Just months for millions on Universal Credit to get £1.2k free cash with little-known account – you can start with £1
MILLIONS of Universal Credit customers have just months left to get up to £1,200 free cash thanks to a little-known account.
The Help to Save scheme is a government initiative designed to encourage those on benefits to save money.
The savings account gives people a bonus of 50p for every £1 they save over four years, up to a maximum bonus of £1,200.
Plus, since Help to Save is backed by the Government, all the savings in the scheme are secure.
The scheme was first launched in 2018 and last year it was extended to April 2025.
That means households have just seven months to sign up for one of the accounts.
Myron Jobson, Senior Personal Finance Analyst, at interactive investor (ii), told The Sun: “On paper, Help to Save is a great initiative to help instil a culture of savings among the nation’s most cash-strapped individuals. But for those who’ve felt the full force of the cost-of-living squeeze, the priority has been to stay above the breadline.
“If you are on a low income, the problem is that you have little, if anything, to spare to save at the end of the month. Many people make the mistake of trying to save when they are in debt, and yet the cost of debt for most usually vastly outweighs the gain of saving.
“For those who can afford it, a 50% savings bonus is too good a carrot to pass up.”
Savers can deposit between £1 and £50 a month into their account and will receive a government bonus – even if money has been withdrawn.
A 50p bonus is paid for every £1 saved, meaning that someone saving the maximum amount of £50 monthly can receive an extra £25 for free, which adds up to £300 in a year.
It means that someone saving £2,400 – the maximum amount they could deposit over four years – would receive a £1,200 bonus from the government.
While the scheme could still be extended past April, it’s worth bearing in mind that if you’re only just signing up though, you won’t get the headline amount.
Myron also pointed out that the bonuses are paid after the first two years and again at the end of the four years.
Myron said: “Remember, the bonuses are paid after the first two years and again at the end of the four-year period.
“As such, the first bonus of £175 would be paid two years from the account opening date, which would be in October two years later.”
So this means if you open an account before the end of the month you’ll get £175 in government bonuses – but this won’t be paid until October 2026 so do bear that in mind.
Although Myron did point out that those on a low income should consider whether saving is a priority if it would mean they would have “difficulty meeting outstanding debt commitments”, particularly priority debts such as council tax, as a result.
“In a perfect world, everyone would have at least three-to-six months’ worth of essential outgoings in savings,” he added.
So far the Treasury has not indicated whether or not Help to Save will be extended past April 2025 – The Sun has approached the department for this indication and will update this story when we hear back.
If the scheme does end next year, Myron says it is likely it will close to new applicants only, while existing account holders will still be able to reap the rewards until the government shuts it down entirely – similar to what happened to the Help to Buy ISA.
HMRC has confirmed that those who open a scheme before April next year will be able to continue to save into it for the full four years, so if you open an account now you’ll still get all the bonuses worth £1,200.
Sun Money has also asked the Treasury for more clarity on this too.
Figures released by the government in October 2023 revealed that almost 450,000 customers opened a Help to Save account between September 2018 and March 2023.
During that time, nearly £372.5million was paid into accounts.
How does Help to Save work?
Savers can deposit between £1 and £50 a month into their account and will receive a government bonus – even if money has been withdrawn.
A 50p bonus is paid for every £1 saved, meaning that someone saving the maximum amount of £50 monthly can receive an extra £25 for free, which adds up to £300 in a year.
It means that someone saving £2,400 – the maximum amount they could deposit over four years – would receive a £1,200 bonus from the government.
The bonus is paid directly into their bank account.
Keep in mind that don’t have to pay in each month if you don’t want to or can’t afford to.
You can put even just a couple of pounds in – it doesn’t have to be the maximum amount.
Account holders can also withdraw month whenever they like, but this means they might not be able to receive the full bonus before their account is closed.
You can save money in the account through a debit card, standing order or bank transfer.
The account will automatically close four years after you open it and you can’t apply for another one.
Anyone who closes the account before the four years are up, will miss the next bonus and won’t be able to reopen the account.
Who is eligible for a Help to Save account?
You can open a Help to Save account if:
- You are receiving Working Tax Credit
- You are entitled to Working Tax Credit and receiving Child Tax Credit
- You are claiming Universal Credit and you – with your partner if it’s a joint claim – earned £722.45 or more from paid work in your last monthly assessment period
If you get payments as a couple, you and your partner can apply for your own Help to Save accounts and will need to apply individually.
In most cases you will need to be living in the UK, except for a crown servant or their spouse or civil partner or member of the British armed forces or their spouse or civil partner.
You can keep your Help to Save account even if you stop claiming benefits during the four years it is open.
If you or your partner have £6,000 or less in personal savings, including in your Help to Save account, this will not affect how much Universal Credit you get.
How to apply for the scheme
You can apply online for an account through the government website.
You need a Government Gateway user ID and password to open an account, which you can create one as part of your application if you don’t already have one.
When applying, you will be asked for your UK bank details so make sure you have them to hand.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Help to Save can encourage positive saving habits – no matter what you can afford to save – and the 50% government bonus payment can help savers when they need it most.
“It is quick and easy to apply online or via the HMRC app, just search ‘help to save’ on GOV.UK to find out more.”
Free cash schemes if you're struggling
Many of us are still struggling with the high cost of living - but there's help you can get.
New or expectant parents can get up to £442 a year to spend on food through Healthy Start scheme.
Some new parents can get £500 via the Sure Start Maternity Grant. The money is designed to help you cover the costs of having a child.
Councils also offer support through the welfare assistance schemes, to help cover the costs of essentials, from buying new furniture to food vouchers.
The amount you can get varies but an investigation by The Sun found that hard-up Brits can apply for help worth up to £1,000.
Discretionary Housing Payment is a pot of money handed out by councils to those struggling to keep a roof over their heads.
A scheme is available for those who find themselves unable to cover housing costs, though the exact amount varies as each local authority dishes out the cash on a case-by-case basis.
Many energy forms offer grants to help cash-tight customers. The exact amount varies depending on your supplier and you circumstances, but could be as much a £2,000.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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