Universal Credit: What is Help to Save? Who is eligible for the scheme?

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Help to Save is a Government scheme, which is intended to help people on low incomes or on certain benefits save money. As well as helping people to save, the Help to Save scheme also helps eligible people earn a bonus up to £1,200. Read on to find out more about how Help to Save works, and who is eligible for the scheme.

Who is eligible for Help to Save?

You may be eligible to open a Help to Save account if you are receiving Working Tax Credit, or are entitled to Working Tax Credit and are receiving Child Tax Credit.

You may also be eligible to open a Help to Save account if you are claiming Universal Credit, and your household earned £604.56 or more from paid work in the last Universal Credit monthly assessment period.

People receiving Universal Credit payments as a couple can apply separately for their own Help to Save accounts.

The Help to Save account can continue to be used if you stop claiming benefits in the future.

With few exceptions, you must be living in the UK to open a Help to Save account.

How does Help to Save work?

For people who are eligible, Help to Save is a type of savings account backed by the Government.

For every £1 that is saved in a Help to Save savings account, you get a bonus of 50p at the end of four years.

People with Help to Save accounts can pay between £1 and £50 per month, or skip a month if they don’t want to save that month.

The bonus for saving is then paid at the end of two years, and another bonus is paid again at the end of four years.

The account closes after four years, and you cannot apply for another Help to Save account after your account is closed.

The maximum bonus you can earn through Help to Save is £1,200 at the end of the four-year period.

MoneySavingExpert explains: “The bonus for the first two years is paid on the highest amount you’ve had in the account during the two years, not the amount that’s there at the end – though these could be the same.”

Universal Credit claimants may be able to get cold weather payments [ANALYSIS]
Universal Credit UK: New legal requirements provided on self-isolation [INSIGHT]
Housing Benefit UK: ‘No DSS’ ban ruled unlawful in Court [REPORT]

When claiming your second bonus after four years with a Help to Save account, the way the bonus is calculated is slightly different from the first bonus.

Your bonus after four years is calculated as 50 percent of the difference between the highest balance you saved in the first two years, and the highest balance saved in the last two years.

If your highest balance in the last two years does not increase, you do not earn a final bonus under the scheme.

The Government website explains: “You pay in £25 every calendar month for two years. You do not withdraw any money.

“Your highest balance will be £600. Your first bonus is £300, which is 50 percent of £600.

“In years 3 and 4 you save an extra £200 to grow your highest balance from £600 to £800.

“Your final bonus is £100, which is 50 percent of £200.

“Even though you withdrew some money after your balance was £800, this does not affect your bonus.”

Both bonuses from a Help to Save savings account are tax-free.

But it’s important to bear in mind a Help to Save account could impact on your eligibility for certain benefits.

However with regards to Universal Credit, your payments are not influenced by Help to Save bonuses.

If you or your partner has less than £6,000 in savings, Help to Save will not affect the amount of Universal Credit you receive, but this savings limit does include anything you save in a Help to Save account.

Source: Read Full Article