The Department for Work and Pensions (DWP) has introduced a significant financial boost for eligible Universal Credit claimants. The new £1,200 bonus scheme aims to provide extra financial support to individuals and families during challenging times. Below is a detailed guide on who qualifies for this bonus, how it works, and when payments will be made.
Overview of the £1,200 Bonus
The DWP’s £1,200 bonus is designed to reward Universal Credit claimants who actively save through the Help to Save scheme. This government initiative encourages people on low incomes to build a financial safety net by offering a generous 50% bonus on savings over a four-year period. Participants can deposit up to £50 per month and earn up to £1,200 in bonuses, making it a valuable opportunity for those looking to improve their financial stability.
Eligibility Criteria
To qualify for the £1,200 bonus, you must meet the following criteria:
- Be on Universal Credit or Working Tax Credit: Only individuals receiving these benefits are eligible to open a Help to Save account.
- Earning Threshold: You must meet specific earning conditions, typically having earned at least £604.56 from paid work in your most recent monthly assessment period.
- Residency: Be a resident in the UK.
How the Scheme Works
The Help to Save scheme allows participants to deposit between £1 and £50 per calendar month into a secure savings account. The program offers two bonus payment periods:
- Year 1-2: After two years, you’ll receive a 50% bonus on the highest balance saved during this period.
- Year 3-4: Another 50% bonus is paid on any additional savings made in the final two years.
For instance, if you save the maximum £50 per month for four years, you could accumulate £2,400 in deposits and receive a £1,200 bonus, totaling £3,600.
Payment Dates and Process
The £1,200 bonus is not paid as a lump sum but in two installments over the four years of the scheme. The first bonus is paid after two years, while the second bonus is paid at the end of the four-year period. Payments are made directly into your bank account and are not counted as income, so they won’t affect your benefits.
How to Apply for Help to Save
Applying for Help to Save is straightforward:
- Visit the official GOV.UK website and search for “Help to Save.”
- Sign in using your Government Gateway account.
- Complete the online application, providing your bank details for bonus payments.
The application process takes only a few minutes, and once approved, you can start saving immediately.
Benefits of Joining the Scheme
- Financial Security: Build savings without losing benefits.
- Generous Bonuses: Earn 50% on your deposits.
- Flexible Deposits: Save as little or as much as you can each month, up to £50.
This initiative is a lifeline for those on low incomes, helping them develop good financial habits while earning extra money to support their families.
Final Thoughts
The DWP’s £1,200 bonus is a fantastic opportunity for Universal Credit claimants to improve their financial situation. By joining the Help to Save scheme, you not only secure a financial safety net but also earn substantial bonuses. If you’re eligible, don’t miss this chance to make the most of your savings.
FAQs
1. Can I withdraw my savings early?
Yes, but withdrawing funds will reduce the bonus you receive, as it’s based on your highest balance during each bonus period.
2. Is the bonus taxable?
No, the bonus is tax-free and won’t affect your benefits.
3. Can I open multiple Help to Save accounts?
No, each individual can only open one account.
4. What happens if I stop claiming Universal Credit?
You can still use your Help to Save account and earn bonuses, as long as you meet the initial eligibility criteria when opening the account.