The Government’s flagship Help to Save savings scheme aimed at those in receipt of Universal Credit is off to a “slow start”, according to Royal London, the mutual insurer, so far reaching less than one in 40 of the low income savers it was designed to help.
Launched after a five-month delay in September 2018 with the aim of helping 3.5 million eligible people in receipt of Universal Credit to save a rainy day fund, just 80,810 had been opened by the end of 2018, according to a House of Commons answer to written questions, published today (see note below).
The scheme was first announced in March 2016 by David Cameron.
Help to Save offers 50p for every £1 saved, on savings up to a maximum of £50 a month, for four years. The maximum government bonus available to a saver is £1,200.
Becky O’Connor, personal finance specialist for Royal London, said:
“It’s not surprising that Help-to-Save is off to a slow start given the issues that claimants have had with Universal Credit itself. In theory it’s a good idea as people on low incomes would benefit a lot from a small savings fund, as it could help them avoid costly payday loans and other forms of high cost credit. However in practice, if you are on a low income, the problem is that you have very little, if anything, to set aside, in the first place.”
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About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.