Universal Credit Claimants Can Access £1,200 Bonus Through Help to Save

The Department for Work and Pensions (DWP) has announced an extension of the Help to Save scheme until April 2027, providing an opportunity for Universal Credit claimants to earn a bonus of up to £1,200. Currently, there are approximately 8 million people receiving Universal Credit, with about 3 million claimants now eligible to take part in this initiative aimed at improving financial resilience.

Since its launch in 2018, the Help to Save scheme has already distributed millions of pounds in bonuses to over 500,000 participants. The scheme allows individuals to save between £1 and £50 each month, with the government contributing an additional 50p for every £1 saved. This means that if participants deposit the maximum amount of £2,400 over four years, they can receive a total bonus of £1,200.

How the Help to Save Scheme Works

Participants in the Help to Save scheme can conveniently set up an account online through GOV.UK or the HMRC app. Opening an account is straightforward and does not require an initial deposit. Most users, approximately 93 percent, contribute the maximum of £50 monthly, which can be managed easily via various payment methods, including debit card, bank transfer, or standing order.

Bonuses are dispersed at the end of the second and fourth years of account activity. For instance, if a participant saves £50 each month for the first two years, accumulating £1,200, they will receive a bonus of £600. If they continue to save the same amount for an additional two years, they can earn another £600 bonus, totaling £1,200 in bonuses earned over the four-year period. Should they retain their funds for the entire duration, the total value upon account closure could be as high as £3,600.

Eligibility Criteria and Implications

To qualify for the Help to Save account, individuals must be recipients of Universal Credit and have a take-home pay of at least £1 during their last monthly assessment period. This applies both to individual claimants and couples, who can each set up separate accounts. It is important to note that while participants can continue to receive benefits while saving, closing an account prematurely may result in losing out on the next bonus.

For those who are currently unable to save, opening a Help to Save account remains beneficial, as there is no immediate requirement to deposit funds. The scheme is designed to encourage saving among low-income individuals, ultimately aiding them in building a more secure financial future.

For more details on the Help to Save scheme and to set up an account, individuals can visit the GOV.UK website.