Help to save -reduced bonus

Dandytf

Is there any known way to calculate help ton save reduced bonus.
If for example I were to withdraw 90% of 800 pounds saved to date.
What's the new bonus for year 2 (April1st 2020) -currently 400pounds without withdrawals.
I've been saving 50 pounds per month-max bonus could have been 600pounds year 2.

eskbanker

Based on https://www.gov.uk/get-help-savings-low-income/what-youll-get, I'd say that your year 2 bonus would still be £400, as it's based on the 'high water mark' balance, i.e. its maximum during the first two years.

Obviously by withdrawing £720, this reduces the highest achievable balance over the four years by that amount, so your maximum year 4 bonus will be correspondingly less than it otherwise would have been, if one is paid out at all....

Dandytf

eskbanker wrote: »

Based on https://www.gov.uk/get-help-savings-low-income/what-youll-get, I'd say that your year 2 bonus would still be £400, as it's based on the 'high water mark' balance, i.e. its maximum during the first two years.

Obviously by withdrawing £720, this reduces the highest achievable balance over the four years by that amount, so your maximum year 4 bonus will be correspondingly less than it otherwise would have been, if one is paid out at all....

Thanks slightly confused not by your advice more off thinking that year 2 amount would be reduced considerably.
Though I certainly intend to continue with 50 pounds debits at least until year two possibly until year 4.

eskbanker

Dandytf wrote: »

Thanks slightly confused not by your advice more off thinking that year 2 amount would be reduced considerably.
Though I certainly intend to continue with 50 pounds debits at least until year two possibly until year 4.

Making withdrawals during the second year would obviously reduce the balance at the end of year 2, given the maximum monthly contribution being £50, but the year 2 bonus isn't based on the balance at the end of year 2 as such, it's based on the highest balance achieved during the two years.

If you don't make any withdrawals then these are the same thing, but if you do make substantial withdrawals at this stage, after building it up to £800, then your closing balance at the end of year 2 will be less than £800 but this doesn't change the fact that you did reach £800 at some point during the first two years and therefore the bonus would still paid out at 50% of that, i.e. £400.

ffacoffipawb

Dandytf wrote: »

Is there any known way to calculate help ton save reduced bonus.
If for example I were to withdraw 90% of 800 pounds saved to date.
What's the new bonus for year 2 (April1st 2020) -currently 400pounds without withdrawals.
I've been saving 50 pounds per month-max bonus could have been 600pounds year 2.

I'll have a go at this.

You are 16 months in and have £800 saved. There are eight months to go to add another £400.

You withdraw £720 so your highest balance is £800 as you can only have £480 at the end of the two years.

Hence the bonus at the end of two years is 50% x max (£800,£480) = £400.

Now if you continue adding £50 a month for another 24 months, the balance at the end will be £480 + £1,200 = £1,680.

Deduct the previous high of £800 in the first two years gives £880.

Hence the bonus at the end of year 4 is 50% of this, i.e. £440.

Total bonus received is £840.

If you had not withdrawn, the total bonus would have been £600 + £600 = £1,200.

By withdrawing £720 early you have lost £360 bonus (i.e. 50% of the amount withdrawn early) so that makes sense.

Big penalty of lost bonus by early withdrawals. I would withdraw from any other savings first, if I had any.

Dandytf

Thank it's excellent I'm not loosing 90% from year two or four.
Withdrawals I believe are 3-5 days to reach bank account.
With existing balance on credit card though plenty of available credit, is it wise to make purchases today and immediately use help to save funds in a few days.

Edited
Card balance wont be paid off in full though today's purchases amounts will be re paid in a few days

Dandytf

Kitchen floor recent savings have rapidly been depleted.
Urgently require 250 pounds by Aug end to replace floor.
Can't see this being achievable through additional hours at work next week.
Re considering smaller help2save withdrawal rather than the recently mentioned 800 -maybe 200 pounds.
Considerations tonight and when I return to office tomorrow as two extra shifts next week could help though not making up which amount is required.
I excepted H2s should've be 850 next few days, so 450 April 2020 bonus -based on existing 50 per month deposits.
Decisions...