Will this government scheme help low-income households to save a ‘rainy day’ fund?

The Help to Save scheme is designed to support low-income households in building their financial resilience. Picture: Sonya Duncan

The Help to Save scheme is designed to support low-income households in building their financial resilience. Picture: Sonya Duncan


The government has launched a new savings scheme to help people on low incomes start a “rainy day” fund.

The UK-wide initiative is available to working people on tax credits and universal credit and rewards savers with an extra 50p for every £1 saved.

Although specific targets for take-up have not been set, hundreds of thousands of people are predicted to benefit from the Help to Save scheme over its lifetime. Some 3.5 million people currently meet the eligibility criteria.

Under the scheme, people saving the maximum of £2,400 over four years would receive a bonus of £1,200.

The government says the money would help build households’ financial resilience, providing a handy pot for emergencies such as broken appliances or savings goals such as a family holiday.

Money put into the accounts is held with treasury-backed body NS&I. The accounts can be accessed online or via telephone banking for those who do not have access to the internet.

The government is working with housing associations and money advice organisations to raise awareness of the scheme.

A previous an eight-month pilot saw more than 45,000 customers deposit a total of more than £3m.

John Glen, economic secretary to the treasury, said: “Savings shouldn’t be a luxury, they are an essential part of planning for the future.

“But for some, putting away even a tenner each month can be a tough habit to get into. Whether you’re saving up to take the family on a much-needed holiday, or to take the next step in life, Help to Save is designed to make saving possible for every hard-working person in this country.”

The scheme was welcomed by StepChange Debt Charity, which said that for its clients, this type of saving may be particularly helpful to help build financial resilience for the future.

Phil Andrew, chief executive of StepChange Debt Charity, said: “98% of our clients have no savings at all at the point they turn to us, and only 1% have £1,000 or more.

“Yet we know that having £1,000 in rainy day savings virtually halves the risk of falling into problem debt, so helping lower income working households to build savings should be an important policy goal.

“We campaigned for Help to Save and it is a good scheme.”

How do Help to Save accounts work?

Account holders can put away between £1 and £50 every calendar month and accounts last for four years from the date they are opened.

After two years, when people will have up to £1,200 in their pot, savers receive a 50% bonus on their savings.

Then, if they continue to save, another 50% tax-free bonus is available after four years.

How much is saved and when is up to the account holder and they do not need to pay in every month to get a bonus.

People can still receive bonuses even if they make withdrawals. The bonus paid after the first two years equates to 50% of the highest balance saved.

After four years, the bonus equates to 50% of the savings paid into the account above the highest balance saved in the first two years. Bonuses are paid into savers’ bank accounts, not their Help to Save account.

Savers using the scheme can close their account at any time - but if they close their account early they will miss their next bonus and will not be able to open another one.

If a saver’s situation changes and they stop receiving working tax credit or universal credit, they can still save and receive any bonus they are entitled to.

To apply, savers can visit or use the HMRC app.

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