Universal Credit: Help to Save data shows Covid-19 forced change – eligibility explained | Personal Finance | Finance

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Universal Credit claimants can profit from a Help to Save account, which permits eligible savers to get a 50p bonus from the Government for each £1 they put away over 4 years. To qualify for the account, savers should be claiming Universal Credit and have earned £604.56 or extra from paid work of their final month-to-month evaluation interval.

The Help to Save account will enable savers to pay up to £50 every month into the account, which equates to £2,400 over 4 years.

Over the course of 4 years, bonuses will probably be awarded to holders, with probably the most they will earn from their financial savings being £1,200 in bonus cash.

Today, HMRC launched official statistics on what number of Help to Save accounts have been opened over the past six months.

Between August 2020 to January 2021, 42,050 Help to Save accounts have been opened.

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The whole variety of accounts opened now stands at 264,800, a 19 % enhance on the whole variety of accounts opened by the tip of July 2020.

In whole, 216,950 people have now made a deposit to their Help to Save account, a 21 % enhance in contrast to the earlier launch, however there are 47,850 accounts but to obtain a single deposit.

On these figures, Myron Jobson, a Personal Finance Campaigner at interactive investor, famous coronavirus seems to have had an affect on motivation: “The coronavirus crisis has clearly helped increase the uptake of Help to Save towards numbers the Government would have hoped for when it first launched the scheme back in 2018.

“According to official figures, the variety of individuals on Universal Credit rose by 98 % since 12 March to six million as of 14 January 2020 – lots of whom will probably be eligible for the Help to Save scheme.

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“It is a great initiative to help instil a culture of savings among the nation’s most cash-strapped individuals. But for those who’ve felt the full force of Covid’s financial pinch, the priority has been to stay above the breadline.

“For those who can afford it, a 50 percent savings bonus is too good a carrot to pass up at a time when many conventional savings accounts offer a pittance in interest.

“Those on a low income should consider whether saving is a priority if it would mean they would have difficulty meeting outstanding debt commitments, particularly priority debts such as council tax, as a result.

“However, the latest Help to Save uptake figures suggest that the value of having something to fall back is not lost on the nation’s most vulnerable.”

Holly Mackay, the CEO at Boring Money, was somewhat surprised by the figures, noting: ““It appears counter-intuitive {that a} scheme like Help to Save might truly expertise a bounce throughout the pandemic.”

Holly continued by examining the welcome long-term habits the Help to Save scheme could be creating: “A rising variety of individuals on Universal Credit meant {that a} bigger pool of individuals have been eligible to apply to open an account.

“And for those that already had an account in place and enjoyed a stable income in 2020, this was actually a good time to set money aside for the future.

“Like so many things during the pandemic, the savings story has been a tale of two halves.

“On the one hand, many households skilled a particularly tough 2020 and struggled to make ends meet.

“Meanwhile, others actually saw their bank balance swell as lockdown led to an enforced spending cut and those in stable jobs spent less on commuting. This resulted in a massive surge in household savings, and today’s figures show many of those that had an open Help to Save account took this opportunity to set money aside in the government scheme.

“Help to Save could be a springboard to long-term saving, although the latest figures show the average amount deposited in each account is around £470, so they represent pretty modest savings pots at the moment.

“But round 80 % of account holders have began making contributions, and 91 % of these month-to-month financial savings are on the most £50 per thirty days permitted, so there’s proof of a daily financial savings behavior rising.”

To apply for a Help to Save account, claimants will want to head to the Government’s web site and have their Government Gateway consumer ID and password on the prepared.

Do you will have a cash dilemma which you would like a monetary professional’s opinion on? If you want to to ask one in all our finance consultants a query, please e-mail your question to private.finance@reachplc.com. 

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