Single Parent FAQs: Saving when money is tight – Issue 47

Having a small amount of money put aside can help with unexpected costs like school clothes and items, transport or broken appliances. It reduces stress and can stop a small problem turning into a crisis.

Start small. Even £3 to £5 a week makes a big difference over time. You’re not expected to save a fixed amount every month, do what’s possible for your situation.

Reducing future costs also protects your budget. You may be able to save money by:

• Using uniform banks, baby banks or community pantries
• Getting help from Home Energy Scotland to reduce bills
• Applying for Discretionary Housing Payments or local hardship funds if needed

These can free up small amounts of money that make regular saving easier.

It’s important that any savings earn a bit of interest over time.

Good options include:

• Local credit unions: Safe, low-cost and friendly for saving up small, regular amounts.
• Regular saver bank accounts: Some pay higher interest and let you save from £1 a month.
• Junior ISAs: Useful for children’s future savings, but only to be put in place once you have an emergency fund of your own.

Keeping savings in a separate account also helps reduce the temptation to dip into them.

Focus on building a small emergency fund.
A reasonable first goal is £100 to £300 over time. This gives you a buffer for essentials without relying on borrowing.

Help to Save

Help to Save is one of the most generous savings schemes available and is often the best option for single parents who qualify.

Who can apply?

You can open an account if you:

• Get Universal Credit and had take-home pay of at least £722 in your last monthly assessment period, or
• Are receiving Working Tax Credit (including if you also get Child Tax Credit)

You only need to meet the criteria when you apply, you can keep the account for four years even if your circumstances change later.

What can you save?

• From £1 to £50 a month.
• You don’t need to save every month.

What bonus do you get?

The government adds 50p for every £1 you save.

Bonuses are paid twice:

1. At the end of year 2: based on your highest balance in the first two years.
2. At the end of year 4: based on your highest balance in years 3 and 4.

Example:

• If you save £20 a month for a year (£240), you’d get a £120 bonus.
• If over two years you manage £600 in total, your year-2 bonus would be £300.

This makes Help to Save far more rewarding than standard savings accounts.

How do you use the money?

You can withdraw savings whenever you need to, but this can affect your bonus. The scheme works best if you keep savings in until the bonus point, if you can manage it.

How long does the account last?

• The account stays open for 4 years.
• After that, it closes and you keep any money you’ve saved plus your bonuses.

Is your Help to Save balance counted by Universal Credit?

No. Savings in a Help to Save account do not affect your UC claim, even if your balance goes over £6,000. This protection stays in place for the full 4-year term.

While they’re not savings schemes, some Scottish payments help ease pressure on your budget, such as:

• Scottish Child Payment
• Best Start Grants
• Best Start Foods

Some parents put aside a small part of these payments when they can, but it won’t be possible for everyone.

What practical steps can help me find money to save?

Many parents manage to save by reviewing small, regular costs such as:

• Mobile contracts
• Unused subscriptions
• Streaming services
• Auto-renewing apps

Checking these once or twice a year can free up £10 to £30 a month.

Another helpful method is “pay yourself first” moving a small amount to savings as soon as your benefit or wage comes in.

Free, trusted advice is available from:

• OPFS debt advice service
• Money Talk Team (CAB Scotland): Budgeting and money advice
• Local credit unions: Safe places to save small amounts
• Home Energy Scotland: Help lowering energy bills
• Scottish Welfare Fund: Support in a financial crisis