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  • FIRST POST
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 9:07 AM
    • 110Posts
    • 29Thanks
    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 2
    • Dandytf
    • By Dandytf 15th Apr 18, 9:44 AM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    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
    Originally posted by stoozie1
    Can you help advise how to withdraw if I require as I only see close account.
    Is it possible to make partial withdrawals
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • AirlieBird
    • By AirlieBird 15th Apr 18, 10:26 AM
    • 1,039 Posts
    • 849 Thanks
    AirlieBird
    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
    Originally posted by stoozie1
    The Help to Save and Lifetime ISA bonuses are disregarded income for the purposes of calculating income for tax credits and universal benefit.
    • ProDave
    • By ProDave 15th Apr 18, 10:28 AM
    • 998 Posts
    • 1,131 Thanks
    ProDave
    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.
    Originally posted by Dandytf
    Have you set up your bank details? I think you need to do that before withdrawal options are available.

    Re the bonus affecting your tax credits? surely not. It's tax free for a start, so I would no more include the bonus in my "income" calculations for tax credits, than I would include the income from tax credits themselves.
    • Dandytf
    • By Dandytf 15th Apr 18, 11:42 AM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    I hope my recently increased wtc's aren't affected
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 15th Apr 18, 11:44 AM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Have you set up your bank details? I think you need to do that before withdrawal options are available.

    Re the bonus affecting your tax credits? surely not. It's tax free for a start, so I would no more include the bonus in my "income" calculations for tax credits, than I would include the income from tax credits themselves.
    Originally posted by ProDave
    Thanks for the setting up bank details which I did read though I was going to use mobile nor online banking to setup 50 per month.
    I'll retry and post later today though I would have expected a withdraw link which could have then advised or asked to setup bank details.
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 15th Apr 18, 11:47 AM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Update -I did setup my bank details for debit card payment on acc opening-
    Your UK bank account details
    We'll pay any money you withdraw or bonuses you earn into this UK bank account.
    Ill setup up SO via mobile banking today 50 per month 28th each month
    Can 1st SO be from 28th April or as I made 1st debit card payment does that mean SO from 28th may
    Answered in help2save account page
    Next payment can be made from 1st May which means I can choose either 28th April or 28th May for next months payment.
    Think I'll call the helpline tomorrow for withdrawal terms and link-suspecting close account link may offer withdrawals though not sure-I don't plant to make any withdrawals at all though as it's new I would like to see where the link is anyway.
    Since called the helpline-I've does have some simple options though closed until tomorrow to speak to an advisor.
    Last edited by Dandytf; 15-04-2018 at 12:12 PM.
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • chiefnoodle
    • By chiefnoodle 15th Apr 18, 1:29 PM
    • 110 Posts
    • 29 Thanks
    chiefnoodle
    The government website clearly states these are for people getting tax credits.

    What makes you think they are open for everyone?
    Originally posted by Zanderman
    Sorry I see my wording was misleading. I certainly didn't mean there were no eligibility criteria. Obviously you have to be over 18, British citizen, in receipt of TCs. All I meant was that while officially only in a trial phase now, it seems that anyone can open them, i.e. not only if you got an invitation, but again obviously only if you're eligible. Sorry if I caused confusion!
    I haven't made a signature as I don't possess a sense of humour.
    • Dandytf
    • By Dandytf 15th Apr 18, 1:48 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    It does mention it started Jan2018 though will be rolled out in stages until Oct2018
    I hope my new account is eligible-I'm not convinced though it does appear to be open.
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • cheesetoast
    • By cheesetoast 15th Apr 18, 4:34 PM
    • 256 Posts
    • 165 Thanks
    cheesetoast
    I had an invitation to open one on 9th April, as a banner at the top of my "Manage Tax Credits" account on gov.uk. Opened one for me and Mrs Toast the same day
    • Dox
    • By Dox 15th Apr 18, 5:59 PM
    • 861 Posts
    • 650 Thanks
    Dox
    Sorry I see my wording was misleading. I certainly didn't mean there were no eligibility criteria. Obviously you have to be over 18, British citizen, in receipt of TCs.
    Originally posted by chiefnoodle
    You don't have to be a British citizen - they are open to 'UK residents'.
    • chiefnoodle
    • By chiefnoodle 15th Apr 18, 6:14 PM
    • 110 Posts
    • 29 Thanks
    chiefnoodle
    I had an invitation to open one on 9th April, as a banner at the top of my "Manage Tax Credits" account on gov.uk. Opened one for me and Mrs Toast the same day
    Originally posted by cheesetoast
    Well I think that can put the scam theory safely to rest
    I haven't made a signature as I don't possess a sense of humour.
    • Dandytf
    • By Dandytf 15th Apr 18, 7:16 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    I've since setup SO for 50 each month from 2nd May.
    This is my 1st serious saving attempt in a few years.
    With the choice of 2 or 4 years is achievable and could be very smart for any home improvements.
    Thanks mser's
    Just one phone call to establish when I'll see a withdrawal link (for future reference only)
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 16th Apr 18, 8:41 AM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Is H2s open yet as lines are from 08:30 -yet IVR message is offices are closed.
    I've yet to find the withdrawal link unless it's by telephone
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 16th Apr 18, 12:28 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Called H2s helpline
    It opens from 10:00 A.M.
    Not 08:30 as website states.
    Withdrawal link should be with bank details. Expecting a callback as I don!!!8217;t have the withdraw link
    Since received callback-the withdrawal link may appear from tomorrow as I made debit card payment from rbs Sunday which doesn't leave account until today.
    If not then a fault has been raised to check the website.
    Excellent though as the kind advisor did confirm my account is open which I can continue to run 2-4 years.
    To avoid any misunderstanding I'm not planning to make any withdrawals,I'll only consider from 2nd and or 4rth years.
    Happy saving mser's this is my 1st attempt for years,I do have debt to clear though I'm going to save whilst making payments to my debts even if it costs more over next few years.
    Last edited by Dandytf; 16-04-2018 at 5:26 PM.
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 16th Apr 18, 5:23 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Have you set up your bank details? I think you need to do that before withdrawal options are available.

    Re the bonus affecting your tax credits? surely not. It's tax free for a start, so I would no more include the bonus in my "income" calculations for tax credits, than I would include the income from tax credits themselves.
    Originally posted by ProDave
    Refer to my recent post page 2 today.
    Thanks 1st step towards saving
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • colsten
    • By colsten 16th Apr 18, 7:52 PM
    • 9,121 Posts
    • 7,953 Thanks
    colsten
    I want to open an account where is the open link please
    Originally posted by Dandytf
    It is on the gov.uk website, a link to which you quoted. You should make sure you read the entire information before you apply.
    • colsten
    • By colsten 16th Apr 18, 7:55 PM
    • 9,121 Posts
    • 7,953 Thanks
    colsten
    Sorry I see my wording was misleading. I certainly didn't mean there were no eligibility criteria. Obviously you have to be over 18, British citizen, in receipt of TCs. All I meant was that while officially only in a trial phase now, it seems that anyone can open them, i.e. not only if you got an invitation, but again obviously only if you're eligible. Sorry if I caused confusion!
    Originally posted by chiefnoodle
    No, not anyone can open a Help To Save account, as you yourself acknowledged in your previous sentence.
    • Dandytf
    • By Dandytf 16th Apr 18, 8:19 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Thankfuly withdraw money tab has since been added to H2s account balance -top tab
    Very satisfied within the terms of this account.
    Hope lots of people take advantage of this saving offer.
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Dandytf
    • By Dandytf 3rd May 18, 7:40 PM
    • 1,436 Posts
    • 426 Thanks
    Dandytf
    Not sure if I'll post every deposit.
    Wanted to mention my 1st rbs SO. Deposit is made 50.00
    That's H2s balance 100.00 -potential bonus 50
    Think I'll treat this like dmp and mortgage statements and maybe post an update every few months or yearly.
    What a start to saving,immense possibilities
    Thanks mser's!
    sc dmp 2012 13k Jan 2018 8840 paid. 60% approx.
    Mid 2018 Help2save 50 uk pounds per month
    Mid 2018-Virgin Money E-saver V11 -250+50 uk pounds per month
    • Spendingqueen
    • By Spendingqueen 5th May 18, 3:08 PM
    • 148 Posts
    • 40 Thanks
    Spendingqueen
    Can husband and wife both open an account?
    Husband works, wife doesn't
    We receive working tax credits as a couple as we have children.
    Are we both eligible or just the one who doesn't work? Or just the one who works?
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