MILLIONS of people on Universal Credit could be missing out on a cash bonus worth over a thousand pounds.
A saving scheme specifically designed for those on low incomes and getting certain benefits offers a bonus.
The Help to Save account gives you the extra cash on top of your own savings.
For each £1 you set aside into one of these accounts, the government will give you a 50p bonus.
If you save the maximum amount each year, you could earn a bonus of up to £1,200 over the four years you can save, giving your rainy day fund a big boost.
To get the maximum bonus, you would need to save £2,400 over the same time period – that’s £50 per month.
More than a quarter of a million people have opened a Help to Save account since its launch in September 2018, according to the latest figures from the government.
Now 359,200 of these accounts are open – around 75,000 more than the start of last year.
That means millions of people who are eligible for the account and generous free cash bonus are still missing out.
Around 3.5million people were estimated to be eligible for an account when the Help to Save scheme first launched.
But Universal Credit claims have since increased, meaning even more people could now get the account.
Help to Save is useful for people who can afford to put some money away each month or week, so the scheme isn’t for everyone.
But you can still open one and save as little as a pound here and there to get started.
You don’t have to pay in every month and there’s no set amount.
Savers who do stash some cash are putting away on average each month £48 – just shy of the £50 limit.
The total amount in Help to Save accounts is £110 million as of March 2022.
At the start of 2020, around 163,000 people had signed up to Help to Save, compared to just 90,000 people in 2019. This time last year the figure stood at 284,050.
Having some cash put away if you’re able to means you’ll have something to fall back on in an emergency, for instance a washing machine or car breakdown.
It means you could avoid having to borrow the cash, which would cost you more if you have to pay interest.
Meanwhile the bonus on offer is far better than the interest you’ll earn on savings you’ll get from a bank right now.
Am I eligible for Help to Save?
Help to Save accounts are available to people who:
- Receive Working Tax Credit
- Are entitled to Working Tax Credit and receive Child Tax Credit
- Claim Universal Credit and you (with your partner if it’s a joint claim) earned £604.56 or more from paid work in your last monthly assessment period
You and your partner can apply for separate Help to Save accounts, but you’ll both need to apply individually.
Savers also need to be living in the UK to be eligible for the scheme.
If you stop claiming benefits you can carry on using your Help to Save account.
How much can I save with Help to Save?
You can save between £1 and £50 every calendar month and accounts last for four years from the date opened.
After two years, savers get a 50% tax-free bonus on the highest balance they’ve achieved.
If you continue saving, you get another 50% tax-free bonus after a further two years – so the fourth year after opening the account.
The most you can earn from your savings in four years is £1,200 in bonus money.
As Help to Save is an easy-access account, you can make withdrawals – but doing this may affect your bonus.
You should also note that if your Help to Save cash pushes you over £6,000 in personal savings, it could affect your eligibility for some benefits.
How do I open a Help to Save account?
You can apply for an account via Gov.uk but you need a government gateway user ID and password.
If you do not have a user ID, you can create one when you apply.
For those who don’t have access to the internet, you can still get an account – just call 0300 322 7093.
Be aware that you’ll be asked to provide your bank details when you apply as the bonus is paid into your bank account rather than into the savings account.
Meanwhile millions of people on Universal Credit will get the first half of a £650 cost of living payment this month.
An emergency fund for hard-up Brits on Universal Credit has been slashed by £40m – but you could still claim cash.