A new savings scheme to help people on low incomes kick-start a “rainy day” fund and build up their financial resilience has been launched.
The Government initiative, which is available to working people on tax credits and universal credit, rewards savers with an extra 50p for every £1 saved.
Hundreds of thousands of working people are expected to benefit from Help to Save over the lifetime of the UK-wide scheme, although specific targets for take-up have not been set. Around 3.5 million people currently meet the eligibility criteria.
People saving the maximum of £2,400 into the Help to Save scheme over four years would receive a bonus of £1,200.
The money could give people a handy pot for household emergencies such as a broken boiler or savings goals such as a family holiday, for example. For some, it could be an alternative to taking on costly debts.
Help to Save accounts cannot be accessed by going into physical bank branches.
Money put into the accounts is held with Treasury-backed body NS&I.
They are online accounts, with telephone banking for people who cannot access the internet.
Account holders can put away between £1 and £50 every calendar month and accounts last for four years from the date they are opened.