In a significant move for low-income households, Chancellor Rachel Reeves has used her Budget to announce a major extension to a key savings scheme, potentially putting hundreds of pounds into the pockets of millions of Universal Credit claimants.
A Permanent Financial Lifeline
During her Budget speech, the Chancellor confirmed that the Help to Save scheme will become a permanent government initiative. The programme was previously scheduled to be closed in 2027, but its new permanent status offers long-term financial security for savers on low incomes.
This decision opens the door for a vast number of people to benefit. With Department for Work and Pensions (DWP) data indicating around 8.3 million individuals currently receive Universal Credit, millions are now eligible to take advantage of the extended scheme.
How the Help to Save Scheme Works
Help to Save is a government-backed savings account designed specifically to encourage people on low incomes to build a financial buffer. The scheme offers a generous 50% bonus on all deposits made by participants.
Savers can deposit between £1 and £50 every month. For every £1 they put aside, they earn an additional 50p from the government. This means that individuals who save the maximum amount of £50 per month over the full four-year term will save a total of £2,400 and receive the maximum total bonus of £1,200.
The bonus payments are paid directly into the saver's bank account at the end of the second and fourth years, providing two substantial cash injections.
Getting Started and Managing Your Account
Myrtle Lloyd, HMRC's Chief Customer Officer, urged people not to miss out: "Millions have been paid out to people who are putting aside whatever cash they can spare each month - so don't miss out on making the most of your savings. Go to GOV.UK to open your Help to Save account today."
The process has been streamlined for ease of use. A fifth of customers have already used the official HMRC app to open an account, which also allows them to track their savings progress and view their anticipated bonus payments.
Deposits can be made flexibly via debit card, standing order, or bank transfer. While withdrawals are permitted at any time, it is important to note that taking money out could affect the final bonus payment, so consistent saving is encouraged for maximum benefit.
The scheme's impact is already being felt. Recent figures from HM Revenue and Customs (HMRC) show that nearly half a million people have already shared over £220 million in bonus payments, proving its value as a powerful tool for financial resilience.
