Universal Credit recipients can get £1,200 free cash with the Help to Save Savings Account | Personal finance | Finance

Help to Save is a type of savings account, intended for people entitled to Working Tax Credit or Universal Credit. Savers receive a bonus of 50 pence for every pound saved over a four-year period.

Account holders can contribute between £1 and £50 per calendar month, although there is no obligation to pay each month.

Deposits can be made by debit card, standing order or bank transfer.

People can pay as many times as they want, but money can only be withdrawn from the Savings Aid account to another bank account. Additionally, withdrawals could impact the overall bonus amount available.

Bonuses are paid at the end of the second and fourth years and are based on the amount saved.

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At the end of the four years, the account will be closed and a person can reopen it or open another Help with Savings account.

Users can close their account at any time, but if an account is closed early, the next bonus will not be paid.

A person who has closed an account is not allowed to open another one either.

An account holder can earn two tax-free bonuses over four years, and these will be paid out even if the individual has cashed out.

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This means that withdrawing money will make it more difficult to grow the highest balance and get the biggest bonus possible.

Withdrawing funds may also result in not receiving the final bonus, depending on the amount withdrawn and when.

By paying a maximum of £50 per month, a saver would accumulate £2,400 over the four years, earning a bonus of £1,200.

The bonus is paid into the person’s bank account and not into the Savings Assistance account.

A person can open a Savings Assistance account if they benefit from the Labor Tax Credit, are entitled to the Labor Tax Credit and benefit from the Child Tax Credit.

Also eligible are those applying for Universal Credit who have earned £658.64 or more from paid work in the last monthly assessment period.

Couples can apply, but must do so separately.

Applicants must also be a UK resident, although there are some exceptions.

Members of the UK Armed Forces based overseas, or their spouse or civilian partner, can also create an account.

A saver can continue to use their Savings Assistance account if they stop claiming benefits.

Saving with a Savings Help account may affect a person’s eligibility for certain benefits and the amount they receive.

If a person or their partner has £6,000 or less in personal savings, their Universal Credit payments will remain the same, including any savings in the Help to Save account.

Savings Assistance Bonuses will not affect Universal Credit payments.

Savings and bonuses earned through Help to Save will not affect the amount of working tax credit an individual receives.

If a person or their partner has £6,000 or less in personal savings, this will not affect the amount of housing benefit they receive.

This includes any savings in their Savings Assistance account, and bonuses will not affect housing benefit payments.

To apply for the Help to Save program, a person needs a Government Gateway username and password.

UK bank details will need to be provided along with other details.

This can be put in place when an individual applies.