Alicia
Thousands of UK households on Universal Credit can now benefit from up to £1,200 in free cash through HMRC’s Help to Save scheme.
This government-backed program is designed to encourage low-income earners to save by offering a 50% tax-free bonus on the amount they deposit.
Under the scheme, for every £2 saved, the government adds £1—up to a maximum bonus of £25 per month.
Those who save the full amount over four years can unlock the maximum £1,200 bonus on top of their personal savings.
How the Scheme Works
| Feature | Details |
|---|---|
| Monthly Deposit Limit | £1 to £50 |
| Bonus Rate | 50% of the highest balance saved |
| Total Possible Savings | £2,400 personal savings over four years |
| Maximum Bonus | £1,200 |
| Bonus Payments | Paid at the end of Year 2 and Year 4 |
| Eligibility | Universal Credit recipients who meet the work and income requirements |
| Application Method | Online or via the HMRC app |
Eligibility and Expanded Access
Previously, the scheme was limited to Universal Credit claimants meeting specific work-hour and income thresholds or those receiving certain legacy benefits. However, the eligibility rules have now been expanded—making hundreds of thousands more people eligible.
You must be on Universal Credit and meet the income requirement during your most recent assessment period.
This change aims to help working families and individuals build a financial buffer, especially during times of rising living costs.
Bonus Payment Structure
The bonus is paid in two stages:
- First Bonus – At the end of the first two years, you’ll receive 50% of your highest saved amount during that period.
- Final Bonus – At the end of four years, you’ll receive 50% of the difference between your highest balance in the first two years and your highest balance in the last two years.
If your highest balance doesn’t increase in the second period, you won’t earn a final bonus. Both bonuses are paid directly into your bank account, not into the Help to Save account.
Flexible Savings
You don’t need to pay in every month, and you can deposit any amount between £1 and £50 at a time—up to the monthly limit.
This flexibility allows you to adjust your savings according to your financial situation, ensuring that even those with irregular incomes can participate.
Potential Impact
By saving the maximum amount of £50 each month for four years, a participant can build up £2,400 in personal savings and receive the full £1,200 bonus—bringing the total to £3,600. Even smaller regular contributions can add up significantly thanks to the generous 50% bonus rate.
The Help to Save scheme is a powerful tool for building long-term financial security for Universal Credit claimants. With the potential to earn £1,200 in free government money, it’s an opportunity that shouldn’t be overlooked.
The flexibility, generous bonus rate, and expanded eligibility make it one of the most rewarding savings schemes available today. Taking part could mean not just extra cash, but greater financial stability for the future.
FAQs
Who can open a Help to Save account?
Anyone on Universal Credit who meets the income requirement during their most recent assessment period can apply.
Do I need to save every month to get the bonus?
No. You can save as much or as little as you can afford each month, up to the £50 monthly limit.
Will the bonus affect my other benefits?
The bonus itself does not count as income for benefit purposes, but your overall savings may affect means-tested benefits if they exceed certain limits.