Universal Credit claimants could get £1,200 boost paid into bank account | Personal Finance | Finance

While the UK inflation rate continues to erode the purchasing power of money, those able to continue saving may be looking to invest in the accounts that offer the most lucrative returns. The Government-backed Help to Save account offers the benefit of a 50 percent bonus for every £1 saved, beating all interest rates currently available on the market.

Available to those who claim Universal Credit or Tax Credits, savers can put away between £1 and £50 each calendar month, and there are no requirements to invest every month.

Savers can also pay into the account as many times as they like per month – as long as the figure doesn’t exceed £50.

The tax-free bonuses will be credited at the end of the second and fourth years, and the amount is based on how much the person has saved.

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How do Help to Save bonuses work?

Savers will get the first bonus after the first two years, which will equate to 50 percent of the highest balance saved.

After four years, savers get the final bonus if they continue to save. This bonus will be 50 percent of the difference between the two amounts:

• The highest balance saved in the first two years (years one and two)
• The highest balance saved in the last two years (years three and four).

The most Britons can earn from their savings in four years is £1,200 in bonus money. Adding this to the maximum amount people can save (£50 per month, equating to £2,400 over four years), it can leave savers with a sizeable £3,600 pot. However, it must be noted that if the highest balance doesn’t increase, savers will not earn a final bonus.

Will the Help to Save account affect my benefits?

Savings can bear an impact on a person’s benefit rate and eligibility. However, if those who claim Universal Credit or Housing Benefit have £6,000 or less in personal savings, the account will not affect how much Universal Credit a person gets. This includes Help to Save bonuses.

Any savings or bonuses earned through Help to Save will also not affect how much Working Tax Credit a person gets.

To apply for the account, savers will need their Government Gateway user ID and password, as well as their UK bank details. More information about that can be found on the Government website.