People who sign up to a HM Revenue and Customs special savings account could be in line for £1,200 free cash bonus – in a scheme backed by financial guru Martin Lewis.
Taking to X HMRC said: “Did you know you could make 50p for every £1 you save with a Help to Save account? It’s a secure and flexible way to build up your savings – pay in what you can, when you can. If you receive Working Tax Credit or Universal Credit you might be eligible.”
Under the rules people who join it and open an account can save between £1 and £50 each calendar month but do not have to pay money in every month.
The scheme has previously been backed by Money Saving Expert founder Martin Lewis who said it allows people to ‘add serious cash with no risk’ and described it as ‘unbeatable’. On X, formerly Twitter, he said: “If you know anyone on Universal Credit especially please do share this with them. It’s an unbeatable form of savings, that can add serious cash with no risk.
“So look in help to save. If you’re eligible for it, you can put up to 50 quid a month in over two years, and then at the end you get 50% of the highest amount in. So let’s just think of this. You put £50 in a month for a year, you’ve got 600 quid. You have a nightmare because this is all about building financial resilience and getting people to have some savings.
“You have a nightmare, your fridge is broken. You need it for the kids. You spend your 600 quid you can’t afford to put any more in. At the end of the two years, the highest amount you had in was £600. You get 50% of that, which is £300. So you get £300 and then whatever you’ve got in at that point, they do it again for the next two years, comparing what you have at the end with what you’re having at the beginning, and you get a 50% bonus.”
People who join it and open an account can save between £1 and £50 each calendar month but do not have to pay money in every month. In terms of how to pay in, people can use a debit card, standing order or bank transfer. There is no limit on how many times people can deposit money, so when there’s a few pounds spare it can be topped up a bit. But the most anyone can pay in each calendar month is £50. For example, if you have saved £50 by 8 January you will not be able to pay in again until 1 February.
The HMRC adds: “You can only withdraw money from your Help to Save account to your bank account.” The real benefits to people come with the two bonuses – which are tax-free and are paid out after two and four years. The HMRC explains: “You’ll get any bonuses you’ve earned even if you withdraw money. After your first 2 years, you’ll get a first bonus if you’ve been using your account to save. This bonus will be 50% of the highest balance you’ve saved.”
“After 4 years, you’ll get a final bonus if you continue to save.” The second bonus will be 50% of the difference between 2 amounts – the highest balance saved in the first 2 years (years 1 and 2) and the highest balance saved in the last 2 years (years 3 and 4).
It added: “If your highest balance does not increase, you will not earn a final bonus.” The most a person can pay into your account each calendar month is £50, which is £2,400 over 4 years. The most you can earn from your savings in 4 years is £1,200 in bonus money. Any bonus is paid into a person’s bank account, not the Help to Save account.
The HMRC gives an example of how it would work: “You pay in £25 every calendar month for 2 years. You do not withdraw any money. Your highest balance will be £600. Your first bonus is £300, which is 50% of £600. In years 3 and 4 you save an extra £200 to grow your highest balance from £600 to £800. Your final bonus is £100, which is 50% of £200. Even though you withdrew some money after your balance was £800, this does not affect your bonus.”
Latest figures reveal that almost 450,000 customers opened a Help to Save account between September 2018 and March 2023, with nearly £372.5 million paid into accounts during that time. Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Hundreds of thousands of people are benefitting from Help to Save. It’s a great way of saving whatever you can and the government will top up your savings by 50%. It’s quick and easy to apply online or via the HMRC app. Just search ‘Help to Save’ on GOV.UK to find out more and apply today.”
