Help to Save: How Universal Credit claimants can get a £1,200 bonus on savings

With household budgets still under pressure, finding extra money to put aside can feel tough.

But if you're claiming Universal Credit and doing any amount of paid work, there's a government scheme that can help you build a financial safety net by giving up to £1,200 in free bonus payments over four years.

Help to Save is a valuable initiative for anyone claiming the benefit, yet many eligible people are missing out on the free cash and haven't opened an account.

Here's how it works and how you can apply.

How Help to Save works

Anyone claiming Universal Credit and who earned just £1 or more in a month can apply.

You can save as little as £1 a month and up to £50 a month into a Help to Save account.

The government then pays a bonus based on how much you've saved, essentially you get an extra 50p for every £1 saved over four years.

If you put away the full £50 a month, you save £600 a year, £1,200 after two years, £1,800 after three years and, £2,400 after four years.

The bonuses are paid after the second and fourth year.

So after two years, you can receive a bonus of up to £600.

And after four years, you could then receive another bonus of up to £600.

If you save the full amount, after four years you'd have pulled together a lump sum of £3,600 including bonus

Does Help to Save affect Universal Credit?

If you have between £6,000 and £16,000 in savings, your Universal Credit payment will normally be reduced.

After £16,000 your payment will usually be stopped.

The money you save in a Help to Save account can count towards your savings limit for Universal Credit.

So if your total savings and other capital rise above £6,000, it could start to affect your Universal Credit.

However, the Help to Save bonus itself isn't counted as income for Universal Credit.

Can you withdraw money in a Help to Save account?

One of the biggest advantages of Help to Save is that your money isn't locked away.

So if you have a financial emergency you can use the cash to help you out.

You can withdraw savings whenever you need them and transfer them back to your bank account.

However, taking money out could reduce the size of future bonus payments because the bonuses are linked to your highest savings balance.

Apply for Help to Save

Applying is free and only takes a few minutes.

You can open an account through gov.uk.

Once opened, the account lasts for four years. After that it closes automatically, and you cannot open another Help to Save account.

If you stop claiming benefits you can still use your Help to Save account.

Is Help to Save worth it?

If you're claiming Universal Credit and working, Help to Save should be your first port of call for a savings account.

You get a guaranteed 50% return on your savings backed by the government - you won't find a better deal on the high street savings market.

Even if you can't pay the full £50 a month, saving small amounts can lead to a valuable bonus.

The opportunity to earn up to £1,200 in bonus cash doesn't come around very often and the scheme is closing in April 2027 so make sure you apply soon if you haven't already.