Help to Save ISA

Beautybyamandalove

Hi everyone

When i completed my tax return online last month, i was offered a help to save ISA where i set up a direct debit for £50 a month. But i have tried to research a bit more about it and cannot really find any information and seems like nobody's heard of it. Could this be a scam?!

eskbanker

There is a Help to Buy ISA scheme that's been in place since 2015, under which first time buyers can save up to £200 per month and receive a government bonus of 25% towards the cost of their property.

Sometimes this has been loosely (but inaccurately) referred to as a help to save ISA, and if I recall correctly there was actually a provider's (Nationwide?) product specifically called Help to Save.

However, exactly who offered you this and is there a (safe) link you can post? Which site did you use for your tax return?

Beautybyamandalove

I have found something on gov.uk government news

lifetime-isa-and-help-to-save-boost-for-savers-as-key-schemes-become-law

Who else has got one?

What do you think?

Beautybyamandalove

This is the information copied from
tax.service.gov.uk/help-to-save/

About Help to Save
Help to Save is a savings scheme backed by HM Treasury, so your savings are 100% secure.

You can only open a Help to Save account if you meet all the eligibility criteria. This includes being entitled to either of these benefits:

Working Tax Credit
Universal Credit
If you're eligible for an account, you could earn a 50% bonus on the money you've paid in.

If you pay in £2,400 over 4 years and don't make any withdrawals, you will earn the highest possible bonus of £1,200. All bonus money is tax-free.

What you need to know
We are currently developing the Help to Save online service. Tell us if you have any feedback or issues using the website - it will help us improve it.

You can:

earn bonuses rather than interest, so it's not like a typical bank account
maximise your bonus if you pay in money regularly and don't withdraw it
pay in up to £50 per month or miss months if you need to
You can't:

open more than one account in your lifetime
access your Help to Save account until you've entered your UK bank account details

2. Eligibility
You can apply for a Help to Save account if one of the following applies to you. You are:

entitled to Working Tax Credit and receiving payments for Working Tax Credit or Child Tax Credit
claiming Universal Credit and your household income - in your last monthly assessment period - was £542.88 or more
Payments from Universal Credit do not count as income.

If your situation changes
If you stop claiming Working Tax Credit or Universal Credit you can still keep your account. You can also pay in money and get any bonuses you're entitled to.

UK residency
To apply for an account, you must be a UK resident.

If you're living overseas, you can apply for an account if you're a:

Crown servant - or their spouse or civil partner
member of the British armed forces - or their spouse or civil partner
If you're living and working in the Republic of Ireland you're not eligible for an account.

You must tell us if you leave the UK for:

8 weeks or more if you were eligible for Working Tax Credit when you opened your account
4 weeks or more if you were claiming Universal Credit when you opened your account
You don't have to tell us you've left the UK, if you:

or your partner, or child, are getting medical treatment
are a mariner
are an oil worker based on the continental shelf
are out of the UK because your partner, child or close relative has died

3. How the account works
Pay in money
You can pay in money:

when you want to, or miss months if you choose to
up to £50 each calendar month
by standing order or debit card
You can't pay in more than £50 a month to make up for any months you've missed.

Earn a bonus
You can earn over 4 years:

2 tax-free bonuses worth up to £600 each
up to £1,200 in total bonuses
You can only get your bonus money paid into your UK bank account, not your Help to Save account.

Withdraw money
Any money you withdraw is paid into your UK bank account. You'll need to enter these details into your Help to Save account once it's created.

It takes 3 working days for withdrawals to reach your UK bank account.

If you withdraw money at any time you can still earn a bonus, but you won't be able to earn the maximum possible bonus of £1,200.

Close your account
You can:

close your account at any time, but it might affect your bonuses
only have an account for up to 4 years - after this it will mature and close
have your account mature early if you die or become terminally ill

4. How we calculate bonuses
You can earn 2 tax-free bonuses over the lifetime of your account. These bonuses are calculated differently.

First bonus
You'll get your first bonus after 2 years.

We'll look back over years 1 and 2 and find your highest balance. We'll pay you 50% of that amount as a first bonus. Even if you withdrew money.

First bonus example
If you pay in £50 a month for 2 years and don't make any withdrawals, you'll get a tax-free bonus of £600.

Example bonus calculations
£50 a month
£20 a month
£10 a month
Money in Money out Highest balance
Years 1 and 2 £1,200 £0 £1,200
First bonus = £600

50% of the highest balance reached in years 1 and 2
(50% of £1,200 = £600)
Your bonus will be paid into your UK bank account after 2 years
Years 3 and 4 £1,200 £0 £2,400
Final bonus = £600

50% of the difference between your highest balance in years 1 and 2 compared to your highest balance in years 3 and 4
(£2,400 - £1,200 = £1200,
50% of £1,200 = £600)
Your bonus will be paid into your UK bank account after 4 years
Final bonus
You'll get your final tax-free bonus after 4 years.

We use a different calculation to work out this bonus compared to your first bonus:

We'll find the highest balance your savings reached over years 1 and 2.
We'll then compare it to the highest balance your savings reached over years 3 and 4.
If your highest balance in years 3 and 4 is more than it was in years 1 and 2, you'll get a 50% tax-free bonus on the difference.
How withdrawals can affect your bonus
We use your highest balance to work out your bonus. You can withdraw money at any time and still get a bonus.

Withdrawing money will not reduce your bonus. It will make it harder for you to increase your highest balance and your bonus.

. Apply or sign in
To apply for a Help to Save account online, you'll need to make sure you're eligible for one.

If you:

already have a Government Gateway account you can use those details to sign in and apply for a Help to Save account
don't have a Government Gateway account, you can create one as part of the application process
We'll use the details from your Government Gateway account to check if you're eligible for a Help to Save account.

If you're eligible and then decide to create a Help to Save account, we'll set it up for you immediately.

You'll be able to access your Help to Save account, start saving and earning a bonus as soon as you enter your UK bank account details into your Help to Save account.

. Apply or sign in
To apply for a Help to Save account online, you'll need to make sure you're eligible for one.

If you:

already have a Government Gateway account you can use those details to sign in and apply for a Help to Save account
don't have a Government Gateway account, you can create one as part of the application process
We'll use the details from your Government Gateway account to check if you're eligible for a Help to Save account.

If you're eligible and then decide to create a Help to Save account, we'll set it up for you immediately.

You'll be able to access your Help to Save account, start saving and earning a bonus as soon as you enter your UK bank account details into your Help to Save account.

eskbanker

Ah yes, this isn't actually anything to do with ISAs but is a separate scheme, details of which you've now obviously found!

As I understand it, it hasn't yet been particularly widely available (hence the lack of information) but has been discussed periodically on the main savings board, such as:

https://forums.moneysavingexpert.com/discussion/5836498/help-to-save-payments
https://forums.moneysavingexpert.com/discussion/5835260/hep-to-save
https://forums.moneysavingexpert.com/discussion/5827195/help-to-save-who-is-eligible-and-how-do-you-open-one
https://forums.moneysavingexpert.com/discussion/5827120/help-to-save-now-open-when-its-worth-it-and-when-it-isnt