Government Help to Save Scheme for low paid 96% undersubscribed

Government Help to Save Scheme for low paid
undersubscribed

A few days ago, I talked about how women
are saving a lower proportion of their income than men. Today I discover
that savers are failing to take advantage of a new UK Government scheme, as
figures reveal that more than 96% of those eligible are missing out on a 50%
top-up bonus worth up to £1,200.

The Help to Save account, launched last September, was
designed to encourage people on low incomes to save for their future.
However, statistics released by HM Revenue & Customs show that only 132,000
of the 3.5 million people eligible have opened an account.

The scheme allows people on welfare benefits, such as
working tax credit and universal credit (combined with certain level of
household income) to save up to £50 a month, or £600 per annum, for four years,
which will be topped up by the Government by 50p for every £1 saved. 

The Help to Save accounts can be held for four years, with a
maximum of £2,400 saved with a further £1,200 paid in by the Government.

Anna Bowes, of Savings Champion, the comparison site, told
the Telegraph that whilst the Government should be encouraging people to save she
was not surprised by the low take-up.

“A lot of this group will not have any spare money to save
so it’s not surprising that there’s not been a huge take-up,” she added. “For a
lot of people on lower incomes, saving and investing aren't going to be very
high on their list of priorities. That being said, it’s encouraging to see
132,000 people have been able to take advantage.”

Ms Bowes questioned how well the scheme had been publicised,
since most people have no idea it exists.

But HMRC argue that account holders were already eligible
for £14m in bonuses. Tax free bonus payments are allocated every two years.
Claimants can only open one account.

John Glen, the economic secretary to the Treasury, said:
“Saving shouldn’t be seen as a luxury but as an essential part of planning for
the future.

“That’s why I launched the Help to Save scheme last year,
and it’s been great to see so many people using it to put money aside for
themselves and their loved ones.”

The scheme looks attractive, but is being sold to a market
which is short on cash. The fact that someone qualifies for a benefit would
indicate that they have very little or no spare money.

Word of the Day

Universal Credit is a state
benefit which is replacing 6 other benefits with a single monthly payment if
you're out of work or on a low income

Universal Credit
will replace the following benefits:

·       
Child Tax Credit

·       
Housing Benefit

·       
Income Support

·       
income-based Jobseeker’s Allowance (JSA)

·       
income-related Employment and Support Allowance
(ESA)

·       
Working Tax Credit

If you currently
receive any of these benefits, you cannot claim Universal Credit at the same
time.

Universal Credit is
being introduced in stages across the UK. You do not need to do anything until
you hear from the Department for Work and Pensions (DWP) about moving to
Universal Credit, unless you have a change in circumstances.

Universal Credit is
still being rolled out across the country, but has been criticised by landlords
with tenants on housing benefit for being slow to start.

There are more examples and practical
steps to getting rich and being happy in my book, Yes, money can buy happiness,
I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much
more. Check it out on Amazon http://bit.ly/2MoneyBook.

See also:

Women Need
to Invest More Money to Secure Future Prosperity