Millions of Britons could get £1,200 tax-free bonus via savings account which takes '5 minutes' to open
Millions of people could be eligible to open a Help to Save savings account
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Millions of people could be eligible for a tax-free savings boost of up to £1,200 via the savings scheme Help to Save.
The government savings scheme for low-income earners offers savers a 50 per cent bonus payment on money deposited in the account over four years.
Account holders can save up to £50 in the account each calendar month, a total of £2,400 over four years, meaning the highest possible bonus is worth £1,200 over four years.
Money does not need to be paid into the account every month, although this will mean it's not possible to save the maximum bonus.
The Help to Save account has been called a 'very attractive savings scheme'
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HM Revenue and Customs (HMRC) says it takes less than five minutes to open an account.
Customers can check if they are eligible and, if they qualify, go on to apply for an account on the Government website or via the HMRC app.
Hundreds of thousands of people have benefitted from this account but, according to HMRC earlier this year, an additional three million individuals could still benefit from the scheme after it was extended to April 2025.
The bonuses will be paid at the end of the second and fourth years, and the amount will be based on how much has been saved during these periods.
Money can be withdrawn at any point, although this could affect the bonus amount that can be achieved.
After the first two years, account holders will get a first bonus if they have been using their account to save.
This will be 50 per cent of the highest balance saved.
After four years, the final bonus will be paid, if the account holder has continued to use the account to save.
This will be 50 per cent of the difference between the highest balance saved in the first two years, and the highest balance saved in the final two years.
If the highest balance hasn't increased, the saver wouldn't earn a final bonus.
The bonus is paid into their bank account, rather than their Help to Save account.
Victoria Todd, Head of the Low Incomes Tax Reform Group, said: “For those who are able to take part, the Help to Save account is a very attractive savings scheme, especially when the saver is able to maximise their bonuses.
"They can do this by paying in the maximum amount each month and making no withdrawals.
"Those who are eligible can still get bonus payments, even if they can’t save the maximum. That is why we recently welcomed the extension of the scheme to April 2025.”
LATEST DEVELOPMENTS:
People getting Universal Credit may be eligible for a Help to Save account
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Who is eligible for Help to Save?
A person can open a Help to Save account if they are getting:
- Working Tax Credit
- Child Tax Credit – and they're entitled to Working Tax Credit
- Universal Credit and they (with their partner if it’s a joint claim) had take-home pay (pay after deductions such as tax or National Insurance) of £722.45 or more in their last monthly assessment period.