Universal Credit UK: Can you get over £1,000 in bonus tax-free money? How to apply
With living costs to cover, saving money often simply won’t be an option. However, it may be that some people on a low income, including certain Universal Credit claimants, can get help with savings.
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The scheme is known as Help to Save, and this allows certain people who are entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50 pence for every £1 they save over the course of four years.
It’s possible to save between £1 and £50 into the account each calendar month.
However, if in some months making ends meet is harder than others, savers should be aware that they don’t need to pay money in every month.
There’s no limit as to how many times the account holder pays money in, although the maximum amount that can be paid in in each calendar month is £50.
The money itself can be paid into the Help to Save account in a variety of ways: debit card, standing order or bank transfer.
Under the Help to Save scheme, a person can earn two tax-free bonuses over the course of four years.
Any bonuses earned will still be paid even if money is withdrawn.
The first bonus is paid after the first two years, if the saver has been using their account to save.
This will be 50 percent of the highest balance they have saved.
After four years, the saver will get a final bonus – if they continued to save, that is.
This bonus will be 50 percent of the difference between two amounts, and these are:
- 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).
If the highest balance does not increase in this time, the saver will not earn a final bonus.
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With the most a person can pay into their account each calendar month being £50, this works out at a maximum of £2,400 over four years.
As such, the most a person can earn from the savings in four years is £1,200 in bonus money.
Some may wish to withdraw money during this time – but how will it affect the bonus?
Gov.uk states that if a person withdraws the money, it will be harder for them to:
- Grow the highest balance
- Earn the largest possible bonuses.
“Withdrawing money could mean you are not able to earn a final bonus – depending on how much you withdraw and when,” it adds.
Universal Credit UK: Help to Save eligibility
A person can open a Help to Save account if they’re:
- 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 their last monthly assessment period.
Additionally, people need to be living in the UK.
Those who live overseas may be able to 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.
It’s possible to apply for the Help to Save account online, on the government website.
The applicant will need a Government Gateway user ID and password in order to apply.
“You’ll be asked to provide your UK bank details when you apply,” Gov.uk states.
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