Help to Save – a government scheme I can get behind

Help to Save is a case of a genuinely helpful and potentially transformational Government scheme, editor Edmund Greaves writes. 

Help to Save was launched in 2018. To date those who have benefited from it have see more than half a billion in contributions go into HTS pots.

At a basic level, the scheme pays out a 50% bonus for every £1 you pay in. this is staggered out to incentivise you to keep contributing. If you contribute the full amount over four years, you will get up to £1,200 bonus cash. 

The scheme is available to people in work on low incomes who also claim Universal Credit. The criteria used to be stricter but in 2023 was extended so more savers could benefit. 

A marvel of good incentives

I’m usually fairly cynical about Government schemes such as these – and the myriad of products and accounts which exist.

Take pensions: a great idea, woefully ensnared in complexity and tax liabilities.

Or the LISA: an excellent scheme to help people on the ladder, but riven with design flaws that make it utter ineffective for some.

Or perhaps the greatest white elephant of all, the State Pension, which is woefully misunderstood and catastrophically structured to be unsustainable. 

Of course, all these things have their clear benefits – but nothing quite pleases me like the Help to Save scheme.

Toxic debts

The scheme recognises one of the most pernicious problems that faces those on low incomes who are just trying to do the right thing.

It is all well and good those of us able to save chuntering on about how we should do a lot of it, in reality it ain’t that simple!

Many people when faced with an unexpected bill are forced to turn to debt to get through the problem. I know, because I’ve done it. 

Debt is very quick to become a self-replicating spiral as you try to bridge the gaps and keep your head above water. In a word, debt is AWFUL.

There are practical debts – think mortgages or loans that are paid off on a schedule – but credit cards in particular are pernicious because the companies don’t help you to pay down the debt properly over time. 

This is what makes HTS such a brilliant idea. A 50% bonus is eye-catchingly valuable to those who are able only to put away small amounts. For those who are able to build up that rainy-day fund thanks to the scheme it could mean the difference between debt spirals or getting through.

It could even be the thing that lays the foundation to future long-term saving and stability. This is incredibly important for the Government – simply put – because it makes people less reliant on its largesse (and maybe even in the long term reaps new tax earnings!). 

Having £3,600 in the bank might not seem like much to some, but to others it makes a world of difference. 

One final note

As we said on our latest podcast episode with HMRC’s Emma Ferris, who came on to tell us about HTS, it might be that you are not directly eligible for HTS. 

But what is so important at this point is to tell someone you know who might be able to benefit.

The HTS scheme is unfortunately set to expire in 2027. I for one hope the Chancellor extends it by as much as she can afford. It represents a considerable investment in our lowest earners, who are just trying to do the right thing. 

To find out more about the Help to Save scheme, head to the Gov.uk site.