BBC expert says Universal Credit £1,200 free cash boost scheme key changes announced

BBC expert says Universal Credit £1,200 free cash boost scheme key changes announced New figures show more than 650,000 people are now using the scheme A BBC expert has explained how a major change is coming to a scheme which can give some people claiming Universal Credit a £1,200 cash boost. On Radio 4’s Moneybox show today (Sept 26) listeners were told that new figures show more than 650,000 people are now using the Help to Save Scheme. It is for people who are on Universal Credit to encourage them to save money. They can open a Help to Save account if they’re receiving Universal Credit and had take-home pay of £1 or more in your last monthly assessment period. For every £1 they save over 4 years the government will put in 50p. People can save between £1 and £50 each calendar month and do not have to pay money in every month. The most they can pay in each calendar month is £50. Presenter Paul Lewis said: “The government has paid out more than £300 million since to start of 2018 to customers of a scheme to help people on low incomes build up a savings pot. This week new figures show that more than 650,000 are now using this scheme called Help to Save.” Expert Dan Whitworth said: “Well it’s a savings account for people on Universal Credit who also work but they only have to have earned at least £1 in the month before they applied. They can save up to £50 a month andthe government adds a bonus of half of what you put in. You cans save for four years so if you pay in the maximum you could get £1,200 in government bonuses over that time.” Paul Lewis asked: “Can you get your money out if you need it?” Mr Whitworth replied:” Yes, although that can effect the bonus you get. The bonus is based on the highest balance you’ve built up in the account. So taking money out could mean you get smaller bonuses. Those payments are made at the end of the 2nd and 4th years when the account will close.” Mr Lewis said: “We now know that more than 650,000 people have one of these accounts. How much have they put into them?” Mr Whitworth explained: “More than £670 million since 2018 and the government says almost all those savers are putting away the maximum £50 every month. Also worth noting Paul, there is a change coming in about who can use it. From April 2028 anyone on Universal Credit will be eligible, including people who are not working. The government expects that to make another one and a half million households eligible.” The eligibility rules are due to change in 2028. The earning criteria will be removed for people with caring responsibilities, while all Universal Credit claimants will become eligible. The Government estimates this could make an additional 1.5 million households eligible for Help to Save. The scheme will also be offered through multiple financial providers rather than a single provider, meaning banks, building societies and credit unions will be able to offer Help to Save directly to eligible customers. Economic Secretary to the Treasury Lucy Rigby said: “Help to Save is a really beneficial scheme that offers a 50% government bonus on whatever you are able to save. We want more eligible people to take advantage of it.” People can save up to £50 each month, meaning they could put away a maximum of £2,400 over four years. The Government bonus is worth 50% of qualifying savings, potentially adding up to £1,200. The first bonus is paid after two years and is based on the highest balance saved during the first two years. A final bonus is paid after four years and is based on the increase in the highest balance between the first two years and the final two years. This means savers do not simply receive 50% of everything they have deposited. The bonus is calculated using the highest balances under the scheme’s rules. The bonus is paid directly into the customer’s bank account. Latest statistics show that 94% of people who have opened a Help to Save account save the maximum £50 each month. To listen to the Moneybox broadcast click here.