ITV PRESENTER Martin Lewis urged those on Universal Credit to look at the Help To Save scheme to get a 50% bonus after two years.
The Money Saving Expert founder tweeted about the "unbeatable" scheme that could help people on benefits get a bit of extra cash.
The Help To Save Scheme creates an account for low-paid workers who are on Universal Credit and it helps them to save money and get something more out of it too.
To apply for this scheme, you have to be a UK resident and meet one of the following criteria:
- Receive Universal Credit and have an employment income of £658.64 or more for the last monthly assessment period
- Receive working tax credit
- Entitled to working tax credit and receiving child tax credit
Every month, you can save from £1 up to £50, depending on the amount you want to put in and it also depends on whether you feel like saving or not during a specific month.
Read More on Universal Credit
Little-known scheme to get free cash for travel and childcare
Universal Credit explained: How to get one-off payment worth up to £812
After two years, you'll get a 50% bonus of the highest amount of savings you managed to reach.
So if in years one and two you managed to save £500, then you will get a £250 bonus at the end of your two.
If you needed to withdraw £100, for example, during these two years, you will still get £250.
This is because the 50% is of the highest amount you managed to save during those two years, not how much you have left at the end.
Most read in Money
Rishi Sunak reveals how £650 cost of living payments will hit bank accounts
I tried McDonald's new menu including a burger that tastes like lasagne
Thousands of households could be in line for cash, food vouchers and furniture
Thousands on Universal Credit WON’T get £650 payment due to loophole
After that, you decide whether you want to keep saving for a further two years or not.
If you keep saving, at the end of another two years, you'll get another bonus.
But this time, the calculation is made different.
The amount you saved in the first two years, £500, is taken into consideration.
If you managed to save up to £800, for example, at the end of the next two years, you will not get £400.
You will get 50% of the difference between the two amounts you managed to save.
So they will subtract £800 from £500, which is £300, and you will get a bonus of £150.
The account can easily be accessed, so if you need to withdraw money, you can just do so.
The bonuses will be paid directly into your main bank account, not the scheme account.
There are already people out there who tried and tested the scheme and thanked Martin on Twitter too.
One person said: "@MartinSLewis thank you very much for your information regarding the government's "help to save account." I claimed UC for my wife and me and took your advice to open account in June 2020, £50 each [per month] gives us a free £1,200 bonus next week plus our £2,400 savings, great advice."
Be aware that you cannot open a joint account, but only one for yourself.
If you and your partner share the money that you both get, then you will both have some extra cash to share together.
Martin Lewis does not recommend the scheme to those who have very high debts to pay. He suggests that first, you should clear those off and then look into the Help To Save account.
He said: "The great concern with Help to Save was that it would encourage people to save when they should instead be paying off debts, including some extremely expensive ones like payday loans.
"Yet they have managed to work a structure that enables people possibly to have the best of both worlds.
"The fact that you are given the bonus based on the highest amount you have saved, rather than the amount that you actually have in there, means you can build up your savings until you have an emergency that you would otherwise have borrowed for and then use your savings instead of borrowing, but you'll still be rewarded for the fact that you have saved in the first place.
"It's a very clever scheme and one that will work for many people. Of course though, if you have extremely expensive debts, rather than saving, it's best to try and clear those first."
To apply for a Help To Save account, head over to the government website or the HM Revenue & Customs (HMRC) app and enter your Government Gateway login details.
Read More on The Sun
Curse of BGT stars – from horrific murder to taking own mum to court
I’m a gardening guru – here is what you need to do to your garden for summer
If you find yourself struggling with technology, you can also call up 0300 322 7093 and the HMRC advisors will guide you and help set up your account.
The scheme runs until September 2023.
Source: Read Full Article