Martin Lewis has said low-income workers on benefits could get a 50% return on their earnings with a special savings account.
The Money Saving Expert founder explained on Twitter how people claiming Universal Credit or Working Tax Credit could get a bonus of up to £1,200 on their savings with a Help to Save account.
What is a Help to Save bank account?
Help to Save is a type of savings account open to low-income workers claiming Universal Credit or Working Tax Credit.
Through the account the government offers a bonus of 50p for every £1 you save, meaning you get a 50% return on your money. This account lasts for four years with a maximum of £50 being paid in each month.
If you save the maximum amount each month for the four years you have the account, you could end up with a bonus of £1,200.
Even if you save less, you can still get a bonus. For example, if you save £25 a month over two years, you would still get £600 back.
In a tweet, Martin wrote: “Are you, or someone you know on Universal Credits or other benefits? Do look at Help To Save.
“You can put up to £50/mth in, then after 2yrs get a 50% bonus on the most you had in there (even if you’ve taken it all out). Unbeatable!”
How to open a Help to Save account
A Help to Save account can be opened through the Gov.uk website or by calling 0300 322 7093.You could be eligible for a Help to Save account if you live in the UK and:
- 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
To get double the money in one household, you and your partner each open a separate account, but you will both need to apply individually. However, your benefits could be potentially affected depending on how much money you already have saved elsewhere.
You and your partner must have less than £6,000 in personal savings to make sure your Universal Credit and
Housing Benefit payments are not reduced. This includes any savings in your Help to Buy account - not your bonuses.
Any savings or bonuses you earn via Help to Save will not affect how much Working Tax Credit you get.
The bonus payments are made after two years and at the end of four years, and the money you earn is not subject to tax.
How does Help to Save compare to other savings accounts?
Compared to other accounts, Martin said the Help to Save account is “unbeatable”.
If you are eligible for Help to Save, you get 50% interest back on your cash up to the limits mentioned above.
Elsewhere, the top-paying easy-access account right now is from Virgin Money, paying 1.56% on deposits up to £25,000.
The best-paying notice savings account at the moment is from DF Capital, paying 1.7% and with a withdrawal notice period of 120 days.
The top one-year fixed account pays 2.4% and is from Investec, while a five-year fix from PCF Bank offers a 2.9% interest rate, reports The Mirror.