In a significant move to support low-income families, Chancellor Rachel Reeves has announced the Help to Save scheme will become a permanent government programme. This decision reverses the previous plan to end the scheme in 2027 and will see it extended to hundreds of thousands more people.
What is the Help to Save Scheme?
The Help to Save scheme is a government-backed savings account designed specifically for individuals and families on low incomes. It provides a powerful incentive to save by offering a 50% bonus on the highest balance saved over a two-year period.
Eligible participants, primarily those receiving Universal Credit, can save between £1 and £50 each month. They are not required to make a deposit every month, offering flexibility for those with fluctuating incomes. Over a maximum of four years, savers can earn up to £1,200 in free cash bonuses from HMRC.
Key Changes and Expansion
The Treasury confirmed the major policy shift on social media platform X (formerly Twitter). The announcement stated: "The Help to Save scheme just got even better! The scheme is now permanent for all those eligible. And from April 2028, will be extended to all individuals in receipt of Universal Credit who have caring responsibilities. This will help an additional 1.5 million families on low incomes."
This expansion marks a clear widening of the scheme's reach under the Labour government. The move to permanency provides long-term financial security and planning certainty for millions of savers who rely on the bonus to build a financial buffer.
Expert Analysis and Debt Warning
Financial expert Martin Lewis, founder of MoneySavingExpert.com, has praised the scheme's clever design. He highlighted a crucial feature: the bonus is calculated on the highest amount saved, not the final balance.
"The fact that you're given the bonus based on the highest amount you've saved means you can build up your savings until you have an emergency... and then use your savings instead of borrowing. But you'll still be rewarded for the fact that you saved in the first place," Lewis explained.
However, the 52-year-old consumer champion also issued an important caution. He urged people with very expensive debts, such as payday loans or high-cost credit cards, to prioritise clearing those debts before focusing on saving, due to the typically exorbitant interest rates charged.
The scheme is noted for its easy-access nature, allowing savers to withdraw funds when needed without penalty, making it a practical tool for managing unexpected expenses. The government's decision to cement and grow the Help to Save initiative represents a sustained commitment to improving financial resilience among the UK's lowest earners.
