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How to get a 50% bonus with Help to Save

author: Adele Kitchen

By Adele Kitchen

More than 264,000 people have opened a Help to Save account since this government scheme was launched in September 2018.

How it works

Help to Save enables people entitled to Working Tax Credit or claiming Universal Credit to gain a 50% bonus on savings, over four years.

With this scheme, account holders can earn an extra 50p for every £1 they save over 4 years. You can pay in any amount between £1 and £50 per month (or you can skip months if you want to). This could be made up of smaller payments (e.g., £10 a week), or a single monthly payment of £50, for example.

You can deposit money into your Help to Save account by debit card, bank transfer or standing order.

How much bonus will you receive?

The size of your bonus depends on how much you save. To get the maximum bonus of £1,200, you would need to save £50 every month for 4 years.

For example, £50 a month over 4 years is £2,400. If you save this amount, you will earn a 50% tax-free bonus of £1,200 on top - bringing your total savings to £3,600.

How is the Help to Save bonus paid?

The Help to Save bonus is paid in two instalments into your personal bank account. The first instalment is paid after two years. If you continue to save, this will be followed by a second instalment at the end of the fourth year.

How are the instalments calculated?

The first instalment is calculated as 50% of the highest balance you’ve had during years one and two. For example, if your highest balance in the first two years is £600, you’ll receive a £300 bonus, which is 50% of £600 (even if you make a withdrawal in that time).

The second instalment is 50% of the difference between:

  • your highest balance in the first two years
  • and your highest balance in years three and four

For example, if you save a further £200 in years three and four and your balance increases from £600 to £800, your final bonus will be £100. This is 50% of £200. It doesn’t matter if you withdrew money from your account after you reached £800 - the bonus is always calculated using the highest balance.

How do I withdraw from a Help to Save account?

You can withdraw money from your Help to Save account whenever you like, by logging in to your account online and requesting a transfer to your bank account.

Bear in mind that withdrawing money could impact the amount of bonus you receive, and you could potentially end up jeopardising your final bonus payment. It depends on when you take the money out and how much you withdraw.

Can I close my Help to Save account early?

Your Help to Save account will close after four years, but you can close it at any time before that if you like. For instance, you may decide to close it after two years, when you receive your first instalment. If you close it before you reach two years though, you won’t receive any bonus.

Once your Help to Save account is closed, you won’t be able to open another one in the future.

Who qualifies for Help to Save?

If any of the following criteria are applicable to you then you may qualify for a Help to Save account:

  • you receive Working Tax Credit
  • you’re entitled to Working Tax Credit and receive Child Tax Credit
  • you’re claiming Universal Credit and you (and your partner if it’s a joint claim) earned £617.73 or more from paid work in your last monthly assessment period

To be eligible you also need to be living in the UK - unless you’re a crown servant or their spouse or civil partner, or a member of the British armed forces or their spouse or civil partner.

It's also worth noting that HMRC doesn’t offer joint Help to Save accounts.

Can you have two Help to Save accounts?

No, each eligible person can only open one Help to Save account. Once you close your account, you won't be able to open another one.

Does Help to Save affect benefits?

Having a Help to Save account won’t affect how much Working Tax Credit you receive. But it could potentially affect your eligibility for Universal Credit and Housing Benefit (and how much you’re entitled to) - if your total household savings between you (and your partner) reach the £6,000 mark.

Any bonus you get from this scheme won’t affect these benefits or count towards the £6,000 threshold.

How can I apply for a Help to Save account?

To apply for a Help to Save account you can:

You have until September 2023 to apply. As part of the process, you’ll need to supply your bank details and National Insurance number, so it’s best to get these details ready beforehand.

Disclaimer: All information and links are correct at the time of publishing.

author: Adele Kitchen

By Adele Kitchen

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