Fewer than 65,000 people have paid into a Help to Save account since its launch in 2016, according to official figures released today (February 28).
According to HMRC, about £13m has been deposited into these accounts, with the average savings standing at £44 per month, just below the £50 limit.
Launched by former prime minister David Cameron ahead of the 2016 Budget, the Help to Save initiative was aimed at those on low incomes to encourage them to save.
The initiative offers a 50 per cent bonus on the amount saved, up to a maximum bonus of £1,200 over four years.
At the time, the government anticipated the programme to benefit up to 3.5m people.
Today's figures showed a combined bonus of about £6.5m has so far been paid out to 64,350 people.
Tom Selby, senior analyst at AJ Bell, said: "Given the hype around the Help to Save initiative ahead of the 2016 Budget, it is hard to escape the conclusion the programme has been something of a damp squib.
"While it is clearly positive over 60,000 people have benefited from a 50 per cent top-up on money saved through the scheme, that is a small fraction of the 3.5m who could have claimed.
"Given the scheme is aimed directly at those on the lowest incomes, it is perhaps little surprise take-up has been so low. If you are on benefits and struggling to make ends meet, even a significant savings carrot will make little difference to your spending decisions."
The data also revealed that of the 90,000 accounts that have been opened, roughly one quarter of them are empty.
Meanwhile, 8,400 individuals have made withdrawals from their Help to Save accounts totalling £1.1m.
Jane Goodland, corporate affairs director at Quilter, said: "So much more can be done to give people the confidence and basic financial know-how.
"Government has said this scheme could help hundreds of thousands, but that is only going to happen if the scheme is combined with a sustained effort to improve financial awareness and education.
"Saving is not part of our DNA right now, and is under threat from a consumer culture that makes it easy to spend at a tap, or take a loan in minutes."
She added: "Evidence shows that many financial attitudes and behaviours are shaped around age seven.
"The Help to Save initiative and others like it will be more powerful if they are combined with financial education in primary schools, so that future generations understand the benefit of saving for the long-term.
"A lofty goal, but one we should be aiming for."
