Universal Credit recipients may be able to get £1,200 savings boost

The scheme is open to low-income earners, and some people who get Universal Credit could qualify.

Savers can deposit between £1 and £50 into their account each month over the course of four years and they will get a 50 per cent bonus from the government.

The bonus payments are not immediately paid – they are paid in the second and fourth years.

If the maximum amount which a person can deposit in the account - £2,400 – is paid in over the four years, then they could get a £1,200 bonus, provided money isn’t withdrawn during that time.

Crucially, money doesn’t have to be paid in every month, although this can affect the bonus earned.

Savers can pay in money as many times as they like, but the maximum which can be deposited in each calendar month is £50.

How is Help to Save bonus paid?

After the first two years, the saver will get the first bonus, if they’ve used the account to save.

This first payment, made into the savers’ bank account rather than Help to Save account, will be 50 per cent of the highest balance saved in that time.

After four years, those who have continued to save will get the final bonus.

This will be 50 per cent of the difference between the highest balance saved in the first two years and the highest balance saved in the final two years.

If the highest balance hasn’t increased from when the first bonus was paid, a final bonus won’t be earned.

Bonuses will be paid even if money is withdrawn, although withdrawing money makes it harder to grow the highest balance.

Who is eligible for Help to Save?

People who receive Working Tax Credit or Child Tax Credit, and entitled to Working Tax Credit, can open a Help to Save account, as well as some people getting Universal Credit.

To qualify via Universal Credit, the saver (with their partner if it’s a joint claim) must have had take-home pay of £793.17 or more in the last monthly assessment period.

The take-home pay is the pay after deductions, such as tax or National Insurance.

In the event a person stops claiming the aforementioned benefits, then they can still keep using the Help to Save account.

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Savers must be UK residents, although those living overseas could apply if they are a:

• Crown servant or their spouse or civil partner
• Member of the British armed forces or their spouse or civil partner

Applicants should note that saving money through a Help to Save account could affect benefit eligibility to Universal Credit or Housing Benefit and the amount they get.

If a person or their partner has £6,000 or less in personal savings, including in a Help to Save account, then they won’t be affected.

The bonuses won’t affect Universal Credit, Working Tax Credit or Housing Benefit payments.