Universal Credit claimants may be able to get £1,200 paid into bank account – can you?

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With millions of people having been hit financially by the coronavirus pandemic, saving may well come in as low priority at this moment in time. That said, some may be interested in finding a way to boost their savings.

With the Bank of England Base Rate at a historic low, interest rates offered by banks and building societies have – in general – continued to slip in recent times.

However, that’s not to say that there aren’t ways in which savers can make their money work harder.

People wanting to boost their bank balance may look into a whole host of options.

Those on a low income, may consider whether the government-backed scheme Help to Save is right for them.

Help to Save is a type of savings account, and it allows certain people on a low income to get a bonus of 50 pence for every £1 they save.

This is something eligible people can do over the course of four years.

There are limits on this: savers can pay in between £1 and £50 each calendar month.

However, savers do not have to pay money into the account every month.

It’s something which can be done by debit card, standing order or bank transfer.

The saver can pay into the account as many times as they like, but the most they can pay in each calendar month is £50.

It’s possible to earn two tax-free bonuses over the four years, and any bonus that’s earned will still be paid even if the saver withdraws money.

After the first two years, the account holder will get the first bonus, provided they’ve been using the account to save.

This bonus will be 50 percent of the highest balance they have saved.

Those who continue to save will get a final bonus after four years.

This will be 50 percent of the difference between:

  • The highest balance saved in the first two years (years one and two)
  • The highest balance saved in the last two years (years three and four).

As the maximum contribution to the account each month is £50, up to £2,400 can be saved in the account over four years.

Therefore, the maximum a person can earn over the course of four years via this account is £1,200 in bonus money.

This is paid into the saver’s bank account, rather than their Help to Save account.

Who is eligible for Help to Save?

A person is able to open a Help to Save account if they’re either:

  • Receiving Working Tax Credit
  • Entitled to Working Tax Credit and receiving Child Tax Credit
  • Claiming Universal Credit and their household earned £604.56 or more from paid work in your last monthly assessment period.

Additionally, a person needs to be living in the UK.

Should they live overseas, they can apply for an account if they’re either a:

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

If the saver stops claiming benefits, they can keep using their Help to Save account.

It’s important to be aware that saving money through a Help to Save account could affect a person’s eligibility for certain benefits, as well as how much one gets.

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