This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy. Read more

help to save account

Guide on Help-to-Save Account Scheme in the UK


What is the Help-to-Save Account Scheme?

The Help-to-Save Account Scheme was introduced by the UK government in September 2018. It is available to individuals who receive Working Tax Credit or Universal Credit. This savings initiative operates through National Savings and Investments (NS&I) and offers a secure and tax-free way for eligible savers to put money aside.

The scheme is divided into two components:

  • Savings Account: In this component, eligible individuals can save up to £50 per month for a maximum of four years. Over the four-year period, savers can accumulate a total of £2,400 in contributions.
  • Bonus Payments: The Help-to-Save Account offers a bonus payment to incentivize saving. After the first two years, savers will receive a tax-free bonus equivalent to 50% of the highest balance they achieved in those two years. This bonus is paid directly into the account, providing an extra boost to the savings.

Eligibility Criteria for Help-to-Save Accounts

To open a Help-to-Save Account, individuals must meet certain eligibility criteria set by the government. The primary requirements include:

  • Receipt of Working Tax Credit or Universal Credit: To be eligible, individuals must be receiving either Working Tax Credit or Universal Credit. This is one of the key criteria to participate in the scheme.
  • Aged 16 or Over: Applicants must be at least 16 years old to open a Help-to-Save Account.
  • UK Resident: The scheme is only available to residents of the United Kingdom.

Benefits of Help-to-Save Accounts

The Help-to-Save Account Scheme offers several benefits, making it an attractive option for eligible savers:

  • Generous Bonus Payments: The 50% bonus on savings after two years can significantly boost the overall savings, providing an excellent incentive to participate in the scheme.
  • Tax-Free Savings: Contributions made to the Help-to-Save Account are tax-free, ensuring that savers get to keep all the money they save and the bonus they earn.
  • Flexibility: The scheme allows savers to contribute as little as £1 per month up to a maximum of £50, making it flexible and accessible to a wide range of savers.
  • Encouraging Saving Habits: By providing rewards and benefits, the scheme encourages a regular savings habit, helping individuals build financial resilience and security.

 How to Open a Help-to-Save Account

Checking Your Eligibility

Before proceeding with the account opening process, ensure that you meet the eligibility criteria for the Help-to-Save Account Scheme. Remember the key requirements:

  • Receiving Working Tax Credit or Universal Credit: To qualify for the scheme, you must currently be receiving Working Tax Credit or Universal Credit.
  • Age: Applicants must be aged 16 or over to open a Help-to-Save Account.
  • Residency: The scheme is available only to residents of the United Kingdom.

 Step-by-Step Guide to Opening a Help-to-Save Account

Once you've confirmed your eligibility, follow these steps to open your Help-to-Save Account:

  • Gather Required Information: Prepare the necessary documents, including your National Insurance number, bank account details, and personal information.
  • Visit the Official Website: Access the official Help-to-Save Account website, which is managed by National Savings and Investments (NS&I).
  • Register or Log In: If you are a first-time user, register for an account on the website. If you already have an account, log in using your credentials.
  • Start the Application: Navigate to the section for opening a Help-to-Save Account and begin the application process.
  • Verify Eligibility: The application will prompt you to confirm your eligibility by providing details about your current benefits.
  • Enter Personal Details: Fill in your personal information, including your full name, address, and contact information.
  • Provide Bank Account Details: Input the bank account details where you want to set up your Help-to-Save Account. This is the account where your contributions and bonus payments will be deposited.
  • Set Monthly Contribution: Decide on the monthly contribution amount you wish to save. You can save as little as £1 per month up to a maximum of £50.
  • Review and Submit: Carefully review all the information provided in the application, making sure it is accurate. Once you are satisfied, submit the application.
  • Account Activation: After successfully submitting the application, you will receive confirmation of your Help-to-Save Account activation. You can now start making contributions.

 Contribution Limits and Regulations

  • Monthly Contribution Limit: You can save between £1 and £50 per month in your Help-to-Save Account.
  • Two-Year Rule: After two years of saving, you will receive a bonus based on the highest balance you achieved during that period.
  • Four-Year Limit: You can continue saving in your Help-to-Save Account for up to four years, after which the account will be closed.
  • No Penalties for Withdrawals: You can withdraw money from your Help-to-Save Account at any time without incurring penalties.

By following these steps and understanding the contribution limits, you can successfully open and manage your Help-to-Save Account, taking full advantage of the scheme's benefits. 

 Understanding Bonus Payments

One of the most appealing aspects of the Help-to-Save Account Scheme is the opportunity to earn bonus payments on your savings. These bonuses can significantly enhance your total savings over time. 

 How Bonus Payments Work

The Help-to-Save Account Scheme offers a tax-free bonus to reward consistent savers. After two years of saving, the government calculates the bonus based on the highest balance you achieved during that period. The bonus is equivalent to 50% of your savings, capped at a maximum bonus amount.

To be eligible for the bonus, you must have made regular contributions and maintained a savings habit for the first two years. The bonus payment is made directly into your Help-to-Save Account, increasing the overall balance available for your financial goals.

 Entity-Based SEO: Approved Providers for Help-to-Save Accounts

To ensure the success of your Help-to-Save Account, it's essential to open it with a reputable and approved provider. As of the current regulations, the Help-to-Save Account Scheme is offered through National Savings and Investments (NS&I) only. It's essential to use the official NS&I website or channels to open your account securely.

By understanding the mechanics of bonus payments and the potential earnings, you can effectively strategize your saving approach to maximise the benefits of the Help-to-Save Account Scheme.

Managing and Maximising Your Help-to-Save Account

Making Regular Contributions

Consistency is the key to success with the Help-to-Save Account Scheme. By making regular contributions, you can ensure a steady buildup of your savings and increase your chances of qualifying for bonus payments. Set up automatic transfers from your bank account to your Help-to-Save Account each month to maintain a disciplined saving habit.

4.2 Strategies for Maximising Bonus Payments

To maximise your bonus payments, aim to reach the highest possible balance within the first two years. The bonus is calculated based on this peak balance, so making extra efforts to save more during this period can lead to more significant bonus earnings. Explore ways to increase your contributions, such as redirecting windfalls or cutting down on non-essential expenses.

Assessing Your Saving Progress

Regularly assess your saving progress to stay on track towards your financial goals. Monitoring your Help-to-Save Account's growth can motivate you to continue saving and take pride in your accomplishments. Review your contributions, bonus earnings, and overall savings growth to make informed decisions about adjustments to your saving strategy.

By actively managing your Help-to-Save Account and following these strategies, you can make the most of this valuable savings opportunity and work towards securing your financial future.

Withdrawals and Impact on Benefits

Understanding the withdrawal rules and the potential impact on benefits is essential when considering accessing the funds in your Help-to-Save Account. 

Understanding Withdrawal Rules

The Help-to-Save Account Scheme allows you to withdraw money from your account at any time. There are no restrictions or penalties for withdrawals. This flexibility makes it a useful option for building emergency funds or meeting unexpected expenses. Whether you need to cover a medical emergency or a sudden repair, your Help-to-Save Account provides a secure and accessible source of savings.

Effects on Eligibility for Other Benefits

It's essential to be aware of how withdrawals from your Help-to-Save Account can impact your eligibility for other benefits. The funds in your Help-to-Save Account are not considered when calculating your entitlement to means-tested benefits. This means that withdrawing from your Help-to-Save Account will not affect your eligibility for benefits such as Universal Credit or Housing Benefit.

However, if you use the withdrawn funds to boost your savings in other accounts, such as regular savings accounts or ISAs, the additional savings may be taken into account when assessing your eligibility for means-tested benefits.

Mitigating Risks and Making Informed Decisions

While Help-to-Save Accounts offer easy access to your savings, it's essential to consider the purpose and necessity of withdrawals. Before making a withdrawal, assess the urgency of your financial need and explore alternative sources of funding. By maintaining a prudent approach to withdrawals, you can strike a balance between meeting immediate financial demands and preserving your Help-to-Save Account's potential for growth.

Comparison with Other Savings Schemes

6.1 Help-to-Save vs. Lifetime ISA (LISA)

Help-to-Save Account:

  • Targeted at individuals receiving Working Tax Credit or Universal Credit.
  • Monthly contributions between £1 and £50 are allowed.
  • Bonus of 50% on the highest balance achieved in the first two years.
  • Total savings capped at £2,400 over four years.
  • Withdrawals allowed at any time without penalties.

Lifetime ISA (LISA):

  • Available to individuals aged 18 to 39.
  • Monthly contributions up to £4,000 per tax year are permitted.
  • Bonus of 25% on contributions, credited annually.
  • Total savings can be used for either retirement or first-time home purchase.
  • Withdrawals before age 60, other than for a first home, may incur penalties.

6.2 Help-to-Save vs. Regular Savings Accounts

Help-to-Save Account:

  • Geared towards individuals on low incomes receiving certain benefits.
  • Provides a government bonus to incentivize regular saving.
  • Flexible monthly contributions between £1 and £50.
  • Tax-free growth on contributions and bonus payments.
  • No penalties for withdrawals at any time.

Regular Savings Accounts:

  • Open to the general public, regardless of income level.
  • Typically do not offer government bonuses.
  • Variable monthly contributions, often with minimum requirements.
  • May be subject to income tax on earned interest.
  • Penalties may apply for early withdrawals depending on the account terms.

6.3 Entity-Based SEO: Top Savings Schemes in the UK

When comparing savings schemes, it's essential to explore the various providers offering these accounts. In the UK, the Help-to-Save Account Scheme is offered exclusively through National Savings and Investments (NS&I). For other savings options like ISAs or regular savings accounts, numerous banks, building societies, and financial institutions provide a wide range of choices.

By evaluating the differences and benefits of each savings scheme, you can make a well-informed decision based on your unique financial circumstances and long-term objectives.

 Frequently Asked Questions (FAQs)

Can I open a Help-to-Save Account with joint ownership?

No, the Help-to-Save Account Scheme does not allow joint ownership. Each eligible individual can open and operate only one Help-to-Save Account in their name.

 What happens if I no longer meet the eligibility criteria?

If your circumstances change, and you no longer qualify for Working Tax Credit or Universal Credit, your Help-to-Save Account will remain open. You will not be required to close the account, and you can continue saving until the end of the four-year term.

 Can I transfer my Help-to-Save Account to another provider?

No, the Help-to-Save Account Scheme is available exclusively through National Savings and Investments (NS&I). As of the current regulations, there is no provision to transfer your Help-to-Save Account to another provider.

Can I make withdrawals before the end of the four-year term?

Yes, you can withdraw money from your Help-to-Save Account at any time, without any penalties. The flexibility to access your savings makes it a convenient option for handling unexpected expenses or emergencies.

Will my bonus payments be taxed?

No, the bonus payments received from your Help-to-Save Account are tax-free. You get to keep the full amount of the bonus earned, providing a valuable boost to your savings.

What happens to my Help-to-Save Account after the four-year term?

At the end of the four-year term, your Help-to-Save Account will be closed automatically. You will no longer be able to make contributions, but you can still access the funds in your account as needed.

Latest news

Popular Fixed Income Plan - Pays 5.8% pa with Monthly Income

Are you getting 5.8% fixed from your capital?  Read More »

Newsletter signup

Sign up to our Newsletter to get exclusive news and offers direct to your inbox.

Let's get social now! Twitter Facebook

About us is a trading style of Fair Investment Company Ltd.

We've been comparing savings and current accounts for many years so you can trust you're in good hands.