The Department for Work and Pensions (DWP) is introducing a £1,200 bonus for Universal Credit claimants in the UK. This scheme is designed to provide financial relief and encourage savings among low-income individuals. Here’s a detailed look at who qualifies, how to claim, and the key dates for this bonus.
Key Details About the £1,200 Universal Credit Bonus
| Maximum Bonus | £1,200 over four years |
| Savings Limit | £50 per month |
| Eligibility | Universal Credit or Working Tax Credit claimants |
| First Bonus Payment | End of the second year |
| Final Bonus Payment | End of the fourth year |
| Account Type | Help to Save account |
| Application Method | Online via Gov.uk or HMRC app |
What Is the £1,200 Universal Credit Bonus?
The £1,200 bonus is part of the Help to Save scheme, which rewards claimants who regularly save money. Through this program, eligible participants can earn up to a 50% bonus on the amount saved over a four-year period. For every £1 saved, the government contributes 50p, with the maximum bonus capped at £1,200 over four years.
This initiative is aimed at helping Universal Credit and Working Tax Credit claimants build a financial cushion for emergencies or future expenses.
Eligibility Criteria for the Universal Credit £1,200 Bonus
To qualify for the £1,200 bonus, claimants must meet the following conditions:
- Receiving Universal Credit or Working Tax Credit:
- You must be on Universal Credit with an income of at least £604.56 in your last monthly assessment period.
- Alternatively, you can qualify if you receive Working Tax Credit.
- UK Residency:
- You must be a UK resident throughout your participation in the Help to Save scheme.
- Age Requirement:
- You need to be aged 18 or older.
- Savings Commitment:
- You must save between £1 and £50 monthly into a Help to Save account.
How Does the Help to Save Scheme Work?
- Opening an Account:
Eligible claimants can open a Help to Save account through the official UK Government website or by using the HMRC app. - Savings Limit:
- You can save a maximum of £50 per calendar month.
- Savings can be flexible, meaning you don’t have to deposit money every month.
- Bonus Payments:
- First Bonus: Paid at the end of the second year, calculated as 50% of your highest balance saved in the first two years.
- Final Bonus: Paid at the end of the fourth year, calculated as 50% of the difference between your highest balance in years three and four and your highest balance in the first two years.
- Maximum Bonus:
By saving £50 per month consistently for four years, you can earn up to £1,200 in bonuses.
Payment Dates for the £1,200 Bonus
- Help to Save Bonuses are paid in two instalments:
- First Bonus: Paid at the end of the second year.
- Second Bonus: Paid at the end of the fourth year.
For example:
- If you start saving in January 2024, your first bonus will be paid in January 2026, and your final bonus in January 2028.
Advantages of the Universal Credit £1,200 Bonus
- Encourages Saving:
The scheme motivates low-income earners to build savings for emergencies or future needs. - Flexible Contributions:
You’re not required to save a fixed amount monthly, making it accessible for people with fluctuating incomes. - Secure Scheme:
The Help to Save account is backed by the UK Government, ensuring your money is safe.
How to Apply for the Help to Save Scheme
Eligible claimants can apply through:
- The official UK Government website.
- The HMRC mobile app.
- By calling the Help to Save helpline for support.
You’ll need the following to apply:
- National Insurance Number.
- UK bank account details for payments.
FAQs
Q1. Can I withdraw money from my Help to Save account?
Yes, you can withdraw money at any time. However, withdrawing funds may affect your bonus amount as it is based on your highest balance.
Q2. What happens if I stop saving?
If you stop saving, you won’t lose your account or previous savings. However, you may not receive the maximum bonus.
Q3. Is the bonus taxable?
No, the £1,200 bonus is tax-free.
Q4. Can I open multiple Help to Save accounts?
No, you can only open one Help to Save account.
Q5. What happens after four years?
Your account will close automatically, and you’ll keep all your savings and bonuses.
Final Thoughts
The £1,200 Universal Credit bonus is a valuable opportunity for eligible claimants to build savings with government support. By leveraging the Help to Save scheme, participants can secure their financial future with minimal effort. If you’re eligible, don’t miss this chance to boost your savings.