Martin Lewis provides advice on help to save accounts
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Millions of Britons on low incomes could get a bank account boost of up to £1,200 to help with cost of living crisis. With energy bills on the rise many families will be looking at ways to save and make some extra cash to put towards the increasing costs.
People can pay in between £1 and £50 each month and can pay in as many times as they want.
This means that if a person pays in the full £50 each month, they will receive £1,200 over the four years.
The total amount saved over the four years would be £2,400, which the Government adds £1,200 to.
If someone has saved £50 by September 21, they will not be able to pay into their account again until October 1.
Funds can be deposited by debit card, standing order or bank transfer.
It’s deposited into an easy access account, so savers can make withdrawals if they need to.
However, Britons should be aware that this could impact the overall bonus that’s available.
At the end of year two and year four, people are paid a 50 percent bonus.
The first bonus is based on the highest balance that has been saved.
At the end of the four years, the final bonus is based on the difference between the highest balance in the first two years and the highest balance saved in the last two years.
Savers are not obliged to add funds every month.
People can close their accounts at any time but if they do this early, they could miss out on their next bonus and will not be able to open another one.
After four years, the Help to Save account will close. People cannot reopen it once this happens.
The scheme is available to 3.5 million British people who are claiming Working Tax Credits and Child Tax Credits, and some Universal Credit claimants.
However, many people claiming benefits are not aware of the Help to Save scheme which has been specifically designed to help them by boosting their savings by 50 percent.
Universal Credit recipients can set up an account if a claimant earned £658.64 or more from paid work in the last monthly assessment period.
Couples who receive payments can each set up a Help to Save account.
The amount a saver receives from Universal Credit will not be affected as long as they have £6,000 or less in personal savings.
Any bonuses received through Help to Save will also not affect Universal Credit payments.
Working Tax Credit claims will not be affected by a person having the account.
UK residents are entitled to open a Help to Save account if they are:
• Receiving Working Tax Credit or Child Tax Credit
• Entitled to Universal Credit and have earned income of at least 16 hours a week at the National Living Wage (from April 1, 2021, this is equivalent to £617.76 a month) in the previous assessment period.
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