Universal Credit: Britons may be able to get a £1,200 tax-free payment – full details
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Universal Credit payments can support those who are out of work or who are on a low income, a prevalent circumstance given the ongoing pandemic. The sum is administered by the Department for Work and Pensions (DWP), and is issued to eligible Britons once a month. But for those who are looking for an extra financial boost, there may be a convenient and easy way to obtain this.
To help Universal Credit claimants, the government has set up a Help to Save programme which could produce a very favourable financial outcome.
The Help to Save scheme is designed to offer Britons the chance to unlock an additional sum of money if they put just a little away each month.
Universal Credit claimants will receive a bonus of 50 pence for every £1 they save into the Help to Save account over a four year period.
Each calendar month, Universal Credit claimants will be able to put away between £1 and £50 into their personal Help to Save account.
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While paying in is not a requirement, it can really help those in receipt of Universal Credit to improve their finances over time.
To further incentive people getting Universal Credit, the government offers bonuses for how much a person decides to put away into their Help to Save account.
Under Help to Save, Universal Credit savers will be entitled to two tax-free bonuses over the four year period.
These bonuses will be paid to individuals even if they do choose to withdraw money from their Help to Save account.
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Once a person puts money into their Help to Save account for the first two years, the Universal Credit claimant will receive a bonus.
This first Help to Save bonus is worth 50 percent of the highest balance a person has managed to save.
However, after four years of a Help to Save journey, Universal Credit claimants will then receive a final bonus – as long as they have continued to put away into the account.
The second Help to Save bonus is worth 50 percent of the difference between two amounts:
- The highest balance saved in the first two years
- The highest balance saved in the last two years
For this reason then, it may be important for Universal Credit savers to increase their highest balance, as they may not be able to receive a second Help to Save bonus otherwise.
As Universal Credit claimants can save a maximum of £50 each calendar month into a Help to Save account, this works out as a savings balance of £2,400 over a four year period.
Consequently, those putting money into Help to Save in these amounts could receive a government bonus worth £1,200 at the end of their four year savings journey.
Universal Credit claimants will be able to apply for a Help to Save account on the government’s official website.
To unlock a Help to Save entitlement, Britons will need a Government Gateway user ID and password to apply – which can be created when an application is made if a person does not already have one.
However, Universal Credit claimants must also meet certain criteria to be able to apply for a Help to Save account.
If a person claims Universal Credit, they must have earned £604.56 or more from paid work in their last monthly assessment.
Universal Credit claimants must also be living in the UK to receive a Help to Save account, but can continue to use the account even if they stop receiving benefits from the DWP.
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