interactive investor comments on latest help to save figures

HMRC has today unveiled its latest Help to Save figures. 

The Help to Save scheme, which launched in 2018, is to help people claiming universal credit or working tax credits to save. It pays a bonus of up to 50% on the amount saved up to £1,200 over four years. 

Highlights include:

• During the past six months (August 2019 - January 2020), over 30,000 Help to Save accounts have been opened 
• The total number of accounts opened now stands at 163,000, a 23% increase on the total number of accounts opened by the end of July 2019
• In total, around 126,000 individuals have now made a deposit to their Help to Save account, a 26% increase compared to the previous release
• Total deposits to the scheme in the six-month period August 2019 to January 2020 exceeded £21 million; this is a 20% increase on the previous six-month period from February 2019 to July 2019.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “After a slow start, the Help to Save scheme appears to be gathering a head of steam. The scheme is relatively new, having only launched in Autumn 2018, and we know from the launches of other initiatives such as the Junior ISA and the Childcare Tax-free account that it takes time for participation to gather momentum.

“Help to Save is a good initiative to help instil a culture of savings among the nation’s most cash-strapped individuals – especially at a time when many conventional savings accounts fail to outstrip the rate of inflation, which means the buying power of the saved cash is reduced in real terms. 

“Keeping some money tucked away in a savings account for a proverbial rainy day is good practice, so there are funds available to foot unexpected expenses – such as the cost to repair a broken boiler, for example. But in truth, building up a savings pot is unlikely to be a key priority for those struggling to make ends-meet. 

“A 50% savings bonus is too good a carrot to ignore for those eligible, but those on a low income should consider whether saving is a priority if it would mean they would have difficulty meeting outstanding debt commitments, particularly priority debts such as council tax, as a result.”