The government will on Wednesday launch its much-delayed help-to-save scheme designed to assist low-paid workers build up savings by giving them 50p for every £1 they save.

Championed by the former prime minister David Cameron, help to save was first announced in March 2016. But it largely mirrors Labour’s savings gateway scheme which was scrapped in 2010 by the then chancellor, George Osborne, as “not affordable”.

An estimated 3.5 million people on working tax credits or universal credits will be given a 50% bonus on every £1 saved over a four-year period. In comparison, high street banks offer a typical interest rate of 1-2%on savings bonds.

Savers under help to save can deposit between £1 and £50 every month, with the bonuses added at the halfway point and at the end of the four years. £2,400 is the maximum an individual can save, with a maximum £1,200 bonus. The government estimates that the scheme will cost the Treasury £255m by 2022-23.

The scheme was delayed while the government carried out an eight-month pilot scheme. It found that the 45,000 individuals saved at total of £3m during the trial period.

John Glen, economic secretary to the Treasury, said: “For some, putting away even a tenner each month can be a tough habit to get into. Whether you’re saving up to take the family on a much-needed holiday, or to take the next step in life, help to save is designed to make saving possible for every hardworking person in this country.”

The debt charity StepChange welcomed the launch of the scheme. Its chief executive, Phil Andrew, said: “We campaigned for help to save and it is a good scheme. Ninety-eight per cent of our clients have no savings at all at the point they turn to us, and only 1% have £1,000 or more. Yet we know that having £1,000 in rainy day savings virtually halves the risk of falling into problem debt, so helping lower income working households to build savings should be an important policy goal.”

But Labour, while welcoming incentives to save, has in the past strongly criticised the scheme while the government continued deep cuts to welfare, likening the approach to stealing someone’s car and then offering them a lift to the bus stop.

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Savers hoping to benefit from help to save will have to open an account online using their “government gateway” ID then pay in by debit card or standing order. The government said the system was easy to use and would help people on low incomes to build up a “rainy day fund”. Savers do not have to pay money in monthly, but £50 is the most they can deposit in any given month.

‘It’s much better than other savings accounts’

Facebook Twitter Pinterest Paul Hughes took part in the eight-month pilot of the help-to-save scheme.

Paul Hughes, 45, who works for a letting agency in Torquay, took part in the pilot project. He said: “I wasn’t saving before so it has helped me save and it was easy to use.

“It has enabled me to build up a savings pot and the bonus is very good value. It is much better than other savings accounts as the interest of other savings accounts is low in comparison.”