£1,200 Savings Bonus from DWP: Earn £1,200 Tax-Free Bonus in 4 YearsIf you live in the UK and are on Universal Credit or have a low income, the UK government has introduced an excellent scheme for you—Help to Save. Through this scheme, you can earn a tax-free bonus of up to £1,200 over four years. It is operated by NS&I (National Savings & Investments) and will remain open until April 2027.
What is the Help to Save Scheme?
This scheme is designed for people who earn a monthly income but either do not have a savings habit or wish to protect their money. If you deposit between £1 and £50 each month, after two years, NS&I will give you a 50% bonus on the highest balance you’ve saved. The same process continues for the next two years.
Example
If you deposit £50 each month:
- After two years, you will have saved £1,200 (50 × 24 months).
- You will receive a £600 bonus on this amount.
If you save £1,200 again over the next two years, you will receive another £600 bonus.
In total over four years:
- Savings: £2,400
- Bonus: £1,200
- Total: £3,600 will be credited to your account.
This scheme helps you build a habit of saving and provides financial support during emergencies or for large expenses.
Why is this Scheme Important?
It Encourages Saving
Many people wonder whether saving such small amounts can make a difference. But thanks to the 50% bonus, your money grows much faster. This makes it an excellent way to develop a savings habit.
It is Safe
Your savings are completely safe as NS&I is fully backed by HM Treasury. There is no investment risk involved.
Flexibility
You are not required to deposit £50 every month. If your expenses are higher one month, you can deposit less—or even skip that month. This makes financial planning more flexible and stress-free.
Bonus Helps in Emergencies
Even if you deposit only £10 a month and it grows to £240 in two years, you’ll receive a £120 bonus. This extra money could be very helpful during emergencies like medical expenses or sudden travel.
Who Can Benefit?
The scheme is open to:
- People on Universal Credit, who have earned at least £1 in the last month
- People on Working Tax Credit or Child Tax Credit
Once your account is opened, you can stay in the scheme for four years, even if your benefit status changes later.
Example
Rahul is a freelancer currently receiving Universal Credit. He started depositing £10 per month and joined the scheme.
Mira is a single mother on Child Tax Credit. She deposited £20 per month and received a good bonus after four years.
How to Start?
Step 1
Visit GOV.UK and open the Help to Save page. You’ll need a Government Gateway account. If you don’t have one, register on GOV.UK. You will need your National Insurance Number and bank account details.
Step 2
Once your account is set up, you can arrange an online standing order to deposit £1 to £50 each month.
Step 3
Bonuses are calculated on your highest balance after two years, and again after four years. The bonus will be transferred directly to your bank account.
Step 4
If you remain in the scheme for four years, you could earn up to a £1,200 tax-free bonus.
Read more: Seniors Could Get Up to $1,200 Monthly Help Checks — Check If You Qualify!
Example: Small Deposits, Big Benefits
If you deposit £30 a month:
- In two years: £720 savings + £360 bonus
- In the next two years: £720 savings + £360 bonus
- Final total: £1,440 savings + £720 bonus = £2,160
Even with modest savings of £30 per month, this can provide meaningful financial support.
How to Make the Most of This Scheme
Build an Emergency Fund
Save some money for unexpected expenses like doctor’s visits or travel.
Set Up a Standing Order
Regular monthly deposits will help you reach your bonus faster, just like building a habit.
Track Your Budget
Use budget apps like Snoop, Emma, or Moneyhub to monitor your savings and identify any months you might miss deposits.
Maintain Your Highest Balance
Since the bonus is based on your highest balance, avoid unnecessary withdrawals. Try to keep your balance as high as possible.
Share with Friends and Family
If your friends or family are eligible, encourage them to join the scheme as well.
Frequently Asked Questions
Can I skip months?
Yes. If your financial situation changes, you can skip deposits some months and your account will remain open.
Will I lose my bonus if I withdraw money?
Your bonus is based on your highest balance. If you withdraw funds, your highest balance will be reduced, and your bonus will be adjusted accordingly.
Is the bonus taxable?
No, the entire bonus is tax-free.
What if my Universal Credit stops?
You can continue in the scheme for the full four years, even if your earnings or benefit status changes after opening the account.
Conclusion
The Help to Save scheme is a fantastic opportunity for individuals with low incomes to build the habit of saving. It is flexible, safe, and easy to manage—and the 50% bonus makes it even more attractive.
If you or your family member is on Universal Credit or Tax Credit, visit GOV.UK today and open your account. A small step today could lead to greater financial security in the future. This could be a big step toward a better tomorrow.
