This Morning: Martin Lewis discusses Help to Save scheme
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An estimated 3.5 million individuals entitled to Working Tax Credits, Child Tax Credits or Universal Credit were thought to be eligible to open a Help to Save account when it launched in 2018, but latest statistics show that only 284,000 accounts have been opened to date. That’s more than three million people in the UK who are walking away from free cash.
Established to help those on a low income put money away for the unexpected or start a rainy day fund, the scheme matches 50p for every £1 invested by the individual.
If someone puts away the maximum of £50 a month for four years, they will receive a bonus of £1,200 by the Government at the end of that period.
So why are so many people not taking advantage of what is essentially free cash?
Experts say that participation depends on individual circumstances, and it may not be possible for everyone given these difficult economic times.
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An HMRC spokesperson told Express.co.uk: “Latest statistics from June 2021 reveal that more than 284,000 accounts had been opened with 91percent of account holders saving the maximum of £50 per month.
“The Help to Save scheme is specifically designed to support working households on low incomes to build a rainy-day savings fund while encouraging a regular, long-term savings habit.
“They can save between £1 and £50 each month and earn two tax-free bonuses over four years, worth up to £1,200.
“More than 90 percent of account holders are saving the maximum £50 each month. It is quick and easy to set up an account, just search ‘help to save’ on GOVUK.”
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Not only are millions of Brits not taking advantage of the Help to Save scheme, but as many as 50,000 people have opened these savings accounts yet still haven’t managed to put any savings aside.
Speaking exclusively to Express.co.uk, Rachel Springall from Moneyfacts said it is extremely difficult for those on a low income to start saving and this could be why millions of people haven’t even opened an account.
She said: “Whether someone has £1 or £50 to save each month depends on their circumstances, and many out there may not have any savings to fall back on if they are on a low income and have no spare cash to save.
“Those eligible for Help to Save would be wise to take advantage of the scheme if they can, as not only could it improve the savings habit and build a pot for emergencies, but the Government will also boost their pot.
“Little and often is the key to saving towards any goal, but starting this can feel like a hurdle when money is tight.”
Who is eligible for a Help-to-Save account?
UK residents are entitled to open a Help-to-Save account if they are:
- Entitled to working tax credit or child tax credit
- Receiving Universal Credit and have earned income of at least 16 hours a week at the National Living Wage (from April 1, 2021, this is equivalent to £617.76 a month) in the previous assessment period.
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Finding the spare cash to put a little towards saving isn’t easy, but Ms Springall recommends trying a budgeting app and seeing if there is anything people can cut back on.
“Using a budget app may be the easiest way for someone to see where they are overspending each month and what they could cut back on, free apps like Money Dashboard are great,” she added.
“Making lunches and coffees at home for work can save a significant sum over a month, so can cancelling unused memberships and even scrutinising a monthly shop to be more mindful of non-essential purchases.”
And as well as making these small changes, it’s good advice to set up a direct debit at the beginning of the month, so the money is transferred automatically before people can even think about spending it.
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