Help to Save Scheme is to be introduced September 2018
Date online: 08/06/2018
What’s the scheme?
Help to Save – announced in the March 2016 Budget – is aimed at helping 3.5 million people on low incomes kick-start their savings pots.
Savers who qualify are able to set aside up to £50 a month.
After two years of saving, the Government pays a bonus of up to £600 – that's the equivalent of 50% of the maximum £1,200 you can personally save into the account.
You can then choose to continue saving into the scheme for another two years and get paid a further maximum bonus of £600.
Over the four years, savers could accumulate a pot of £3,600 under the scheme and £1,200 of it will have come from Government coffers.
When does it launch?
The Help to Save scheme was set to kick off in April 2018 but has been put back to October 2018. A trial will start from January 2018.
Details of providers have yet to confirmed.
Who does it help?
Help to Save is open to anyone who is in work and receives Working Tax Credits or the Universal Credit with a monthly individual or household income of at least £542.88.
What can the money be used for?
There are no restrictions around how the money can be used as the scheme's primary aim is to help people build up a 'rainy day' fund.
However, aspiring first-time buyers can put it towards the deposit for a home if they wish.
What else has the Government done to help people saving to buy a home?
While £3,600 may not be enough for a property deposit on its own, aspiring homeowners can also save through other Government schemes too, such as the Help to Buy ISA.
The savings account enables first-time buyers to save up to £12,000 tax-free, and receive a £3,000 Government bonus on top – the equivalent of £50 for every £200 they have saved. It closes to new applicants in December 2019.
Other help for first-time buyers comes in the form of the stamp duty break on homes worth up to £500,000, which was announced in the 2017 Budget.