Martin Lewis has explained how people on benefits could get a bonus of up to £1,200 on their savings through a special account.
The MoneySavingExpert founder described the little-known Help to Save account to his 1.5 million Twitter followers this week.
The account is run by the government and offers a bonus of 50p for every £1 you save. It means you're getting a 50 per cent return on your money, meaning if you save the maximum amount each month across the four-year term of the account, you would end up with a bonus of £1,200.
Account holders can save less and still get a bonus, although it will be a lower amount - for example, save £25 a month over two years and the holder would get £600 back.
In a tweet published on Monday, Mr Lewis said: “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 per cent bonus on the most you had in there (even if you've taken it all out). Unbeatable!”
Individuals eligible to apply for the account include people who receive working tax credit, receive child tax credit or claim universal credit. Couples can also open separate Help to Save accounts if they are both eligible but will need to apply individually.
However, a point to note is depending on how much money the account holder already has saved elsewhere, any cash put aside in a Help to Save account could potentially affect benefits. Couples must have less than £6,000 in personal savings to make sure Universal Credit and Housing Benefit payments aren't reduced.
This includes any savings in a Help to Buy account, but not bonuses. Any savings or bonuses earnt through Help to Save will not affect how much Working Tax Credit is received.
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.
Mr Lewis described the Help to Save account as “unbeatable” compared to other savings accounts.
Cost of living: How to help
The cost of living crisis has touched every corner of the UK, pushing families to the brink with rising food and fuel prices.
- The Independent has asked experts to explain small ways you can stretch your money, including managing debt and obtaining items for free.
- If you need to access a food bank, find your local council's website using gov.uk.https://www.gov.uk/find-local-council and then use the local authority's site to locate your nearest centre. The Trussell Trust, which runs many foodbanks, has a similar tool.
- Citizens Advice provides free help to people in need. The organisation can help you find grants or benefits, or advise on rent, debt and budgeting.
- If you are experiencing feelings of distress and isolation, or are struggling to cope, The Samaritans offers support; you can speak to someone for free over the phone, in confidence, on 116 123 (UK and ROI), email jo@samaritans.org, or visit the Samaritans website to find details of your nearest branch.
Martin Lewis has been a vocal figure in support of Britons through the cost of living crisis. Last month he held a Q&A with the chancellor and held private calls with him urging further financial measures to help the poorest people across the UK with soaring energy bills.
You can apply for a Help to Save account through the Gov.uk website.
For those who don’t have access to the internet, you can still get an account by calling 0300 322 7093.
