Universal Credit claimants could get up to £1,200 free from the government - how to qualify for the cash

More than £300 million has now been paid out through the Government's Help to Save scheme.

The savings accounts are for people on lower incomes and add a 50% bonus to money tucked away.

Over four years, someone paying in the maximum amount could save £2,400 and receive up to £1,200 free cash bonuses.

More than 656,000 Help to Save accounts have now been opened, with savers depositing £676.7 million between them, according to government.

But more people on low incomes and claiming Universal Credit could be benefiting.

Here's how it works and what you need to know...

What is Help to Save?

Help to Save is a Government savings scheme designed to encourage people on lower incomes to build up a savings pot.

You can save between £1 and £50 each calendar month.

For every £1 you save, the Government effectively adds 50p through the bonus system.

You can have the account for up to four years.

If you pay in the maximum £50 every month for four years, you could put pull together a savings pot of £2,400, plus a government bonus on the cash of £1,200.

How does the £1,200 Help to Save bonus work?

The bonus isn't simply 50% of everything you have paid in.

There are two bonus payments, one after two years and another after four years.

After two years, your first bonus is worth 50% of the highest balance you have saved during the first two years.

For example, if you save £50 a month and reach £1,200, your first bonus would be £600.

After four years, you can potentially receive another bonus based on the increase in your highest balance during years three and four.

For example, if you add the maximum of £1,200 you'll get another £600 bonus.

Who can get Help to Save?

The eligibility rules currently cover certain people receiving Universal Credit who had take home pay of £1 or more in their last assessment period.

IThe Government has also announced a further expansion from 2028.

From then, the earning criteria will be removed for people with caring responsibilities and the scheme will be opened to all Universal Credit claimants.

The Government estimates this could make around 1.5 million additional households eligible.

What happens if you can't save £50 every month?

You don't have to save the maximum amount.

You can put in anything from £1 to £50 each calendar month.

So if you can only afford £10 one month, you can save £10.

You can also choose not to pay anything in during a particular month.

Don't stretch your household budget simply to maximise the bonus and leave your budget short.

Can you withdraw money from Help to Save?

You can withdraw money from your Help to Save account when you need it.

However, withdrawals can make it harder to build up the highest balance used to calculate your bonuses.

This is particularly important because the first bonus is based on your highest balance during the first two years, while the final bonus depends on the increase in your highest balance during the second two years.

So, if you want to take the money, make sure you understand how a withdrawal could affect your future bonus first.

Does Help to Save affect Universal Credit?

Your Help to Save savings can count towards the savings rules for some benefits.

If you or your partner have £6,000 or less in personal savings, it won't affect how much Universal Credit you receive.

This includes savings held in your Help to Save account.

The Government also says your Help to Save bonuses will not affect your Universal Credit payments.

If your savings are approaching benefit capital thresholds, carefully check your best options.