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  • FIRST POST
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 9:07 AM
    • 109Posts
    • 28Thanks
    chiefnoodle
    Help to Save NOW OPEN: when it's worth it, and when it isn't!
    • #1
    • 13th Apr 18, 9:07 AM
    Help to Save NOW OPEN: when it's worth it, and when it isn't! 13th Apr 18 at 9:07 AM
    There is some confusion about for whom it is worth saving in the new "Help to Save" a/cs. I'm surprised I can't find any pages which have actually crunched the numbers. So I'm going to pitch in. For anyone who doesn't know the rules, they're here, [edit: you can go there to apply and open one now, I've opened for my wife and myself already].

    In the first two years its a no-brainer. Unless you are on one of those 49.9% credit cards, if you're eligible jump at it, feed in the max of £50/month.

    CALCULATION: over the 2 years you'll build up a total of £50 * 24 months = £1,200. The bonus you get is £600, so you end up with £1,800.
    A standard savings account which would match this would have to pay 44.5% interest. I won't start the calculations here, just go to a "Regular Savings Calculator" like no. 1 or no. 2, input the following
    Monthly payment:£50
    Duration (years): 2
    Interest rate (annually): 44.5%
    ==> RESULT: Your investment will be worth:£1,800.77
    So again, unless you have a savings account which pays more than 44% (after tax), or you've debt which costs more than 44%, Help to Save is for you FOR THE FIRST TWO YEARS.


    For the second 2-year period its not so simple. They make it look as though its as good, but its not at all, its almost 3 times less! Tricksy hobbitses. This is because apart from the monthly amount, you also have to have the first £1,200 sitting there. (The first £600 bonus is paid out to your bank account so you can do whatever you want with it, so isn't relevant to the following).

    CALCULATION: over the second 2 years you'll build up an additional £50 * 24 months = £1,200, plus the original £1,200 from the first 2 years, to a total of £2,400. The bonus you get is again £600, so you end up with £3,000.
    A standard savings account which would match this would have to pay 15.5% interest. For this you have to use calculator no. 2 which allows you to input an initial amount, and input the following
    Initial amount: £1200
    Monthly payment:£50
    Duration (years): 2
    Interest rate (annually): 15.5%
    ==> RESULT: Your investment will be worth: £3,000.00
    So for the second 2-year period its very questionable whether its worth it or not. Its certainly better than savings, but not better than a lot of credit cards, as even within the normal range you can easily find rates higher than 15.5%.


    CONCLUSION: (almost) certainly go for it in the first two years, in the second two years think about it!


    NAME AND SHAME: these two trusted websites which haven't bothered to work it out properly and are therefore AFAIK giving inaccurate advice:

    1) this Which article says right at the bottom "Help to Save is meant to encourage working people on low incomes to build up their savings. But, if you have expensive debts to clear, make this the priority" - in the first two years this will hardly ever be the case, the article should explain this

    2) A certain Mr M. Lewis quoted in this MSE article as saying "there is a risk 'Help to Save' could substantially mis-prioritize people's finances. ... the cost of debt for most usually vastly outweighs the gain of saving", and that you should pay back a 30% credit card before using Help to Save. As explained this is WRONG in the first two years, although he is correct about the second 2 years. Again, disappointing that they haven't crunched the numbers, I mean that is their job isn't it


    QUESTION: does anyone know why the thisismoney calculator gives different results to the 2 calculators I've used? According to them, the figure in the first calculation should be 40.26% instead of 44.5%, quite a difference!


    EXTRA TIP: You can choose the monthly payment date from the whole month and it doesn't make a difference. I.e. if you open the account on 1st May, it doesn't matter whether you pay in money on the 1st or the 15th or the 30th. So I suggest you make your standing order as late as possible in the month so that you can earn interest on it until then in your normal savings account. (Just don't make it too late or a bank holiday could push the payment until the next month, e.g. if the 30th is a Saturday, and this will presumably mean you've missed the month's payment chance. And don't forget about Xmas ).


    PS: If you can't afford the full £50 a month, the same %ages are true no matter what your monthly payment is.
    Last edited by chiefnoodle; 13-04-2018 at 2:28 PM. Reason: clarify can now be opened
Page 1
    • ProDave
    • By ProDave 13th Apr 18, 9:46 AM
    • 784 Posts
    • 852 Thanks
    ProDave
    • #2
    • 13th Apr 18, 9:46 AM
    • #2
    • 13th Apr 18, 9:46 AM
    Thank you. This is the first I have heard of "help to save"

    For others like me here is a link describing it https://www.gov.uk/government/publications/help-to-save-what-it-is-and-who-its-for/the-help-to-save-scheme

    A bit confusing for me "entitled to Working Tax Credit and receiving Working Tax Credit or Child Tax Credit payments"

    I earn too much for working tax credit but do get child tax credit. Would I be able to have one of these accounts.

    No mention of where or how you apply?
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 9:54 AM
    • 109 Posts
    • 28 Thanks
    chiefnoodle
    • #3
    • 13th Apr 18, 9:54 AM
    • #3
    • 13th Apr 18, 9:54 AM
    I earn too much for working tax credit but do get child tax credit. Would I be able to have one of these accounts.
    Originally posted by ProDave
    There are several other threads discussing these points. Just google Help to Save. Please can we not take this thread off-topic, which is to discuss for whom Help to Save is worth it, not who is eligible etc
    I haven't made a signature as I don't possess a sense of humour.
    • jimjames
    • By jimjames 13th Apr 18, 1:02 PM
    • 12,545 Posts
    • 11,177 Thanks
    jimjames
    • #4
    • 13th Apr 18, 1:02 PM
    • #4
    • 13th Apr 18, 1:02 PM
    Thread title might be a bit misleading, as far as I'm aware it's not "NOW OPEN", the accounts aren't likely to be available until the autumn
    Remember the saying: if it looks too good to be true it almost certainly is.
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 2:22 PM
    • 109 Posts
    • 28 Thanks
    chiefnoodle
    • #5
    • 13th Apr 18, 2:22 PM
    • #5
    • 13th Apr 18, 2:22 PM
    Thread title might be a bit misleading, as far as I'm aware it's not "NOW OPEN", the accounts aren't likely to be available until the autumn
    Originally posted by jimjames
    AFAIK they are open for everyone now. I opened accounts for my wife and I yesterday successfully online. Which is why I crunched the numbers.

    I know MSE hasn't reported this yet, or most places, but HUKD has, I find they're normally a bit quicker off the mark - see www.hotukdeals.com/deals/help-to-save-account-govuk-pay-in-up-to-50-per-month-up-to-50-bonus-on-the-money-youve-paid-in-2924757, there are a lot of people there who report successfully opening accounts.

    To apply just follow the link there, or go straight here www.tax.service.gov.uk/help-to-save/apply.
    I haven't made a signature as I don't possess a sense of humour.
    • Jenwales
    • By Jenwales 13th Apr 18, 2:45 PM
    • 25 Posts
    • 18 Thanks
    Jenwales
    • #6
    • 13th Apr 18, 2:45 PM
    accounts you can draw money from
    • #6
    • 13th Apr 18, 2:45 PM
    i have an isa but I want to change it to a normal account because I can't always afford to save. However most of them don't allow withdrawals and I may need to withdraw as I am moving house this year and will need the money
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 5:08 PM
    • 109 Posts
    • 28 Thanks
    chiefnoodle
    • #7
    • 13th Apr 18, 5:08 PM
    • #7
    • 13th Apr 18, 5:08 PM
    i have an isa but I want to change it to a normal account because I can't always afford to save. However most of them don't allow withdrawals and I may need to withdraw as I am moving house this year and will need the money
    Originally posted by Jenwales
    ??? unclear what you mean
    I haven't made a signature as I don't possess a sense of humour.
    • Neil Jones
    • By Neil Jones 13th Apr 18, 5:18 PM
    • 1,234 Posts
    • 713 Thanks
    Neil Jones
    • #8
    • 13th Apr 18, 5:18 PM
    • #8
    • 13th Apr 18, 5:18 PM
    i have an isa but I want to change it to a normal account because I can't always afford to save. However most of them don't allow withdrawals and I may need to withdraw as I am moving house this year and will need the money
    Originally posted by Jenwales
    All Cash ISAs you can withdraw from, its in the legislation. A fixed-rate Cash ISA must give you the option for early withdrawal, the penalty is typically anywhere up to a year's interest. Easy access ISAs work in the same way as any other account.

    You can get an easy-access savings account from anywhere, just sign up for one and transfer the money out (or ask your current provider if they can covert it) the ISA and into the new account.
    • stoozie1
    • By stoozie1 13th Apr 18, 6:40 PM
    • 535 Posts
    • 437 Thanks
    stoozie1
    • #9
    • 13th Apr 18, 6:40 PM
    • #9
    • 13th Apr 18, 6:40 PM
    Remember to factor in the 41p in the £1 reduction in the CTC/WTC we'll all get as a result of getting the bonus paid
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560
    • chiefnoodle
    • By chiefnoodle 14th Apr 18, 10:00 PM
    • 109 Posts
    • 28 Thanks
    chiefnoodle
    Remember to factor in the 41p in the £1 reduction in the CTC/WTC we'll all get as a result of getting the bonus paid
    Originally posted by stoozie1
    Do you mean after 2 years (and again after 4 years) when the £600 bonus is paid, that that payment will reduce Tax Credits (or Housing Benefit for those in receipt of that as well)?
    I haven't made a signature as I don't possess a sense of humour.
    • george4064
    • By george4064 14th Apr 18, 10:56 PM
    • 916 Posts
    • 1,005 Thanks
    george4064
    To apply just follow the link there, or go straight here www.tax.service.gov.uk/help-to-save/apply.
    Originally posted by chiefnoodle
    Iím being my cautious self here, but that link looks kind of suspicious/phishing to me....
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
    Save £12k in 2018 - #004 £2,784.34/£12,000 (23%)
    • chiefnoodle
    • By chiefnoodle 15th Apr 18, 12:22 AM
    • 109 Posts
    • 28 Thanks
    chiefnoodle
    Iím being my cautious self here, but that link looks kind of suspicious/phishing to me....
    Originally posted by george4064
    why? its a gov.uk address?

    if you go there and check the site certificate (in chrome, click on the left of the web address, where it says HM Revenue & Customs), you'll see its a good certificate issued to HMRC

    When you apply for it or sign in after making it you need to enter your Government Gateway credentials, which only the gov't knows (I hope) - try entering them wrong and see if you get caught out, if its a scammer it won't know its wrong

    So unless HMRC has changed from general meanness to outright scamming I'd've thought you're OK!

    You can always ring them up if you're still concerned... always good to be cautious but can't see any problem here
    I haven't made a signature as I don't possess a sense of humour.
    • Zanderman
    • By Zanderman 15th Apr 18, 8:25 AM
    • 1,473 Posts
    • 3,966 Thanks
    Zanderman
    AFAIK they are open for everyone now. I opened accounts for my wife and I yesterday successfully online. Which is why I crunched the numbers.
    Originally posted by chiefnoodle
    The government website clearly states these are for people getting tax credits.

    What makes you think they are open for everyone?

    I'm quite prepared to believe anyone can apply and open one (edit actually this is not the case - see my post below), but I assume those who are ineligible will have their accounts closed in due course, (or worse, pay in regularly but get no bonus at the end)

    Please give a link to evidence this is open for all, otherwise it clearly isn't.
    Last edited by Zanderman; 15-04-2018 at 8:47 AM. Reason: added reference to later post clarifying the situation
    • Zanderman
    • By Zanderman 15th Apr 18, 8:41 AM
    • 1,473 Posts
    • 3,966 Thanks
    Zanderman
    And, to follow up my post above, I've just logged into Government Gateway via the Help to Save application link and I instantly get....

    You're not eligible for a Help to Save account
    So, these are NOT open to everyone (and, btw, my income is definitely low!).

    They are only open to those getting tax credits.
    Last edited by Zanderman; 15-04-2018 at 8:48 AM. Reason: adding point about low income
    • Dandytf
    • By Dandytf 15th Apr 18, 9:05 AM
    • 1,143 Posts
    • 388 Thanks
    Dandytf
    AFAIK they are open for everyone now. I opened accounts for my wife and I yesterday successfully online. Which is why I crunched the numbers.

    I know MSE hasn't reported this yet, or most places, but HUKD has, I find they're normally a bit quicker off the mark - see www.hotukdeals.com/deals/help-to-save-account-govuk-pay-in-up-to-50-per-month-up-to-50-bonus-on-the-money-youve-paid-in-2924757, there are a lot of people there who report successfully opening accounts.

    To apply just follow the link there, or go straight here www.tax.service.gov.uk/help-to-save/apply.
    Originally posted by chiefnoodle
    I want to open an account where is the open link please
    I pass this part-entitled to Working Tax Credit and receiving Working Tax Credit or Child Tax Credit payments
    Excellent find OP
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • Zanderman
    • By Zanderman 15th Apr 18, 9:11 AM
    • 1,473 Posts
    • 3,966 Thanks
    Zanderman
    I want to open an account where is the open link please
    Originally posted by Dandytf
    Er, it's in the post you quoted....
    • AirlieBird
    • By AirlieBird 15th Apr 18, 9:12 AM
    • 917 Posts
    • 728 Thanks
    AirlieBird
    Help to Save is not open to everyone. It is currently in a trial phase.

    It will, from October, be available to those
    • in receipt of WTC or
    • WTC with a nil rate and CTC or
    • on universal credit with earnings of at least equivalent to 16 hours a week at the national living wage rate.

    The regulations exempt the government from having a duty to pay a bonus on Help to Save accounts opened before 16 October 2018 except where they are an eligible participant in the trial.
    • Dandytf
    • By Dandytf 15th Apr 18, 9:19 AM
    • 1,143 Posts
    • 388 Thanks
    Dandytf
    Thanks mser's
    Project save for a change is started since this help to save advice!
    Account open 1st debit card payment made -haven't found Dd or SO links yet though I could setup a regular payment via mobile banking.
    Very happy -Your payment has been accepted.
    We advise keeping your paye thanks details-cant remember exactly
    What a fine OP-this gives the UK a serious offer to save
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • Dandytf
    • By Dandytf 15th Apr 18, 9:35 AM
    • 1,143 Posts
    • 388 Thanks
    Dandytf
    I'm confused my account is open 50 paid in which I can view-+25 bonus added.
    Withdrawals are online-where is the withdraw option?
    E.g. You'll get 50% of your highest balance between 1 April 2018 and 31 March 2020 - for your first tax-free bonus. Even if you make withdrawals.

    Your first bonus will be paid into your UK bank account from 1 April 2020.
    Last edited by Dandytf; 15-04-2018 at 9:40 AM.
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • stoozie1
    • By stoozie1 15th Apr 18, 9:41 AM
    • 535 Posts
    • 437 Thanks
    stoozie1
    Do you mean after 2 years (and again after 4 years) when the £600 bonus is paid, that that payment will reduce Tax Credits (or Housing Benefit for those in receipt of that as well)?
    Originally posted by chiefnoodle
    I am saying that tax credits in the year of receipt of the bonus will reduce, as it will count as 'other income'. My withdrawal rate is 41%, YMMV
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560
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