2.6 C
London
Saturday, January 28, 2023
HomeNewsFinance'It’s super easy': Woman shares 'attractive' account which boosts savings by up...

'It’s super easy': Woman shares 'attractive' account which boosts savings by up to £1,200

Date:

Related stories

spot_imgspot_img


A person can pay into the account as many times as they like and can save a maximum £50 each month. On BBC Money Box, Nicky from Cheshire explained how helpful the scheme has been for her in managing her savings.

Nicky heard about the Help to Save scheme in May 2020 and it seemed like a good option for her.

She said: “I will be able to withdraw in May 2024.

“By that time if I manage to save the maximum amount which is £50 each month, I will receive my second bonus and I will have £2,400 saved at that point if I don’t make withdrawals.

“It’s super easy to save and I set up a direct debit so I don’t have to think about it.”

READ MORE: Inheritance tax: Britons warned of ‘strict rules’ when leaving property to your children

Paul Lewis, presenter of the podcast explained that the 50 percent bonus is an “attractive offer” and people who do join end up valuing it greatly, like Nicky.

Money can be paid into the account by debit card, standing order or bank transfer, and money can only be withdrawn from the account into an individual’s linked bank account.

The bonuses are paid at the end of the second and fourth year. A person can close their account at any time but those who close early will lose the next bonus.

Help to Save is open to people on these benefits:

– Working Tax Credit
– Child Tax Credit – if the person is entitled to Working Tax Credit
– Universal Credit and they (or together with their partner if it’s a joint claim) had take-home pay of £658.64 or more in their last monthly assessment period.

DON’T MISS

Help to Save is the only savings policy targeted at low-income families as eligibility is determined by benefit receipt.

The report showed that while satisfaction with the scheme is high (only three percent of people report being dissatisfied with it), take-up is low, with less than one in ten eligible participants using it.

The report notes this may reflect the fact that many benefit recipients are simply unable to save, but with 92 per cent of monthly Help to Save deposits at the maximum value of £50, people who do engage are clearly keen to save as much as possible.

The report notes this may reflect the fact that many benefit recipients are simply unable to save, but with 92 percent of monthly Help to Save deposits at the maximum value of £50, people who do engage are clearly keen to save as much as possible.

To do this, Help to Save (which is estimated to currently cost just £43million) should be expanded by auto-enrolling benefit claimants into the scheme, doubling the monthly savings cap to £100, and excluding the scheme from the savings rules in Universal Credit that reduce people’s benefit entitlement if they have savings.

Mubin Haq, chief executive at the abrdn Financial Fairness Trust, said:

“Savings are essential to weathering economic shocks, but too many have no savings especially those on lower incomes.

“Government support should be targeted at those most in need but currently it is the richest 10 percent of families who benefit the most from these incentives – their gain is 20 times more than those who are in the poorest 10 per cent of families.

“It’s essential that help is better targeted to those on lower incomes if we are to provide the safety buffer so many need.

“Help to Save provides an opportunity, but at present this is too small-scale and only taken up by a fraction of those who would benefit. Reforms such as auto enrolling benefit claimants could quickly transform this initiative into a much-needed safety net for millions.”



Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here