Government expands Help to Save Scheme, offering £1,200 bonuses to 550,000 more UK savers!

In a significant boost for low-income households grappling with the rising cost of living, HM Revenue and Customs (HMRC) has announced the expansion of the Help to Save scheme, making an additional 550,000 UK savers eligible for government bonuses worth up to £25 a month.

The initiative, extended until April 2027, is part of the Government’s broader Plan for Change, aimed at fostering economic growth and supporting the most vulnerable across the UK.

The Help to Save scheme, launched in September 2018, has already paid out millions of pounds in bonuses to over 500,000 savers. With its eligibility criteria now widened to include anyone working and receiving Universal Credit, the scheme is set to provide a financial lifeline to hundreds of thousands more.

Savers can deposit between £1 and £50 per month, earning a generous 50p bonus for every £1 saved. Those who save the maximum £2,400 over four years will receive a £1,200 bonus, paid directly into their bank accounts at the end of the second and fourth years.

Economic Secretary Emma Reynolds hailed the expansion as a cornerstone of the Government’s commitment to supporting working families.

“Security for working people is at the heart of our Plan for Change,” she said. “We want more people to have a bit in the kitty for a rainy day, which is why we are giving hundreds of thousands more working families on tight budgets access to this support.”

The scheme’s accessibility is a key feature, with accounts able to be set up in less than five minutes via GOV.UK or the HMRC app.

In 2024 alone, nearly 18,500 people opened Help to Save accounts through the app, which allows users to manage their savings, check balances, and make deposits via debit card, bank transfer, or standing order. While savers can withdraw funds at any time, doing so may impact the 50% bonus payments, which are calculated based on the highest balance saved in each two-year period.

The scheme has proven particularly impactful in Northern Ireland, where 15,650 savers have collectively deposited £14.7 million since its inception.

Across the UK, 93% of participants contribute the maximum £50 monthly, underscoring the scheme’s popularity and its role in encouraging financial resilience among low-income households.

Myrtle Lloyd, HMRC’s Director General for Customer Services, urged eligible savers to take advantage of the scheme.

“Thousands of customers have already benefitted from Help to Save, and many more are now eligible to get a great return of 50% on top of their savings, no matter how little you can save each month,” she said. “Go online or via the HMRC app to find out more and apply today.”

The extension of Help to Save, originally set to conclude in September 2023 and later extended to April 2025, has been welcomed by financial experts.

Michelle Highman, Chief Executive of The Money Charity, praised the scheme’s role in building financial stability.

“We are really pleased to see the Help to Save scheme extended and made available to more people,” she said. “It’s a brilliant way for people to start to save and to build their financial resilience and futures. Saving even just a little each month will help, and the added 50% bonus payment from the Government means that if you are eligible, then it’s a great place to boost your savings.”

The bonus structure is designed to reward consistent saving. After two years, savers receive a bonus equivalent to 50% of their highest balance during that period.

After four years, a final bonus is paid, calculated as 50% of the difference between the highest balance in the first two years and the highest balance in the subsequent two years. If the highest balance does not increase, no final bonus is paid. All bonuses are transferred directly to the saver’s bank account, not their Help to Save account.

Previously, eligibility was limited to those receiving Tax Credits or Universal Credit and earning at least 16 hours a week at the National Living Wage. The removal of the working hours requirement has significantly broadened access, aligning with the Government’s mission to support those on tight budgets.

As the cost-of-living crisis continues to squeeze household finances, the expanded Help to Save scheme offers a vital opportunity for low-income workers to build a financial buffer.

With the latest statistics, released in September 2024, showing sustained engagement with the scheme, its extension to 2027 is likely to further cement its role as a cornerstone of support for Britain’s most vulnerable savers.

For more information or to apply, visit GOV.UK.