Help-to-save: the latest savings incentive

Draft legislation has been published which will give up to £25 per month to regular savers with a Help-to-save account.

Following on from the relatively recent introductions of the Lifetime ISA, the Help-to-buy ISA, and the recent NS&I investment bond guaranteeing 2.2% interest for up to £3,000, the government has now released draft legislation for a Help-to-save account for those on low incomes:

  • The government will provide a 50% bonus on up to £50 per month savings into a Help-to-save account.
  • The account will mature after 4 years, allowing a total bonus of up to £1,200.
  • It is available for individuals who either:
    • Receive the universal credit and have minimum weekly household earnings of 16 hours at the national living wage, or
    • Receive the working tax credit.
  • The account will be provided by NS&I.
  • The account will be administered by HMRC and applied for through the gov.uk portal.
  • The first bonus will be paid after two years based on the highest balance to that point.
  • The government bonuses will not be taxable income.
  • The bonuses will also not count as income for the universal credit or tax credits system.

The draft legislation is currently being consulted on. The consultation will run until 27 October 2017. The legislation is expected to come into force some time in 2018.

Links

ISA Guide

National living wage rates

The draft legislation and explanatory notes can be found here.

 

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