HMRC Urges Universal Credit Claimants to Check Help to Save Eligibility
HM Revenue and Customs (HMRC) is actively encouraging thousands of individuals to verify their eligibility for a unique government-backed savings scheme known as Help to Save. This initiative offers a substantial bonus of up to 50% on savings, potentially providing hundreds of pounds in additional funds for eligible participants.
What Is the Help to Save Scheme?
Help to Save is a specialised savings account designed to support people with low incomes. Unlike traditional savings accounts that offer interest, this scheme provides a government bonus of 50% every two years. The account is exclusively available through National Savings and Investments, a government-backed entity.
To qualify, applicants must be claiming Universal Credit and also be employed, earning at least £1 per month. Currently, the scheme is limited to this group, but eligibility is set to expand from 2028, opening the opportunity to more savers.
How Does the Bonus System Operate?
The Help to Save account allows individuals to save a maximum of £50 each month over a four-year period. If savers maximise this cap without withdrawals, they can accumulate £2,400 in savings before the government bonus is applied.
The bonus is calculated as up to 50% of the highest balance achieved during each two-year segment, regardless of any withdrawals made. For instance, if the highest balance in the first two years is £500, a £250 bonus is paid at the two-year mark. Over the full four years, consistent saving could result in two bonus payments of £600 each, totalling £1,200 in government bonuses.
Key features of the scheme include:
- Savings and bonuses are tax-free.
- Funds can be accessed at any time via the HMRC app or online account, though withdrawals may take up to three working days.
- Withdrawals can impact the bonus amount, so careful planning is advised.
Important Considerations and Future Changes
After the four-year term, the Help to Save account closes automatically, with the savings and final bonus paid into the nominated bank account. Once closed, individuals cannot reopen or start a new Help to Save account.
Eligibility is determined solely at the time of application. If a claimant stops receiving Universal Credit during the account's term, the account remains active until the four-year period concludes. Additionally, international travel may affect the account, with exceptions for UK armed forces personnel, Crown Servants, and their partners, who can continue using the scheme while overseas.
HMRC has promoted the scheme on social media, highlighting its potential to boost savings significantly. As the eligibility criteria are poised to broaden in 2028, now is an opportune time for current Universal Credit claimants to explore this valuable financial support option.
