every £1 they save over four years.
Due to the economic downturn resulting from the COVID-19, many more Britons have become eligible for the scheme due to their incomes being reduced.
As part of the scheme, Help to Save pays out a 50 percent bonus on any amount saved by those with an account.
Savers can place up to a maximum of £1,200 into the savings account over a set four-year period.
How does it work?
Help to Save is an easy access account, making it accessible to savers who need to regularly take money out.
After two years, savers will receive the first 50 percent bonus into their bank accounts, not their Help to Save.
This bonus will be paid on the highest amount that has been placed into the account over the two-year period.
It is not paid on the amount which is left in the account by the end, however this can very likely be the highest amount.
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When this has been paid, account holders can then decide to stop saving, or they can keep saving into it for another two years.
The bonus for the following two years will be paid on the amount of someone’s highest balance in years three and four which exceeds their previous highest balance in the first two years.
Account holders can save between £1 and £50 a month, yet are not required to save every month.
However if they keep saving, anyone with an account can get another bonus which will be paid at the end of four years.
Who is eligible for Help to Save?
In order to be eligible for Help to Save, account holders must be UK residents, claim Universal Credit, and have employment income of £617.73 or more for the last monthly assessment period.
People who are entitled to Working Tax Credit or Child Tax Credit also qualify for the Government scheme.
If someone is not working due to the pandemic, but their partner is, they may still be eligible for Help to Save.
Couples who claim UC together and have a combined income higher than £617.73 in their last assessment period will be able to open an account.
However, couples will not be able to open a joint Help to Save as it is only available for one person.
Furthermore, account holders can still continue saving into their Help to Save even if they are no longer eligible for Working Tax Credit or Universal Credit.
Applicants need only be eligible for either of both benefits during the time they decide to open an account.
How to open an account
Anyone can apply through their Government gateway account via Help to Save on Gov.uk.
Alternatively, those who are interested in an account can call 0300 322 7093 and the HMRC helpline advisers will help you set up an account.
Accounts can be opened until September 2023 and kept for up to four years.
The Help to Save scheme was announced in March 2016 under former Prime Minister David Cameron’s Government.
On the state-backed savings account, then-Chancellor George Osborne said: “This Government is determined to improve the life chances of the poorest in our society and our new Help to Save scheme will mean millions of low income savers across the country could now receive a government bonus of up to £1,200 to help them build up their savings.”