Organisations are being encouraged to implement a financial wellbeing strategy which includes informing and helping employees understand the various financial issues that may relate to them, including the financial benefits on offer in the workplace.
Your employees could gain an addition 50% government contribution to their savings
If you have employees on Working Tax Credits or Universal Credit, the Government’s ‘Help to Save’ scheme gives taxpayers 50p for every £1 they save.
It’s not every day the government gives away cash, but it could be a real financial boost to employees who are doing their best to save!
So how does the scheme work?
First of all your employee will need a Government Gateway account. Through the Gateway they will provide their bank account details and an account will be set up.
- A maximum of £50 per calendar month can be saved.
- The account earns two tax free bonuses - the first after two years, the second after four years.
The first bonus payable will be 50% of the highest balance saved over the 2 years.
If £50 per month is saved every month, the highest balance will be £1200. The Government will pay a bonus of £600 directly into their bank account, giving them a new savings balance of £1,800.
If they continue to save £50 per month up to the four year anniversary, the Government will pay a further bonus based on the difference between the balance at four years and the balance at year two.
Savings for years three and four are a further £1,200 so a further bonus is paid of £600. Over the four year period the employee has saved £2,400 and the Government has added £1,200, making the total savings pot £3,600.
The figure of £50 per month is a maximum and employees can save less per month. They do not have to save every month.
Will the savings have an impact on their benefits?
If the employee, or their partner, have £6000 or less in personal savings, Universal Credits and Housing Benefit will not be affected.
‘Help to Save’ will not affect in any way Working Tax Credits.
As with many Government initiatives, ‘Help to Save’ has not been widely publicised so is something your staff are probably not aware of. As part of your financial wellbeing strategy you can help by alerting them, and helping them to understand and access this scheme.
To find out more https://www.gov.uk/get-help-savings-low-income