Get the most out of your savings with a 50 per cent boost from the Government
OFFERS for ‘£1,000 of free money’ are normally only found in dodgy emails – but this promotion comes from the Government.
Chancellor Rishi Sunak is dishing out 50 per cent boosts for funds deposited in its Help to Save accounts, worth up to £1,200.
But, despite many people needing to rely on savings during the Covid crisis, millions are missing out on payouts as they have not opened the mega-interest accounts.
Around four million people on low or no income qualify for Help to Save but only 300,000 are using it.
Many workers who started claiming Universal Credit when their salaries fell due to lockdown are eligible.
Anyone who receives Working Tax Credit, or is entitled to it and receives Child Tax Credit, can also also join up.
Customers pay in up to £50 per month for four years and the Government pays out a 50 per cent bonus after two and four years, with up to £600 for each of the two payments. In total, £420 million of Government payouts are available.
Sebrina McCullough, head of external relations at the Financial Wellness Group, said: “It’s free money. It’s a bonus of 50p for every £1 you save.”
Tom Henderson, technical officer at the Low Incomes Tax Reform Group, said: “You can open an account if you are eligible now, and retain it even if you stop claiming benefits.”
Here’s how to cash in:
WHO IS ELIGIBLE?
Anyone who receives Working Tax Credit, or is entitled to Working Tax Credit and receives Child Tax Credit. Or anyone who claims Universal Credit and earned £617 or more from paid work in the past month. Your partner’s income is included if it is a joint claim.
And you can keep using the account even if your financial situation improves and you no longer claim benefits. Use your Government Gateway user ID and password to apply — or create log-ins if you do not have them. Apply at bit.ly/3dgJ3hb.
HOW DO I SAVE?
Pay in up to £50 per month by debit card, standing order or bank transfer for the four years that the account operates. If you save the maximum amount each month, you would have paid in £2,400. The account stays open if you do not pay in money every month.
If you want to withdraw money, that is allowed – but remember, it means your bonus will be smaller, as you can only pay in £50 per month, even if you have withdrawn money from the account.
WHAT DO I GET BACK?
A 50 per cent bonus at the end of the second and fourth years. £1,200 is the maximum you could receive. At the end of year two, you will get 50 per cent of the highest balance reached during the first two years.
If you save the maximum £50 per month, your account will have £1,200 in it after two years, so your bonus will be £600. At the end of year four, you get another 50 per cent bonus, based on money paid in during years three and four. The top payout possible is another £600. So in total that will be £1,200 over four years.
IF the amount you pay into your Help to Save account takes you or your partner’s personal savings over £6,000, this could affect your Universal Credit and Housing Benefit payments. The 50 per cent bonuses the Government pays you are not included in your £6,000 allowance. Working Tax Credit will not be affected by Help to Save savings or bonuses.
YOU will miss out on your bonuses if you decide to close your account before the end of the second or fourth years. And you will not be allowed to open another Help to Save account.
IF you are unsure about opening a Help to Save account, you can read more about it at: www.moneyadviceservice.org.uk.
Super saver susan
MUM-of-two Susan Rogers has battled out of debt and is now looking forward to a bumper Help to Save payout.
The 41-year-old healthcare worker opened an account two months ago and is stashing away £50 per month.
It means she is set to pocket a £600 windfall in 2023 and another £600 in 2025, due to the giant 50-per-cent bonuses on the government scheme.
She has turned her finances around after ditching impulse buys in favour of saving.
Susan, whose children are aged five and eight, qualifies for Help to Save because she receives Working Tax Credit.
She said: “I wasn’t aware of the scheme until April, but I have now opened an account and am putting the maximum of £50 per month into it.
“I’ve had credit card debts but Covid has made me consider purchases before spending. I’ve become smarter with unplanned spends and am looking forward to increasing my savings potential.”
- Susan’s name and age have been changed for this article.
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