What to do when your Help to Save account closes

After four years, your Help to Save account will be closed. When it closes you won’t be able to reopen it or open a new one.

The money in your account, along with the final bonus payment, will be paid into the nominated account you chose when you opened your Help to Save account. 

You can update your nominated account details at any time before your Help to Save account reaches maturity if you haven’t chosen an account or want your money to be paid to a different account.

But even when your Help to Save account has closed it doesn’t mean you need to stop saving or spend all the money.

If you’ve enjoyed getting into the savings habit, or you’ve realised it’s good to have some emergency savings for a rainy day then you don’t have to stop when your Help to Save account closes.

You can of course leave your money in the nominated bank account it was paid into when your Help to Save account closed. 

However, there are plenty of other places you can put your money where you could earn some interest or win prizes. Here are some of your options.

Also known as instant access savings accounts, these are accounts that pay interest and allow you to withdraw money whenever you need it. 

You can save as little or as much as you want each month. You can often open an account with an initial deposit of as little as £1.

With a regular savings account, you commit to paying in a certain amount each month. 

In return, you usually get a higher interest rate than you’d get with a current account or ordinary savings account.

Fixed-rate savings bonds (or accounts) are interest-paying savings accounts offered by banks, building societies and credit unions for a fixed amount of time. 

You usually get a higher interest rate than from instant access savings accounts.

However, your money is locked away which means you usually can’t access it easily in an emergency without paying a penalty charge or losing the interest you have earned.

Banks, building societies and credit unions offer instant access, regular savings and fixed rate cash ISAs, like the types of account listed above. 

You could put some of your savings into an account where you don’t have to pay tax on any interest earned. 

A cash ISA (for people aged over 18) or a Junior ISA (for children aged under 18) are the most well-known of this type of account. 

If you open a Junior ISA for your child, then the money is locked away until they reach the age of 18. Any money paid into the account belongs to the child which means you cannot access it. 

However, a Junior ISA is a good way to start teaching your children the value of saving. Find out more in our guide How to teach kids about money.

Some building societies and credit unions offer a prize-saver account as an alternative to earning interest. Every month, you have a chance to win a prize, which could be thousands of pounds depending on the organisation, but you do not earn any interest on your savings. 

However, there may be restrictions on how easily you can access your money without affecting your chance of entering the draw. 

Alternatively, you might want to consider Premium Bonds. These are an investment product issued by the Government-backed National Savings and Investment (NS&I). 

Unlike other investments, where you earn interest or a regular dividend income, you are entered into a monthly prize draw where you can win between £25 and £1 million tax free.

Of course, there are no guarantees that you will win a prize.

Many bank account providers are covered by the Financial Services Compensation Scheme (FSCS). 

This means your money is protected if there is a problem with the provider or if it goes bust. 

You might choose to spend the money from your Help to Save account. But there are some good reasons to choose to save instead.

It’s also a good idea to try and set aside some savings for emergencies. Find out how much emergency savings is enough in our guide.

If you have debt or other bills, then you’ll probably want to prioritise paying these off before putting money into a savings account.

If you’re claiming Universal Credit or Housing Benefit, the savings will not automatically affect your benefit payments. But if the money in your Help to Save account, combined with other savings, goes over £6,000, your payment might be affected.