On a low income? You may qualify for up to £1,200 tax-free bank account bonus

This Morning: Martin Lewis discusses Help to Save scheme

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Via Help to Save, those eligible who set up an account can get a bonus of 50 pence for every £1 they save over the course of four years. Reassuringly, Help to Save is backed by the Government, meaning all savings in the scheme are secure.

However, the amount a person can deposit in the account is not limitless.

Between £1 and £50 can be saved via Help to Save each calendar month.

That’s not to say money needs to be paid in every month.

Deposits can be made as many times as a person likes, but the most that can be paid in each calendar month is £50.

Money can be paid in via debit card, standing order or bank transfer.

Savings can be withdrawn from the account, but only to the person’s bank account.

Bonuses will then be paid at the end of the second and fourth years, with the amount being based on how much has been saved.

These bonuses are tax-free, and those earned will be paid even if money is withdrawn.

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After the first two years, the first bonus will be paid, provided the account has been used to save.

This bonus will be 50 percent of the highest balance saved.

After four years, those who have continued to save will get a final bonus.

This will be 50 percent of the different between two amounts:

  • The highest balance saved in the first two years (years one and two)
  • The highest balance saved in the last two years (years three and four).

If the highest balance doesn’t increase, a final bonus won’t be earned.

As the most that can be paid into the account each calendar month is £50, a total of £2,400 can be saved in the account over the course of four years.

As such, the most that can be earned from savings in four years via Help to Save is £1,200 in bonus money.

This is paid into the bank account, rather than the Help to Save account.

Who is eligible for Help to Save?

It is possible to open a Help to Save account if a person is any of the following:

  • Receiving Working Tax Credit
  • Entitled to Working Tax Credit and receiving Child Tax Credit
  • Claiming Universal Credit and they (with their partner if it’s a joint claim) earned £617.73 or more from paid work in their last monthly assessment period.

They also need to be living in the UK. If a person live overseas, they can apply for an account if they’re either 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, they can rest assured they are able to continue using their Help to Save account.

However, it is important people are aware that saving money through this account could potentially affect their eligibility for certain benefits and how much they get.

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