In a recent announcement the government stated that research had shown that almost half of adults in the UK had less than £500 set aside set for emergencies.
The Government therefore intends to introduce a Help to Save scheme which will be available to individuals in low income households. All adults will be eligible provided they are in receipt of Universal Credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage or those in receipt of Working Tax Credits. They will be able to save up to £50 a month into a Help to Save account and receive a 50% government bonus after two years. Account holders can then choose to continue saving under the scheme for a further two years.
It is intended that the accounts will be available by April 2018 and a consultation on the implementation of the scheme will begin shortly after the Budget.
In the current economic environment it is difficult for many individuals on low incomes to put aside savings to fall back on in times of financial hardship. The government intends that the Help to Save scheme will provide a good incentive to start, particularly given the government’s contribution to the account.