Martin Lewis warns thousands could be missing out on over £1,000 free from government with one savings account
CONSUMER champion Martin Lewis has revealed how thousands could be missing out on over £1,000 in free government cash.
The MoneySavingExpert.com founder issued the warning on the latest episode of his ITV Money Show.
The money comes through the Help to Save account, which is specifically designed for those on low incomes and certain benefits.
Lewis described the account as “totally unbeatable”, adding: “If you’re eligible for it, there’s nothing like it out there.”
Lewis went on to explain how people can save through Lifetime ISAs as well.
The accounts can be used to buy your first home but you must be over 18 and under 40 to open one.
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You can put in up to £4,000 a year and the government will add a 25% bonus to your savings, up to a maximum of £1,000 a year.
You can withdraw your money after a minimum of a year of saving.
Lewis said: “If you’ve never bought a house and you haven’t opened one of these, or maybe you’re a parent of someone that age, put a quid in now.
“Then, tick tock, tick tock, that year’s clock starts ticking even if you haven’t got the money.
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“And when you want it, you’ll have had it for a year.”
How does the Help to Save account work?
The Help to Save account gives you extra cash on top of your savings – for every £1 you set aside into the account, the government gives you a 50p bonus.
You can pay in a maximum of £50 per month and you then get 50% of your grand total at the end of two or four years.
If you save the maximum amount per year, you can earn a bonus of up to £1,200 tax free over the four years.
That means to get the maximum bonus you would need to save £2,400 over the same time period.
If you were to put in the maximum amount and withdrew it after two years, you’d get £600 tax-free.
Who is eligible?
Help to Save accounts are open to people who:
- Receive Working Tax Credit
- Receive Working Tax Credit and are entitled to Child Tax Credit
- Claim Universal Credit and you (with your partner if it’s a joint claim) earned £658.64 or more from paid work in your last monthly assessment period
If you have a partner, you can apply for separate Help to Save accounts, however, you’ll both have to apply individually.
You also need to be a UK resident to be eligible.
If you stop claiming benefits you can carry on using your Help to Save account.
How do I open a Help to Save account?
Applying for a Help to Save account is pretty straightforward – but you’ll need a gateway user ID and password to set one up.
You just have to head to the Gov.uk website.
If you don’t have either of these, you can create them when you apply.
For those who don’t have access to the internet, you can call 0300 322 7093.
One thing to bear in mind is that you’ll be asked to provide your bank details when you apply, as the bonus is paid into your bank account and not your savings account.
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Meanwhile, the next instalment of the cost of living payment for millions on benefits is due from next Tuesday, November 8.
Plus, the next tranche of the Household Support Fund has been released.