The new Help to Save scheme for people on low incomes was officially opened with effect from 12 September 2018 following an 8-month trial. The new scheme allows those in work entitled to Working Tax Credit, and in receipt of Working Tax Credits or Child Tax Credits to save up to £50 a month for two years and receive a 50% government bonus.
The scheme is also open to UK residents who are claiming Universal Credit, and have a household or individual income of at least £542.88 for their last monthly assessment period (though note that payments from Universal Credit are not considered to be part of household income).
The scheme allows those eligible to save up to £50 a month for two years and receive a 50% government bonus. Account holders will then be able to continue saving under the scheme for a further 2 years, and receive another bonus. This could see those on low incomes receive a bonus of up to £1,200 on maximum savings of £2,400 over 4 year. After the 4 years, the Help to Save account will be closed and savers will not be able to reopen it or open another Help to Save account. The account balances are expected to be rolled over into successor accounts.
The new scheme could benefit an estimated 4 million people across the UK. There are no limits on how the money used can be spent but it is hoped that the money will be saved for urgent costs. Money paid into the account can be withdrawn at any time, but this could affect the size of the bonus payment.