While some may have found themselves making savings during the UK lockdown, the coronavirus pandemic may have left others seriously concerned about how they will make ends meet. Although it won’t be a priority for everyone right now, some people on low income may qualify for a savings account which offers a 50 percent tax-free bonus.
A total of two tax-free bonuses can be earned over the four years, and any bonuses earned will be paid to savers, even if they withdraw money.
After the first two years, the person will get their first bonus – provided they’ve been using their account to save.
The bonus will be 50 percent of the highest balance saved in the account.
Then, if the person continues to save, then they’ll get a final bonus.
This amount will be 50 percent of the difference between the highest balance saved in the first two years (years one and two) and the highest balance saved in the last two years (years three and four).
Should the highest balance not increase, then a final bonus won’t be earned.
With the maximum amount a person can save in the account each month being £50 per calendar month, a total of £2,400 can be saved in the account over four years.
It means the most that can be earned from the tax-free bonus over four years is £1,200.
Rather than the money being paid into the Help to Save account, the bonus is paid into the person’s bank account.
Those who are receiving Working Tax Credit, or entitled to Working Tax Credit and receiving Child Tax Credit may be eligible.
Those who claim Universal Credit and whose household earned £604.56 or more from paid work in their last monthly assessment period can also open a Help to Save account.
Further eligibility rules state the person needs to be living in the UK.
Those who live overseas can still apply however, if they’re a Crown servant or their spouse or civil partner, or a member of the British armed forces or their spouse or civil partner.
If a person stops claiming benefits, then they can continue to use the account.
However, those looking to save via Help to Save do need to be aware of certain rules when it comes to savings and eligibility for benefits.
That’s because GOV.UK warns: “Saving money though a Help to Save account could affect your eligibility for certain benefits and how much you get.”