Major tax changes to help millions of Brits get £1,200 free cash and extra credits – see how you’ll benefit
MILLIONS of Brits are set to get easier access to up to £1,200 in free cash and extra National Insurance credits, under government plans.
Twenty three tax changes have been mooted that would see the Help to Save scheme made simpler.
The scheme is open to people on certain benefits and offers you a government bonus of 50p for every £1 you add into a personal savings account, up to £25 per month.
Reforms would be made to how the bonus is calculated, the length of time an account can be open for and eligibility requirements.
Victoria Atkins, financial secretary to the Treasury, said: “We want to support savers and make sure the tax system provides them with the options they need to shore-up their finances, helping them through rainy days as well as helping them plan for the future.”
Meanwhile, certain parents would be able to claim back missing National Insurance credits to boost their state pension.
The change would be aimed at helping families that have not been able to work due to caring responsibilities or haven’t earned enough to pay National Insurance.
If this is you, you don’t have to do anything for now as the government is yet to detail how it will implement the change.
The government said how that would happen will be revealed soon but did not confirm exactly when.
Laura Suter, head of personal finance at AJ Bell, said the plans would be a “relief” for parents who have missed out on NI credits in the past.
She added: “Typically, it’s women who take career breaks, meaning that allowing parents to go back and fill in gaps on their record when they were out of work but caring for children will help to boost the collective wealth of women when they come to retire.
“We need to wait for the detail of the scheme to see how useful it will be.”
What is the Help to Save scheme?
The Help to Save scheme is a type of savings account available to those on Universal Credit, Working Tax Credits and Child Tax Credits.
You get 50p for every £1 saved into your account, and can add a maximum of £50 every month.
You can only save into your account for a maximum of four years.
If you added the maximum £50 amount you can every month for four years, you would get a £1,200 bonus from the government.
The scheme was supposed to be wrapped up in September this year, but will now open until April 2025.
Less than 400,000 people have opened a Help to Save account since the scheme was launched in September 2018, according to recent government figures.
But that means millions aren’t getting free cash when they are entitled to.
You can apply for one of the accounts on the government’s website.
But bear in mind you’ll need a Government Gateway user ID and password to apply.
If you don’t have a user ID, don’t worry, you can create one when you apply.
You’ll also be asked to provide your UK bank details.
Crucially, saving money into a Help to Save account can impact your eligibility for certain benefits and how much you receive.
You can check out the government website for more information on how your benefits can be affected.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk