Help to Save scheme
An HMRC consultation paper on the launch of the new Help to Save scheme closed in July 2016. A response to the consultation providing more information on the scheme has been published. The government received 31 formal responses. Most respondents were broadly in favour of the scheme. These responses have now been analysed and the primary legislation necessary to introduce the scheme has been introduced to Parliament.
The new scheme will allow anyone in work and in receipt of Universal Credit or Working Tax Credits to save up to £50 a month and receive a 50% bonus after 2 years that can be worth up to £600. The scheme is expected to be in place by April 2018.
Account holders will then be able to continue saving under the scheme for a further 2 years and receive another £600 bonus. This roll-over will take place automatically. This could see those on low incomes receive a bonus of up to £1,200 over 4 years. After the 4 years have expired account balances will be rolled over into successor accounts.
The new scheme will be open to all adults in receipt of Universal Credit with minimum household earnings equivalent to 16 hours at the National Living Wage or those in receipt of Working Tax Credits. The Help to Save scheme could help an estimated 3.5 million people across the UK to save for the future. It has also been confirmed that the National Savings and Investments bank (NS&I) will be the sole provider of the accounts across the UK.