264,000 low-income people sign up to government backed saving scheme

More than 264,000 people have opened a Help to Save account and could be earning money on their savings, according to new statistics from HM Revenue and Customs (HMRC). The data shows that more than 42,000 new Help to Save accounts were created between August 2020 and January 2021. 

Help to Save is a government-backed savings scheme that provides a 'top up' bonus of 50p for every £1 saved over 4 years. It is open to anyone receiving Working Tax Credit, entitled to Working Tax Credit and receiving Child Tax Credit, or claiming Universal Credit if they earned over £604.56 in their last monthly assessment period.  

The scheme was first announced in 2016 by David Cameron, and entered into operation in 2018. It was designed to provide incentives and access to easy to use savings services to people on low incomes who don't have any cash set aside.  

Angela MacDonald, HMRC’s Deputy Chief Executive, said:

“The Help to Save scheme has helped more than 264,000 individuals open a savings account. And regular savers can earn up to £1,200 in bonus payments over 4 years."

Almost 217,000 people have made a deposit to a Help to Save account. Of those depositing into their savings account, the average monthly deposit per person is £48.

The total deposits to the scheme between August 2020 to January 2021 exceeded £40 million, which is the highest recorded amount saved in a 6-month period since the scheme began in September 2018.

Eligible have until September 2023 to set up an account, when the scheme is set to end. The first bonus payment has already been paid out to thousands of individuals, who opened accounts between 12 September 2018 and February 2019.

Data from 2019 showed that roughly 3.4 million eligible people had not set up accounts, and it appears that the scheme is still under-utilised despite the growth. The number of eligible people rocketed throughout 2020, as the COVID-19 pandemic took its impact on the job market.