Universal Credit: Thomas Hunt MP calls for ‘permanent’ uplift
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This is via the Help to Save scheme, which is backed by the Government. Those who open a Help to Save account can get a bonus of 50 pence for every £1 saved over the course of four years.
Designed to help with savings for those on a low income, it’s something which certain people who are entitled to Working Tax Credit or who are receiving Universal Credit can get.
How does the Help to Save scheme work?
Between £1 and £50 can be put into the account each calendar month.
That’s not to say that money needs to be paid into the account every month though.
Universal Credit UK: Some may be able to get a boost to their bank account via Help to Save (Image: GETTY)
As many deposits as a person wants can be made into the account, provided this doesn’t exceed the £50 limit per calendar month.
Bonuses aren’t paid straight away, but instead at the end of the second and fourth years.
Not everyone will get the same amount though; they are based on how much has been saved.
Bonuses are paid tax-free, and they can be earned even if money is withdrawn from the account during the four-year period.
After the first two years, the first bonus will be paid, if the person has been using the account to save.
This will be 50 percent of the highest balance saved in the account.
Considering the limit per calendar month, £1,200 is the most which can be saved over two years, meaning a maximum tax-free bonus of £600.
Fast forward to after four years, and those who have continued to save will be able to earn a final bonus.
This time, the bonus will be 50 percent of the difference between two amounts:
- The highest balance saved in the first two years (years one and two)
- The highest balance saved in the final two years (years three and four).
If the highest balance doesn’t increase during this time, no final bonus will be earned.
Over four years, a total of £2,400 can have been paid in.
Crunch the numbers, and the most that can be earned from savings in this account then is £1,200 in bonus money over four years.
This cash is paid into the person’s bank account, rather than their Help to Save account.
Those who need to can withdraw their money during this four year period, but they should be aware it will be harder to grow the highest balance, and earn the largest possible bonuses.
Furthermore, savers should be aware that saving money through a Help to Save account could potentially affect eligibility for certain benefits, and how much they can get.
Universal Credit UK: The Help to Save bonus is paid tax-free after two and four years (Image: GETTY / EXPRESS)
Who is eligible for Help to Save?
The account can be opened by anyone who is:
- Receiving Working Tax Credit
- Entitled to Working Tax Credit and receiving Child Tax Credit
- Claiming Universal Credit and they (with their partner if it’s a joint claim) earned £617.73 or more from paid work in their last monthly assessment period.
Furthermore, savers must live in the UK.
There are some exceptions though, as people who live overseas can apply for the account if they’re either a Crown servant or their spouse or civil partner, or a member of the British armed forces or their spouse or civil partner.
It’s possible to apply for the account online via the Government website.