With everyday living costs to cover, saving money can be something of a challenge for many. However, it may be that some people who are on a low income are able to get help with their savings.
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Help to Save is a type of savings account, and it allows certain people to get a bonus of 50 pence for every £1 they save over the course of four years.
There are limits as to how much can be paid into the account, however.
It’s possible to save between £1 and £50 each calendar month.
That said, savers do not need to pay money in every month.
It’s possible to pay money into this particular account in a number of ways, and these are by debit card, standing order or bank transfer.
There’s no limit as to how many times money is paid in, although the most that can be paid in each calendar month is £50.
The bonuses are paid at two different points in time – at the end of the second and fourth years.
These payments are tax-free, and two can be earned over the four years.
“You’ll get any bonuses you’ve earned even if you withdraw money,” Gov.uk states.
After the first two years, those who have been using the account to save will get the first bonus.
This will be 50 percent of the highest balance which has been saved.
After four years, the saver will get a final bonus – that’s if they’ve continued to save.
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At this point, the bonus will be 50 percent of the difference between two amounts:
- The highest balance saved in the first 2 years (years 1 and 2)
- The highest balance saved in the last 2 years (years 3 and 4).
So, if the highest balance doesn’t increase during these years, the saver will not earn a final bonus.
With the maximum that can be saved into the account per calendar month being £50, this adds up to £2,400 in savings over four years.
As such, the most that can be earned from these savings in four years is £1,200 in bonus money.
Rather than this money being paid into the Help to Save account, the bonus is paid into the bank account.
Help to Save: Who is eligible?
A person can open a Help to Save account if any of the following situations apply.
These are if they are:
- Receiving Working Tax Credit
- Entitled to Working Tax Credit and receiving Child Tax Credit
- Claiming Universal Credit and their household earned £604.56 or more from paid work in their last monthly assessment period.
Additionally, people need to be living in the UK.
Those living overseas, however, can apply for an account if they’re either a:
- Crown servant or their spouse or civil partner
- Member of the British armed forces or their spouse or civil partner.
Help to Save: How to apply
It’s possible to apply for this type of account online, via the government website.
It states: “You need a Government Gateway user ID and password to apply. If you do not have a user ID, you can create one when you apply.
“You’ll be asked to provide your UK bank details when you apply.”
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