MARTIN Lewis has reminded Brits on Universal Credit how to get extra cash.
Millions on the benefit can get a special saving account which the money saving expert has branded “unbeatable” right now.
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That’s because it offers a cash bonus of up to £1,200, and that’s better than any interest you’ll get on a normal savings account at the moment.
Help to Save accounts were launched by the government in 2018 to help those on low incomes save for a rainy day.
For each £1 you save into the account, the government will give you 50p on top.
So if you save the maximum amount each year and for the four years you can have the account, you could earn a bonus of £1,200.
To get the biggest bonus, you need to save £2,400 over that time which works out as £50 a month.
But you can save less and still get a bonus, although it will be a lower amount, and you can get the cash after two years of saving.
Millions of Brits on Universal Credit and other benefits are eligible for a Help to Save account, but just over 280,000 accounts have been opened so far.
That means millions are missing out and speaking on ITV’s The Martin Lewis Money Show, Martin reminded them how to get the free cash.
“If any of you are eligible for that you need to go for it,” he said.
“For those who are on a low income, for example you’re on Universal Credit, you can put up to £50 pounds a month, over two years. And it pays you a bonus 50% on the highest amount you have.
“So think of it like this, you put £50 if you have the money, in for a year, you’ve got £600.
“You have a problem and you need the cash, which many on low incomes might find, so you put nothing in for the rest of the two years.
“Now the highest amount you’ll have is £600, 50% of that is £300. That’s the bonus you’ll get, totally unbeatable.”
BIG WINNER
He added: “If any of you are eligible for that. You need to go for it. That’s a big winner”
Help to Save is useful for people who can afford to put money away each month or week, so the scheme isn’t for everyone.
But you can still open an account and save even a pound here and there.
Saving even a little can help you avoid having to borrow money in an emergency, for instance if your washing machine breaks, which can end up costing you more overall with interest repayments.
Help to Save offers a higher effective rate of interest than what you’d earn with a regular savings account or bank account.
Martin explained that while interest rates have improved since the start of the year, they can’t beat a Help to Save bonus.
The top one-year fixed rate right now is 1.35%,the money saving expert said, and 1.6% for a two-year fix.
These fixed-rates are better than easy-access savings accounts right now, but your cash is locked away and you won’t be able to withdraw it in an emergency
The best easy-access rate right now is just 0.6%.
Who is eligible for Help to Save?
You could be eligible for a Help to Save account if you:
- Receive Working Tax Credit
- Are entitled to Working Tax Credit and receive Child Tax Credit
- Claim Universal Credit and you (with your partner if it’s a joint claim) earned £604.56 or more from paid work in your last monthly assessment period
You and your partner can apply for separate Help to Save accounts, but you’ll both need to apply individually.
Savers also need to be living in the UK to be eligible for the scheme.
How much can you save through Help to Save?
You can save between £1 and £50 every calendar month and accounts last for four years from the date opened.
After two years, savers get a 50% tax-free bonus on the highest balance they’ve achieved.
If you continue saving, you get another 50% tax-free bonus after a further two years.
The most you can earn from your savings in four years is £1,200 in bonus money.
As Help to Save is an easy-access account, you can make withdrawals – but doing this may affect your bonus.
You should also note that if your Help to Save cash pushes you over £6,000 in personal savings, it could affect your eligibility for some benefits.
How to apply for Help to Save
You can apply for an account via Gov.uk but you need a government gateway user ID and password.
If you do not have a user ID, you can create one when you apply.
For those who don’t have access to the internet, you can still get an account – just call 0300 322 7093.
Be aware that you’ll be asked to provide your bank details when you apply as the bonus is paid into your bank account rather than into the savings account.
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