Help to Save scheme paying £1,200 bonus finally launches for millions of UK’s lowest paid
MILLIONS of low-paid workers can now apply for a new savings scheme that pays out a bonus of £1,200.
The Help to Save scheme allows over 3.5million eligible people to put away up to £50 a month for four years.
At the end of two years, they'll get a bonus of 50 per cent on their balance and then another one at the end of the four years.
That means those who've put away the maximum £2,400 over the four years will get a hefty bonus of £1,200 tax-free.
The scheme is only open to working people who receive certain benefits, such as Working Tax Credit.
Other eligible applicants include those claiming Universal Credit with an household or individual income of at least £542.88 a month, excluding UC payments.
Account holders can save between £1 and £50 a month, they can apply via from today until September 2023 at least.
The money can be withdrawn at any time but this will affect the size of the bonus.
The accounts have been launched amid concerns that millions aren't saving anything for a rainy day or emergency.
The scheme was first announced in 2016, before being launched to just 45,000 customers in January.
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It was supposed to roll-out to all eligible customers in April, but has been delayed until now.
A spokesperson from MoneyFact.co.uk said: “With so many families not even having enough savings for a rainy day it is great to see a scheme finally trying address this vital issue.”
“In comparison to other savings products out there the 50 per cent bonus makes this scheme the best option for those eligible.”
What are the different accounts for savers
WE take a look at the best-paying accounts on the market which will give you the most bang for your buck
- Fixed rate accounts: Fixed-rate accounts will typically offer better rates than normal, easy access accounts, so if you know you can afford to tie your money up for between one and five years, it'll be worth looking at these type of accounts.
With these accounts you'll always need to check how much you need to open the account with - some have really high limits which won't be available to most people. - Current account savings: Rates are much lower on these accounts than in previous years. Yet you can still beat the easy-access rates above on small amounts, and some even offer security of rate. The advatange is once the account's opened, these are locked in, regardless of base rate cuts or banks lowering rates.
- Isa accounts: An ISA (Individual Saving Account) is a tax-free way to save or invest. So, if you're starting to think about saving or investing, it could be a good place to begin. Here's our guide to the best cash ISA account in 2018.
- Easy-access savings accounts: So-called easy-access accounts are meant to be the most straightforward way of putting cash aside for a rainy day. Some of the best ones pay a bonus rate of up to 1.3 per cent - but there's a catch.The eye-catching rate is only valid for a limited period of time, after which it drops and you can end up earning as little as 0.05 per cent. If you want to make the most of the bonus offer, you need to make sure you set a reminder to move your cash to avoid being caught out by this "teaser rate".Alternatively, you can also go for an easy-access account that promises longer-term returns. Here's out round-up of the best easy-access account.
“But, whilst those on low incomes would love to save. The reality is that it can be often very difficult for them to do so.”
Last month, the Bank of England hiked the base rate to 0.75 per cent but many banks did not pass on the increase to savers.
Mark Carney previously said there will be "something more than three" low rises over the next few years, which means it's only a matter of time before banks put up the prices.
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