The Department for Work and Pensions (DWP) has introduced a scheme designed to help Universal Credit claimants save money and earn a bonus. Recent reports, including one from Birmingham Mail, highlight that approximately 8 million individuals are currently claiming Universal Credit. This government-backed initiative, known as the Help to Save scheme, aims to provide financial support to those on low incomes by rewarding them for saving.
The scheme offers a 50% bonus on savings, and more than half a million people have already benefited since its launch in 2018. Understanding how it works can help you make the most of this opportunity.
What is the Help to Save Scheme?
Launched in 2018 by the DWP, the Help to Save scheme was set up to assist people on low incomes, including those receiving Universal Credit, to build savings by offering a 50% bonus on what they save. If you’re eligible, you can open a Help to Save account, which allows you to save between £1 and £50 every month.
The scheme’s key feature is simple: the more you save, the more you earn. If you save the maximum £50 each month, you could save up to £2,400 over four years, earning a bonus of £1,200 at the end of the second and fourth years.
The beauty of this scheme is its flexibility: even if you can’t afford to save the full £50 each month, you can still benefit. The scheme rewards you for every deposit, whether it’s a small or larger sum. If you contribute the full amount, your balance grows with a 50% bonus, but even smaller contributions can help you get started on the path to saving.
Why Should You Consider Joining the Scheme?
There are many reasons why joining the Help to Save scheme can make a significant difference. For one, the financial rewards are clear. According to DWP data, 93% of users contribute the maximum £50 each month into their Help to Save account. This consistent saving helps build a substantial balance over time, and with the bonus structure, it’s an excellent way to save for future goals.
If you save the maximum amount, £2,400 over four years, you will receive a £1,200 bonus, which is paid at the end of the second and fourth years. This means you could end up with £3,600 after four years of regular deposits. Even if you can’t commit to saving every month, you can still open an account and contribute when possible, which means you’ll always be building towards your savings goal.
Additionally, the scheme has been extended until April 2027, giving Universal Credit claimants ample time to take advantage of this opportunity and receive the maximum bonus. So, if you haven’t already, it’s worth considering opening a Help to Save account while the offer is still available.
A Few Things to Keep in Mind
While the Help to Save scheme offers excellent benefits, there are some important things to consider before signing up. First, if you withdraw money from your Help to Save account, it could impact the bonus amount you receive. The bonus is calculated based on the highest balance in the account, so withdrawing funds may reduce the final bonus.
Also, it’s essential to note that even if you can’t commit to saving every month, opening an account is still worth it. There’s no obligation to deposit money each month, and you won’t lose anything by keeping your account open. You can start saving when it’s feasible, and the bonuses will still accumulate.
