Help to Save Accounts for Low Incomes on Budget Agenda?

Help to Save schemes have been put ‘under the microscope’ by HMRC as part of a quantitative and qualitative review into success, failures and possible changes to the government savings incentives for low income individuals.

What is Help to Save?

Launched by the Government in 2018.  Eligible, low income savers can invest up to £50pm over 4 years to then a 50% bonus every two years.

Example

• Invest £50pm for 2 years = £1,200.
• 2 years – Government adds 50% i.e., £600 maximum bonus.
  • Total £1,800
• Invest a further £50pm for another 2 years = £1,200.
• End Year 4 – Government adds another 50% i.e., £600 maximum bonus.
  • Total £1,800.
• Total over 4 years = £3,600.

To receive the 2^nd 50% bonus, the balance in your Help to Save account must have achieved a balance that was higher at some point during years 3-4 than the highest balance in years 1-2.

Eligibility

• UK resident (or a member of the British armed forces, Crown servant, or their spouse/civil partner if overseas) and be receiving Universal Credit with a take-home pay of at least £1 in your last monthly assessment period
• Individuals in receipt of Universal Credit and had take-home pay of at least £1 and less than £793.17 or more in their last monthly assessment period.

Take Up Rates

• As of April 2025, 282,700 Help to Save accounts were open with a total of 575,200 opened since 2019. 
• This has been falling since Labour came into power.
• The number of open accounts has been steadily decreasing since May 2024. 
• There are 7.9 million people claiming Universal Credit
• Not a success given people are more worried about the cost of living rather than saving.

HMRC Findings on Help to Save

• It has encouraged new saving habits for some.
• Many savers have a greater sense of financial resilience against financial shocks.
• There is a lack of awareness and understanding about eligibility and how Help to Save works.
• Changes may be needed to information provided to ensure understanding and the 50% incentive to encourage more to save e.g. increase the bonus to 75%.
• Consideration should be given to the frequency of when bonuses are added e.g., yearly, for savers to better see the benefit of saving.
• Make it easier to open an account e.g., an account be opening by HMRC automatically for all those on Universal Credit.

Comment

We have met and talked with many people over the years on Universal Credit and most have not heard of Help to Save. 

Help to Save does create a habit of saving, and we suggest public money would be better spent encouraging more people to save rather than simply handing out ‘cost of living’ and heating allowance grants that in many cases get spent on non-essentials such as TV subscriptions, cigarettes, gambling, and alcohol. 

We are not suggesting that every universal benefit claimant ‘wastes’ public money but there will be millions that do.

We expect Help to Save to play a small part in the Autumn Budget on 26^th November 2025.