Millions are missing out on free £1,200 saving bonus by not signing up to government scheme

28 February 2019

Millions of people on low incomes could be missing out on a bonus of £1,200 by not taking out a government saving account.

Despite the fanfare surrounding the launch of the government’s flagship Help to Save scheme last year, take up has been lower than expected, new figures show.

When the scheme was launched five months ago the government said up to 3.5 million people could benefit from the reform.

However, only 90,750 accounts have been opened so far, while only around two-thirds have had money paid in (64,350).

The government launched Help to Save in September last year to give people on low incomes a small nest-egg by boosting their savings by 50%.

Tom Selby, senior analyst at AJ Bell, says: “Given the hype around the Help to Save initiative ahead of the 2016 Budget, it is hard to escape the conclusion the programme has been something of a damp squib.

“Given the scheme is aimed directly at those on the lowest incomes, it is perhaps little surprise take-up has been so low. If you are on benefits and struggling to make ends meet, even a significant savings carrot will make little difference to your spending decisions.”

How it works

Anyone who is in receipt of working tax credit or universal credit can open a Help to Save account.

Account holders can save up to £50 a month for up to four years. For every £1 they put away government will reward them with 50p extra.

If account holders put in the maximum £2,400 over four years their cash could be boosted by £1,200, bringing their total savings up to £3,600.

The government will add the first bonus to the account at the two-year anniversary of opening it and then again at the end of the four years.

By saving the full amount account holders will receive a £600 bonus after two years, and a further £600 at the end of the scheme.

Will the scheme pick up?

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says it is too early to say whether the scheme will pick up, although she thinks there are there are some positives.

She says: “The accounts are held with NS&I, backed by the government and trusted by savers, and the government is offering substantial rewards to people for establishing a savings habit, however small.

“Not only do people have to get to grips with a new scheme, but it’s targeted at those on low incomes. In many cases, it’s enough of a struggle to make it from one month to the next, let alone put money aside for the future.

“So while it’s a brilliant scheme in theory, government incentives aren’t going to make much difference if people can’t actually afford to take advantage of them – and there’s every sign that enormous numbers of them can’t.”

An HMRC spokesperson says: “The number of account holders and those making deposits is increasing all the time, and we expect this to continue.

“Independent research has shown that Help to Save is effective in encouraging people to save, and has made saving seem achievable, affordable and worthwhile.

"However, we recognise that saving with Help to Save might not be appropriate for all of the eligible population at any one time.”

Find out more on the government website.


In reply to by anonymous_stub (not verified)

really useful website thank you

In reply to by anonymous_stub (not verified)

IF the govt was serious about people saving WHY is it only for UC & WORKING TAX CREDITS ? it should be open to ALL benifit claimants,& it all depends if after 4 year's would the govt of the day change the goalposts as they all to often do.DON'T TRUST THEM PUT ANY MONEY IN A JAR SO IT'S YOURS TO SPEND..

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