Wondering how Help to Save accounts work? This guide has all the information you need, including when Help to Save accounts will be available, who can apply for an account and how much bonus money you might earn.
What are Help to Save accounts?
A new type of bank account designed for low-paid workers, looking to build up their savings.
Help to Save accounts will be available to an estimated 3.5 million people by April 2018 at latest.
How do they work and how much can I earn?
If you have an account, you can benefit from a 50% bonus when you deposit between £1 and £50 every month.
Accounts must be open for a minimum of two years before you can access the bonus. After two years, savers can decide to keep their accounts open for another two years, or withdraw their money and close the account.
Account holders can save up to £2,400 (48 x 50) and earn a maximum £1,200 bonus, over four years.
Scroll down for some examples of how the account might work for you.
Who can get a Help to Save account?
The accounts were created for anyone:
- Who gets Universal Credit with minimum weekly household earnings, equivalent to 16 hours at the National Living Wage, or
- Who gets Working Tax Credit.
You will only be able to open a single Help to Save account.
When will Help to Save accounts be available?
They are expected to launch by April 2018 at latest.
Once they are available applicants have five years to apply.
How do I open a Help to Save account?
Once the scheme launches, you will be able to open an account using a dedicated government website, or over the phone.
How do I deposit money in a Help to Save account?
There will be a few ways to deposit money into an account, including:
- Standing orders
- One-off BACS payments
What about closing Help to Save accounts?
Help to Save accounts close automatically once the account holder has been given the bonus payment.
This can happen after two years, or four if you decide to keep it open that long.
Some examples of how you might benefit from opening a Help to save account:
1. Andrew opens a Help to Save account and pays in £10 a month for two years.
2. At this point, he has saved up £240 and earnt a bonus of £120 (50%).
3. He decides to withdraw his money and close the account.
1. Jack opens a Help to Save account and pays in £20 a month for two years.
2. At this point, he has saved up £480 and earnt a bonus of £240 (50%).
3. Instead of closing the account and claiming the bonus, he decides to keep paying in £20 per month for another two years.
4. Over four years, Jack has saved up £960 and earnt a total bonus of £480.
1. Jill opens a Help to Save account and pays in £20 a month for 18 months.
2. At this point, she has saved up £360 and a potential bonus of £180 (50%), but her boiler breaks down and she needs to use all the money in her Help to Save account to pay for a replacement.
3. Two months later she is able to start saving £20 a month again and has a balance of £80 at the end of the two years. She is eligible for a bonus of £180 (based on her maximum saving figure of £360), but decides to keep paying in for another two years.
4. Over the next two years, Jill makes regular payments and ends up with a total balance of £500.
5. With this she earns a bonus of £180, for the first two years, and a bonus of £70 for the next two years
6. She earns a total bonus of £250.
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