Help To Save - savings/money expert comment

Journalist: Emma Lunn, Freelance

ended 27. July 2022

I'm writing a feature for Goodto.com about Help to Save and need to include some brief, original expert comment from savings/money experts or financial advisers.

Things I need answering are:

Why is Help To Save now more important than ever before (i.e. cost of living crisis)?

Why is Help to Save a no-brainer for those eligible (i.e because the bonus means it beats any interest rate on the market)?

Should someone pay off debts before saving with Help to Save?

3 responses from the Newspage community

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For those who are eligible to open a Help to Save account, it's a logical choice for getting free money and building up financial options for the future. With bonuses of 50% up to a maximum of £1,200 over four years, there is no more efficient way to save. But the government-backed product will only be helpful for those who make a commitment to save in the first place. It doesn't have to be much. With a minimum of only £1 per month, there's no real affordability barrier, but failure to save is usually down to mindset or lack of organisation. It's best to set up an automatic standing order to transfer money as soon as it arrives in your bank account, right across to your savings account, before you have the chance to even think about it, or change your mind. This can help build a savings habit with minimal effort, which is so important nowadays. The cost of living crisis and the pandemic have highlighted how important it is to build up some financial secuity to help deal with unexpected financial shocks. Help to Save is arguably one type of savings plan that can work well alongside repayment of debt, due to the generous bonus rate. Sticking with it until the 2 and 4 year bonus anniversaries should outweight interest payments on most debts, and importantly, it creates a superb habit that can be nurtured over time.
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The Help to Save scheme is brilliant. So many times I hear "I cannot afford to save" but honestly, for the vast majority of people it is a mindset, not a truth. I encourage anyone who uses this phrase to get an old jar, put a sticker on the side and write "savings" on it and then drop a penny in the jar. You are now a saver and can no longer use that phrase. It was just a habit. Now you can make saving a habit instead. If you are able to take advantage of the Help to Save scheme you will advance pretty quickly and realise that saving is a great habit to have. The minimum is a £1 per month. Just over 3p a day and you get 50p added by the government. A no-brainer for a mindset shift which is the first step to long term change. I am all for it.
For those who are eligible it’s a no brainer. It’s a common misconception you can’t save if you have debts. You can. It’s about how you budget and where you allocate your money each month. As long as you are paying your debts off. If you have available money, I would always recommend distributing it in both debts and savings. But make sure you are looking at interest rates, 0% offers. That way the interest isn’t going to make things harder. But if you are eligible do it! Why wouldn’t you!