The particular savings account in question is widely known as the Help to Save which assists people on benefits in starting to save. Specifically, the account allows people who are eligible for Working Tax Credit or claiming Universal Credit to get a bonus of 50p for every £1 they save over four years. Unlike other savings accounts, the Help to Save is backed by the Government which means all the money is secure.
To apply for this account, savers must have their Government Gateway user ID and password, and logon onto their account.
If they do not have a user ID, they can create one when they apply via the Government’s website.
While completing the application process, savers will need to share their bank details.
Universal Credit and Working Tax Credit recipients can save between £1 and £50 each calendar month through the Help to Save.
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However, no one who gets these benefits is forced to have to pay money into the account every month.
They can deposit money into their Help to Save account by debit card, standing order or bank transfer.
Savers can also pay in as many times as you like, but it should be noted the maximum someone can pay in each calendar month is £50.
A hypothetical scenario cited on the Government’s website states: “For example, if you have saved £50 by January 8, you will not be able to pay in again until February 1.”
After the end of the four years, the same claimant gets a final bonus if they continue to save which will be 50 percent of the difference between two amounts.
An example on the Government’s website highlights how the bonus could work for recipients of the Working Tax Credit or Universal Credit.
On the Government’s website, it states: “You pay in £25 every calendar month for two years. You do not withdraw any money. Your highest balance will be £600. Your first bonus is £300, which is 50 percent of £600.
“In years three and four you save an extra £200 to grow your highest balance from £600 to £800.
“Your final bonus is £100, which is 50 percent of £200. Even though you withdrew some money after your balance was £800, this does not affect your bonus.”
However, anyone interested in the Help to Save account must be aware it closes four years after you open it.
This means savers will no longer be able to reopen it or open another Government Help to Save account.
Despite this, savers will be able to keep any of the money they have saved from their account.
Many savers opt to close their account, which can be done at any given time.
However, if someone closes their Help to Save early, they risk missing their next bonus and they will not be able to open another one.