DWP Launches New Savings Scheme – Universal Credit Claimants Could Get a £1,200 Bonus
Saving money is always a good idea, but for many people living on a low income, it can be challenging. The good news is that the Department for Work and Pensions (DWP) has launched a new savings scheme that aims to encourage saving, even in small amounts. This new initiative allows Universal Credit claimants and others on certain benefits the chance to receive a bonus of up to £1,200.
This article breaks down everything you need to know about the scheme – from who qualifies and how it works, to when you can get your hands on that £1,200 bonus.
What Is the DWP Savings Scheme?
The DWP has introduced a savings plan that is not just about saving money – it’s about rewarding people for building financial habits. This program is designed to support people who are claiming Universal Credit or Working Tax Credit, and gives them a 50% bonus on savings over a set period.
For every £1 you save, the government adds 50p. If you save £2,400 over four years, you could end up with a £1,200 bonus — on top of your savings. This makes it a very attractive offer for those who are eligible.
How Does the Scheme Work?
The scheme allows users to save between £1 and £50 per month into a secure account. At the end of two years, your savings are checked, and a bonus of 50% is paid on the highest balance achieved during that time.
You can then continue for another two years, saving in the same way and earning a second bonus. This means that over four years, the maximum bonus is £1,200, based on saving the full £50 each month.
Overview Table – DWP Savings Scheme at a Glance
| Feature | Details |
|---|---|
| Scheme Name | Help to Save Scheme |
| Managed By | Department for Work and Pensions (DWP) |
| Eligible Claimants | Universal Credit, Working Tax Credit |
| Monthly Saving Limit | £1 to £50 |
| Bonus Rate | 50% on the highest balance |
| Total Bonus Possible | Up to £1,200 over 4 years |
| Duration | Two 2-year periods |
| Account Type | Government-backed savings account |
Eligibility: Who Can Apply?
You might be wondering if you qualify. Here are the basic requirements:
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You must be receiving Universal Credit and have had earnings of £658.64 or more in your last monthly assessment period (this may vary).
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OR you must be entitled to Working Tax Credit or Child Tax Credit along with Working Tax Credit.
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You must be living in the UK.
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You must be 18 years or older.
If you meet these conditions, you can easily open an account online. It takes only a few minutes.
Benefits of the Scheme
Aside from the obvious bonus money, this scheme comes with several other advantages:
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Flexibility: You’re not locked into saving every month. You can skip months without losing the bonus, as it’s based on your highest balance.
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No Risk: Your savings and the bonus are safe, as the account is government-backed.
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Motivation to Save: Even small amounts can add up, and the bonus makes saving much more rewarding.
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Builds Financial Discipline: It encourages good financial habits and could be the first step toward more long-term saving.
Features & Account Management
Once enrolled, you will receive an online account to manage your savings. You can:
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Deposit money using bank transfer or standing order
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View your balance and estimated bonus
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Withdraw funds at any time (though this may affect your bonus)
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Track how much you’ve earned in bonuses
Note: Withdrawing money won’t disqualify you, but it may reduce the amount of bonus you receive if it lowers your highest balance during the saving period.
How to Apply?
Applying is easy and can be done online via the government’s official website. Here’s a quick step-by-step:
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Visit the official UK government portal.
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Log in using your Government Gateway account (or create one).
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Fill in the required details to open your Help to Save account.
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Start saving!
It’s quick and doesn’t require any visits to a bank or office.
FAQs
Q1: What happens if I stop saving for a few months?
You can stop and start at any time. The bonus is calculated on your highest balance, not on how regularly you save.
Q2: Will the savings affect my Universal Credit payments?
In most cases, having savings in this account will not affect your Universal Credit. However, if you save more than £6,000 across all your accounts, it may impact your benefit amount.
Q3: Is the scheme only for people on Universal Credit?
No. People on Working Tax Credit or both Child Tax Credit and Working Tax Credit can also apply.
Q4: How often do I get the bonus?
You receive your first bonus after two years, and your second bonus after four years, based on the highest balance in each period.
Q5: Can I withdraw my money anytime?
Yes, you can withdraw your savings whenever you like. Just remember, taking out money may lower your bonus.
Final Verdict
The DWP’s savings scheme is a fantastic opportunity for people on lower incomes to grow their savings with government support. With the chance to earn up to £1,200 in bonuses over four years, it’s a financial boost that could really help in times of need.
Even if you can only afford to save a few pounds each month, it’s worth doing. Every little bit adds up, and the 50% bonus is too good to ignore.
So if you’re eligible, don’t wait—check your status, sign up, and start saving today. It might be the easiest £1,200 you’ll ever make