Saving money can feel like a challenge, especially when you're juggling rising living costs and everyday expenses. But did you know there are government-backed schemes that can give your savings a significant boost?
Whether you're building an emergency fund, saving for your first home, or planning for later life, it's worth checking whether you could benefit from Help to Save or a Lifetime ISA (LISA). Both offer government bonuses on top of your own savings.
Here’s the lowdown on who these schemes are for and the benefits they bring:
Help to Save
Those receiving Universal Credit or Working Tax Credit are eligible to apply.
The scheme rewards regular saving by paying a 50% government bonus worth 50p for every £1 saved over four years.
You can save between £1 and £50 per month (on an ‘easy access’ basis, so it can be withdrawn if needed - perfect for an emergency fund!)
The government pays bonuses at the end of years two and four
You can open an account up until April 2027. Once it's opened, you can keep it for up to four years
Find out more: https://www.gov.uk/get-help-savings-low-income
Applications can be made online at https://www.tax.service.gov.uk/help-to-save/apply (you’ll need a Government Gateway account to log in), or you can use the HM Revenue & Customs (HMRC) app.
Alternatively you can call 0300 322 7093 and HMRC advisers can assist you to set up an account over the phone.
LISA (Lifetime ISA)
Designed to help you save for your first home or for later life.
You can open an account if you're aged 18 to 39
You can save up to £4000 per tax year until the age of 50, and you’ll receive a 25% government bonus on your contributions
You can hold cash or stocks and shares in your LISA, or have a combination of both.
You can withdraw money from your LISA to buy your first home, or if you are over 60 (or terminally ill with less than 12 months to live)
If you make a withdrawal for any other reason, you’ll pay a 25% withdrawal charge
The account has to have been open at least 12 months before you can withdraw money, and can only be used for properties worth less than £450k, which you are buying with a mortgage
If you decide to use the LISA to help you buy your first home, you can retain the account and keep saving in it for your retirement
For full details, take a look at the government’s LISA information page, Money Helper’s explainer, or Money Saving Expert’s take on the pros, cons and best buys for this product.