The UK government has confirmed a £220 million boost for the Help to Save scheme, a programme run by the Department for Work and Pensions (DWP) that encourages low-income earners to save money. This new funding commitment in 2025 means millions of people will benefit from extra support to build a financial safety net.
With the cost of living still affecting households across the country, the scheme is being seen as a crucial step in helping working families and individuals secure their future. In this article, we will explore what the Help to Save scheme is, who can apply, how it works, and what this £220 million boost means for UK savers.
What is the Help to Save Scheme?
Help to Save is a government-backed savings initiative designed for people on low incomes who are receiving certain benefits. The scheme encourages saving by offering a generous government bonus on the money deposited. It was first introduced in 2018 and has since supported thousands of households in building small but valuable savings.
Participants can save up to £50 a month, and at the end of the term, the government rewards them with a 50% bonus on the highest amount saved. This means that over the course of four years, savers can receive up to £1,200 in bonuses on top of their own contributions.
Why the £220 Million Boost?
The government’s decision to inject £220 million into the scheme highlights its importance during tough economic times. Rising energy bills, increased food prices, and higher rents have left many low-income households struggling to save.
The additional funding will ensure the scheme continues to operate smoothly and reach more people. It also reflects the government’s strategy to encourage financial resilience and reduce reliance on debt. By rewarding saving behaviour, the DWP hopes more families can weather unexpected costs and avoid falling into financial hardship.
Who is Eligible for Help to Save?
Eligibility for the Help to Save scheme is restricted to certain groups to make sure support goes to those who need it most. You may qualify if you are:
- Receiving Universal Credit, and you had a household income of £658.64 or more in your last monthly assessment period
- Entitled to Working Tax Credit or receiving Child Tax Credit in combination with Working Tax Credit
You must also be a UK resident. However, certain members of the armed forces and their families may qualify even if living abroad.
How Does the Scheme Work?
The scheme is simple and flexible, making it attractive to those with limited income. Here’s how it works:
- You can save between £1 and £50 each month
- There is no requirement to save the same amount every month
- After two years, you will receive a 50% bonus on the highest balance achieved
- The scheme can continue for another two years, with a second bonus at the end
- The maximum total bonus over four years is £1,200
Unlike many savings accounts, money can be withdrawn at any time. However, doing so may reduce the eventual government bonus.
Why is Help to Save Important in 2025?
For many low-income households, saving money can feel impossible when every penny goes toward essentials. Yet having even a small savings buffer can make a big difference in emergencies, such as when an appliance breaks down or an unexpected bill arrives.
With inflation still affecting UK families in 2025, the Help to Save scheme provides a strong incentive for people to start saving, knowing they will receive significant extra support from the government.
Impact of the Extra Funding
The additional £220 million funding is expected to extend the scheme’s reach to millions more households. The DWP has stated that it will use the funds to:
- Expand awareness campaigns so more people know about the scheme
- Improve access to online and phone application systems
- Ensure prompt payment of bonuses without delays
- Work with financial education charities to help people build better saving habits
This boost demonstrates the government’s confidence that encouraging saving is one of the best ways to support low-income families in the long term.
How to Apply for Help to Save
Applications for Help to Save can be made online through the official Gov.uk website or via the HMRC app. Applicants will need their Government Gateway ID to register.
For those unable to apply online, the scheme can also be accessed by calling HMRC directly. Once registered, savers can make deposits by:
- Direct debit
- Standing order
- Bank transfer
It is straightforward and designed to make saving as simple as possible.
Examples of Potential Savings
To better understand how the scheme works in practice, here are two examples:
- If you save £25 per month for two years, you will have deposited £600. The government will add a £300 bonus, leaving you with £900.
- If you save the maximum £50 per month for four years, you will have saved £2,400. The government will provide a £1,200 bonus, giving you a total of £3,600.
Even smaller contributions add up over time and are significantly boosted by the generous bonus structure.
How the Scheme Benefits Families
Families on tight budgets often have little financial cushion. Help to Save gives them:
- A financial safety net to cover emergencies
- Reduced reliance on expensive credit or loans
- Confidence to manage unexpected costs
- A habit of saving, even in small amounts
These benefits contribute to long-term financial stability and peace of mind.
What Happens if You Withdraw Early?
One of the scheme’s attractive features is flexibility. Savers can withdraw money whenever needed, which makes it more practical than traditional fixed-term savings accounts.
However, withdrawing reduces the balance and therefore may lower the eventual bonus. For example, if you saved £1,000 but withdrew £400 before the two-year mark, your bonus would be based on the highest balance maintained, not the total originally saved.
Common Questions About Help to Save
Do I have to save every month?
No, you can save as little or as much as you want, from £1 to £50 a month.
Will saving affect my benefits?
No, money in a Help to Save account will not affect your Universal Credit payments or other benefits.
Can I open more than one account?
No, each eligible person can only open one Help to Save account.
What happens after four years?
The account closes, and you keep the money you saved plus the bonuses. You can then choose another type of savings account.
Criticism and Concerns
While the scheme is widely praised, some critics argue that the amounts people can save are too small to make a long-term difference. Others say that awareness of the scheme is still low, and many eligible people are not yet taking part.
The government hopes the extra £220 million funding will address these issues by improving outreach and making the scheme more accessible.
Financial Education and Support
The DWP is also working with charities and financial education providers to promote better money management skills. Help to Save is just one part of a broader effort to encourage low-income families to build long-term savings habits and reduce reliance on high-interest credit.
Why More People Should Join Now
With the new funding, 2025 is the perfect time for eligible households to join the scheme. Saving even small amounts can provide security and peace of mind. The 50% government bonus makes Help to Save one of the most rewarding saving opportunities available in the UK.
Final Thoughts
The £220 million boost to the Help to Save scheme is a clear sign that the UK government is committed to supporting low-income families. For millions of households, this programme offers a unique chance to build a savings pot with generous government support.
By applying now and making regular contributions, eligible savers can take advantage of the 50% bonus and create a financial buffer for the future. With applications open through HMRC, there has never been a better time to start saving.