'Help to Save' Government Saving's scheme - Pros and Cons

deersmith4

Hello

I was just renewing my Tax Credits and was guided to a page about saving in government ‘Help to Save’ account. If I open and put money in, without any withdrawals, then they will give me a bonus of up to £600 for the first two years and £1,200 for four years.

Sounds good. However, if I do become even more frugal and save money, will the government use my savings to deduct / reduce future Tax Credits?

There is no information on this on their website.

Can you find out anything more?

Best wishes

Neil_Jones

Working Tax Credits is purely on income, savings have nothing to do with it.

For other benefits that are means-tested such as income based Jobseekers then yes it will apply and be used as part of your savings capital which IIRC for JSA, knocks £1 off your payment of JSA for every £250 above £6k you have until £16k when you get nothing at all.

TheShape

deersmith4 wrote: »

Sounds good. However, if I do become even more frugal and save money, will the government use my savings to deduct / reduce future Tax Credits?

They won't reduce your tax credits (working or child). Be aware though that if you move onto Universal Credit any Capital you have in excess of £6000 will reduce your Universal Credit payment. If you're part of a managed migration from tax credits to UC you'll get transitional protection for 12 months. If a change of circumstances stops your tax credit claim and you later claim UC the capital rules will apply from day 1.