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The number of people claiming Universal Credit has surged this year, with more than three million more people now claiming the payment. As the UK population deals with the financial impact of the coronavirus pandemic, those who are receiving the benefit are being urged to look into whether they can access further financial support.
Specifically, Universal Credit and Working Tax Credit recipients are being directed to check to see if they can open a Help to Save account.
This is a savings scheme which sees the government add 50 pence to every £1 saved.
A total of £50 can be paid in each month, and the account can remain open for four years.
As such, a tax-free government bonus of £1,200 can be paid to savers who make the maximum contributions.
Official statistics released by HM Revenue and Customs (HMRC) last week show during the past six months, 60,000 new accounts have been opened.
Now, the total number of Help to Save accounts which have been opened stands at 222,000 – a 37 percent increase on the number which had been opened up to the end of January 2020.
While some may not be in the position to set aside cash right now, Britons are being urged to see if they can open an account now, with a view to save in the future.
“Schemes like ‘Help to Save’ provide a great opportunity for people who receive Working Tax Credits or Universal Credit to build their savings,” Pauline van Brakel, Chief Product Officer at Yolt, told Express.co.uk.
“It’s positive to see the number of savings being deposited via this scheme growing, despite the challenging economic climate.”
An increase in the number of people saving is a trend which Yolt has seen with its own UK users recently.
“Our own data also suggests that, for lots of people in the UK, the nation-wide lockdown prompted and enabled many to save,” she continued.
“The average amount saved during lockdown was far higher than at the start of the year as many people saw their chances to spend drastically reduced.
“On average, Yolt users saved over 40 percent more every month in May, June and July, than they did at the start of the year.
“It’s so important that everybody, regardless of their financial situation, is empowered to save and that everyone has access to tools and resources that make this process easier.
“Saving doesn’t have to be done in large chunks and putting aside even a small amount every month can make a big difference in the long run.
“Making use of schemes, such as ‘Help to Save’ or even just opening a dedicated savings account can make this process easier.
“However the first step for anyone looking to start saving is to take stock of their finances – apps like Yolt enable you to see a clear view of your income and outgoings, which in turn allow you to work out how much you can afford to save each month.”
Meanwhile, Jane Goodland, corporate affairs director at Quilter, also commented on the Help to Save statistics.
She said: “In the last few months, many will have seen a radical change to their financial situation.
“Jobs will have been lost, and some will now be claiming Universal Credit, often for the first time in their lives.
“In order to save for a financially secure future, people claiming Universal Credit should consider opening a Help to Save account while they are eligible, and make the most of the generous government bonus on offer, which they can continue claiming even if they find employment later on down the line.
“Even if you are only able to contribute a small amount each month, it is the first step to building up a financial safety net and will encourage a positive savings habit once you get back into employment and can begin to contribute more each month.
“If you are able to find employment later on down the line, you will still be able to save into the scheme and could generate a £1,200 bonus if you save the maximum amount of £2,400.
“It is times such as the present which emphasise the need for people to have an adequate savings buffer to manage financial shocks without having to turn to high-interest credit.
“But despite the unbeatable 50 percent rate of return, uptake remains low as only 3.6 percent of eligible individuals have opened an account and many of these accounts remain empty.
“This may be due to the fact that those on Universal Credit will struggle to find the cash at the end of the month to pay into the scheme, but the extremely low uptake rates should concern the government.”
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