Money-saving expert Martin Lewis has urged people on benefits to check out a special account that could get them a bonus of up to £1,200.
Mr Lewis mentioned the Help to Save account in a tweet posted to his 1.5million Twitter followers. This is a type of savings account available to low-income workers claiming Universal Credit or Working Tax Credit, reports the Mirror.
It’s government run and offers a 50p bonus for every £1 saved – this translates to a 50% return on your money. This account lasts for four years and you can pay a maximum of £50 per month.
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If you save a maximum of £50 per month during the four years you can have the account, you could end up with a bonus of £1,200.
You can save less and still get a bonus, although it’s a lower amount – for example, save £25 a month over two years and you’ll get £600 back.
In a tweet, Mr Lewis said: ‘Are you, or someone you know, on Universal Credits or other benefits? See Help to register.
“You can put up to £50/month, then after 2 years get a 50% bonus on the maximum you had (even if you took it all out). Unbeatable!”
How to Open a Savings Help Account
You can apply for a Savings Assistance account via the Gov.uk website.
For those without internet access, you can still get an account by calling 0300 322 7093.
You may be eligible for a Savings Help Account if you live in the UK and:
Get a working tax credit
Are eligible for the working tax credit and receive a child tax credit
Claim Universal Credit and you (together with your partner if this is a joint claim) earned £604.56 or more from paid work during your last monthly assessment period
You and your partner can both open separate Help to Save accounts, but you will both need to apply for them individually. But depending on how much money you’ve already saved elsewhere, any money set aside in a Savings Aid account could potentially affect your benefits.
You and your partner must have less than £6,000 in personal savings to ensure your Universal Credit and Housing Benefit payments are not reduced. This includes any savings in your Shopping Help account, but not your bonuses.
Any savings or bonuses you earn through Help to Save will not affect the amount of working tax credit you get. Bonus payments are made after two years and after four years, and the money you earn is not subject to tax.
How does Help to Save compare to other savings accounts?
Mr Lewis described the Help to Save account as “unbeatable” compared to other savings accounts. If you qualify for Savings Assistance, you get 50% interest back on your money, up to the limits mentioned above. Elsewhere, the highest paying easy access account at the moment is Virgin Money, paying 1.56% on deposits up to £25,000.
You will get a higher return on your money if you can afford to lock in your money for a while. The highest paying notice savings account at present is DF Capital, which pays 1.7% and has a withdrawal notice period of 120 days. The best one-year fixed account pays 2.4% and comes from Investec, while a five-year fixed account from PCF Bank offers an interest rate of 2.9%.
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