Low income savers offered £1,200 ‘bonus’ with new Help to Save accounts

The UK Government has launched a new scheme which will reward savers on low incomes with tax free bonus of up to £1,200.

The new Help to Save accounts offer a tax-free Government bonus of 50p for every £1 saved. Savers can pay in from £1 to £50 each calendar month. The maximum deposit over a 4 year period is £2,400, which will mean a Government bonus of up to £1,200.

Accounts are available for individuals and households eligible for working tax credit, or those claiming Universal Credit with a household income above a certain amount.

The scheme has been launched after research by the Money Advice Service estimated that a quarter of households have total financial assets of less than £1,000 and 4 in 10 working age people lack a savings ‘safety net.’

In the Scottish Borders, average weekly pay is £56 a week lower than the Scottish average, meaning many households struggle to save. Local MP John Lamont has said this scheme could help many achieve a savings safety net with Government help.

Welcoming the new initiative, John Lamont MP said: “Many people in the Borders, particularly those on low incomes, would like to save but budgets are tight and interest rates are so poor it hardly seems worth it.

“This new UK Government backed scheme effectively tops up every pound you put aside with an extra 50p. It is designed specifically for those on low incomes - people who can afford to put away between £1 and £50 a month. The benefits are significant and savers can receive a bonus of up to £1,200 after a few years.

“I very much welcome Help to Save. It has the potential to help thousands of my constituents achieve the safety net of some savings.

“I’d urge Borderers to take a look at these accounts at www.gov.uk/helptosave.