Government Boosts Savings for Half a Million Low-Income Brits Through ‘Help to Save’ Scheme

The ‘Help to Save’ scheme offers low-income individuals a 50% government bonus on their savings. This initiative, now extended until 2027, aims to help build financial resilience.

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A person adding coins to a jar, with "Help to Save" displayed
Government Boosts Savings for Half a Million Low-Income Brits Through ‘Help to Save’ Scheme | en.Econostrum.info - United Kingdom

Over half a million low-income savers across the UK are set to benefit from a government-backed savings initiative designed to encourage financial stability.

The ‘Help to Save’ scheme, which has been extended until 2027, will enable an additional 550,000 individuals receiving Universal Credit to participate. Launched in 2018, the scheme helps low-income earners build a savings pot by offering a government bonus of 50% on the amount saved, up to £50 per month.

This extension will offer vital support to those struggling to save, making a significant contribution to improving financial resilience for some of the UK’s most vulnerable citizens. According to Daily Mail, this initiative is seen as an important tool in tackling the growing savings crisis faced by many households.

What Is the ‘Help to Save’ Scheme?

Launched in 2018, the ‘Help to Save’ scheme is designed for low-income individuals who receive certain benefits, helping them to save with a government bonus.

The scheme works by providing a 50% government bonus on every pound saved, up to £50 per month, over a four-year period.

For example, if a saver contributes the full £50 monthly, they will receive a £25 bonus from the government each year. Bonuses are paid at the end of the second and fourth years.

Key Features and Benefits

Savers can deposit between £1 and £50 each month into their account, but they are not required to save every month. The total amount a person can deposit over four years is £2,400, and with the government’s contribution, they could receive a total of £1,200 in bonuses by the end of the scheme.

The Help to Save scheme was originally set to end in September 2023, but the government has extended it until April 2025 and now until April 2027.

This extension will allow even more people, specifically 550,000 additional individuals, to join the scheme and benefit from government support.

Impact on Savings Behavior

As of April 2024, a total of 516,000 Help to Save accounts were open, with a total deposit value of £492.5 million. The average savings per account reached around £953.

It’s worth noting that 93% of savers are contributing the maximum amount of £50 each month, demonstrating the popularity and effectiveness of the scheme among participants.

While the Help to Save scheme is having a positive impact on its participants, the UK still faces significant disparities in savings across the population.

One in five Britons have less than £100 in savings, according to newly released data from the Department for Work and Pensions for 2023/2024. On the other end of the spectrum, the wealthiest individuals hold substantial amounts in savings.

For instance, 12% of the UK’s top savers have between £50,000 and £200,000, and 2% have £500,000 or more saved.

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