Brits can now qualify for a savings account offering a potential £1,200 gratis
The Help to Save scheme, a government initiative aimed at encouraging people on certain benefits to save money, has undergone a significant change as of April 2023. The eligibility criteria for the scheme have been relaxed, making it accessible to a broader range of individuals receiving Universal Credit.
Previously, individuals needed to earn at least the equivalent of 16 hours a week at the national living wage, which was approximately £793 per month, to qualify for the Help to Save scheme. However, the new eligibility rules state that anyone receiving Universal Credit who has earned at least £1 in their last monthly assessment period can now participate. This change opens up the programme to many more potential savers, offering a financial opportunity for those on lower incomes.
The Help to Save scheme allows eligible individuals to save up to £50 per month for a maximum of four years. After two years, the government pays a bonus worth 50% of the highest balance achieved during that time. The bonus can be up to a maximum of £1,200.
It's important to note that no interest is earned on the savings in the Help to Save scheme. However, the bonus provides a great incentive for those who can afford to save. After the first two years, if the highest balance is £1,200 and the highest balance in the third and fourth years is £1,800, a bonus of £300 is received for the second bonus calculation. After four years, another bonus of 50% of the difference between the highest balance achieved during the first two years and the highest balance during the third and fourth years is given. This means that if the maximum £1,200 is saved over the first two years, a bonus of £600 can be received.
One of the notable features of the Help to Save scheme is that it is not a locked-in account. Savers can withdraw their savings at any point, although doing so may affect the bonus amount. After four years, the Help to Save account will be closed, and no further accounts can be opened.
The Help to Save scheme offers a valuable opportunity for those who are eligible to save money and receive a government bonus. With the relaxed eligibility rules, hundreds of thousands more potential savers can now benefit from this programme.
Acceptance of the Help to Save scheme has been extended to anyone receiving Universal Credit, regardless of their earnings, providing a personal-finance opportunity even in the context of a challenging financial situation. Notably, this scheme allows savings of up to £50 per month, with war-chests of £1,200 or more eligible for a bonus worth half the total savings after two years, potentially amounting to £600 in saving incentives.
