Big change to Universal Credit savings account for 550,000 – how you can get £300 free cash
HUNDREDS of thousands on Universal Credit can now access £300 free cash after a major savings account change.
The Government has loosened the eligibility criteria for its Help to Save account meaning those on lower incomes can apply.
You can apply for one of the accounts if you are on Universal Credit or tax credits.
You were previously only eligible if you were on Universal Credit and earned £846.56 or more in your last assessment period.
However, you can now apply if you earned £1 or more in your last assessment period.
The Government confirmed the change would come into effect this month in Budget documents published in October.
The savings account scheme will also now close on April 2027 after it was due to shut this April.
Opening up the qualifying criteria to all those on Universal Credit and working makes 550,000 more people eligible.
A total of 3million can now open one of the accounts that pays out up to £1,200 free cash over four years, or £300 a year.
However, since the savings account was launched in 2018, just 516,800 have opened one, according to recent Government data.
It means millions who could be accessing free cash through the savings scheme are missing out.
Michelle Highman, chief executive of The Money Charity, said: “We are really pleased to see the Help to Save scheme extended and made available to more people.
“It’s a brilliant way for people to start to save and to build their financial resilience and futures.
“Saving even just a little each month will help, and the added 50% bonus payment from the Government means that if you are eligible, then it’s a great place to boost your savings.”
What is Help to Save and how to apply?
Help to Save is a savings scheme for people on low incomes who receive either Universal Credit or tax credits.
The Government gives you a tax-free 50% bonus on whatever you save.
You can save between £1 and £50 into a Help to Save account each month and keep one open for up to four years.
The Government says around 93% of those with a Help to Save account add the maximum £50 every month.
If you add the maximum £50 in each month for four years, you receive £1,200 free cash from the Government.
Bonuses are paid at the end of the second and fourth year of you holding the account.
You can apply for a Help to Save account via www.gov.uk/get-help-savings-low-income/how-to-apply.
You can also apply via the HMRC app which is free to download via the Apple App Store or Google Play.
You’ll need your National Insurance (NI) number or postcode to hand, as well as two of the following:
- a valid UK passport
- a UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland)
- details of a tax credit claim, if you made one
- details from a Self Assessment tax return in the last 2 years, if you made one
- information held on your credit record, if you have one (such as loans, credit cards or mortgages)
You’ll also be asked to provide your UK bank details when you apply.
If you don’t already claim Universal Credit or tax credits, it’s worth seeing if you’re eligible.
The most recent figures from Policy in Practice estimate around £8.3billion of Universal Credit goes unclaimed by more than 1.4million people each year, with the average claim worth £5,772 a year.
Positives and negatives of Help to Save
One major perk to Help to Save is that you can start adding into it from just £1 a month.
Another is that you can dip into your savings at any point in case of an emergency.
One major drawback is that you can only receive the bonus at the end of the second and fourth years.
Another is that withdrawals can take up to three working days to process meaning you’re left waiting for emergency cash.
There are three free calculators you can use to see what you might be entitled to:
Not only is Universal Credit worth potentially thousands of pounds a year, you can get extra payments on top of your standard amount.
For example, you can get childcare costs covered or top ups for housing costs.
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