Help to Save accounts — amendment to the Universal Credit eligibility criteria
Published 12 March 2025
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This publication is available at https://www.gov.uk/government/publications/amendment-to-the-universal-credit-eligibility-criteria-for-help-to-save-accounts/help-to-save-accounts-amendment-to-the-universal-credit-eligibility-criteria
Who is likely to be affected
Those likely to be affected are:
- low-income working individuals in receipt of Universal Credit (UC)
- National Savings and Investments (NS&I) bank — the current scheme provider, which operates Help to Save accounts on behalf of the government
General description of the measure
This measure will extend the eligibility criteria for the Help to Save scheme to all working individuals in receipt of UC, who earned £1 or more in their previous assessment period.
It will remove the existing earnings threshold for UC claimants, currently set at the equivalent of 16 hours a week at the National Living Wage.
Policy objective
The Help to Save scheme aims to boost the financial resilience of low-income households by offering a 50% government bonus on savings of up to £50 a month over four years.
By extending the eligibility to include all Universal Credit claimants in work, not just those earning above a certain threshold, the scheme will be accessible to more households in need.
This measure aligns with the government’s aim to enhance financial inclusion of low-income households and provide targeted support to help them withstand financial shocks.
Background to the measure
Following the government’s announcement at Autumn Budget 2024, Help to Save has been extended on its current terms until April 2027. The government also announced that the scheme’s eligibility will be extended to all UC claimants in work, from 6 April 2025.
Alongside the Budget, a consultation was launched to gather feedback from financial institutions on the potential for commercial provision of a reformed Help to Save scheme. The aim is to ensure the scheme is well-utilised, straightforward, and remains an effective savings product beyond the extension period.
Detailed proposal
Operative date
This measure will have effect from 6 April 2025.
Current law
Account rules for Help to Save are set out in The Help-to-Save Accounts Regulations (2018) which are made under powers in Paragraphs 4, 5 and 6 of Schedule 2 to the Savings (Government Contributions) Act 2017.
The Help-to-Save Accounts Regulations (2018) set out the eligibility criteria for UC claimants to open a Help to Save account. They specify that UC claimants can open an account if, in the assessment period immediately before their application, they have earned income equivalent to, or greater than, 16 hours per week at the National Living Wage rate.
Proposed revisions
The Help-to-Save Accounts Regulations (2018) will be amended to expand the eligibility to all working UC claimants who earned £1 or more in the assessment period immediately before their application. This amendment will remove the requirement for UC claimants to meet the existing earnings threshold, which is currently the equivalent of 16 hours per week at the National Living Wage rate.
Summary of impacts
Exchequer impacts (£ million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| Nil | Nil | Nil | -20 | -20 | -20 |
These figures for this measure and for the extension to 2027 are set out jointly in Table 5.1 of Autumn Budget 2024 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Budget 2024.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure is expected to have a positive impact on individuals in receipt of UC who previously did not earn enough to qualify for the Help to Save scheme, by allowing them to open an account and receive a bonus. We estimate that around 550,000 more individuals will be eligible to open a Help to Save account as a result of this change.
Customer experience is expected to remain broadly the same as the account provider and scheme design remains unchanged.
Evidence shows that financial strain is a significant factor in family deterioration and breakdown. By seeking to mitigate financial strain for low income families, this measure is therefore expected to have a positive impact on family formation, stability and breakdown.
Equalities impacts
This measure will have a positive impact on those newly eligible to apply for a Help to Save account. Individuals from all protected groups are likely represented in the customer groups impacted by this measure.
Where a protected group is overrepresented compared to the UK adult population in general, they will benefit more from this measure. Protected characteristic breakdowns for individuals who will be newly eligible to apply for a Help to Save account as a result of this measure are as follows:
- women make up 66% of the population eligible for a Help-to-Save account — so are more likely to benefit from this measure than men
- younger adults are more likely to benefit from this measure — individuals aged 16 to 34 are overrepresented amongst those eligible for opening an account (57%) compared to UK adults in general (26%)
- those with a disability are more likely to benefit from this measure — making up 38% of those newly eligible to apply for a Help to Save account compared to around 25% of UK adults in general
- people from an ethnic minority background are slightly overrepresented in those impacted by this measure — people from a Black, African, Caribbean or Black British ethnic background are more than twice as likely to become newly eligible to apply for a Help to Save account (8%) compared to UK adults in general (3%)
Impact on business including civil society organisations
This measure will have a negligible impact on NS&I, the current Help to Save account provider.
One-off costs include familiarisation with the changes to the scheme’s eligibility criteria and training staff accordingly.
Ongoing costs include:
- recording additional information
- performing more calculations
- providing HMRC with increased data due to a rise in account numbers
There are no impacts on other businesses, including civil society organisations, as the measure otherwise only affects individuals.
This measure is expected overall to have no impact on businesses’ experience of dealing with HMRC as the change of eligibility does not change:
- the type of data that businesses need to report to HMRC
- the way that businesses are required to interact with HMRC
Operational impact (£ million) (HMRC or other)
HMRC expects the operational impacts of implementing this change to be negligible.
The existing Help to Save Technical Manual and Guidance on Gov.uk and the Help to Save mobile app will be updated to reflect the change.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communications with affected user groups and the Help to Save account provider.
Further advice
If you have any questions about this change, contact enquiries.savings@hmrc.gov.uk.
Declaration
Emma Reynolds MP, Economic Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.