The Government has confirmed a scheme is expanding, offering bonuses to Universal Credit claimants. The update came after a written question from Labour MP Gareth Thomas asking the Government what plans were underway to "increase levels of household savings".

Treasury minister Lucy Rigby penned a response, explaining the tax incentives around savings and what policies are in place. She said: "Everyone should have access to affordable and appropriate products for their financial wellbeing.

"The Government is committed to breaking down barriers to opportunity and ensuring individuals and households have greater financial security." She said the Government "offers several ways" to encourage people to build their savings.

One such policy she spoke about is the Help to Save scheme. This is a savings account available to people on Universal Credit where you get a 50p bonus for every £1 you pay in.

The account has a four-year term and you can deposit up to £50 each month, meaning you can pay in £2,400 over the four years, and get a bonus of up to £1,200. You get two bonuses, one at the end of the first two years, equivalent to 50 percent of the highest balance you have saved, up to £600.

You get a second bonus at the end of the fourth year, equivalent to the difference between the highest balance saved across the first two years and the highest balance you have saved across the last two years. This means you can get up to £600 through the second bonus.

Ms Rigby said: "The Help to Save scheme supports financial resilience for working people on low incomes by encouraging consistent, long-term saving and helping them build a financial buffer to plan and prepare for the future. The scheme is currently available to working individuals in receipt of Universal Credit, ensuring it remains targeted at its intended population."

However, there will be some changes to the scheme, as set out recently. Ms Rigby explained: "As announced at Autumn Budget 2025, the Government will make the Help to Save scheme permanent and, from April 2028, will expand eligibility to include all Universal Credit claimants who receive the child element, the caring element or both."

Under the current eligiblity rules, you can open a Help to Save account if you get Universal Credit and you, or your partner if you have a joint claim, had take-home pay of £1 or more in your last monthly assessment period.

Your take-home pay is your pay packet after deductions have been applied, such as tax or National Insurance. If you have a joint claim, both you and your partner can apply for your own Help to Save accounts.

This means you could together get up to £2,400 in bonuses over the four years, through your two accounts. You need to apply separately for a Help to Save account.

Ms Rigby also spoke about how you could build up your savings tax-free. She said: "The overall ISA allowance of £20,000 ensures that savers can put significant sums away in a tax-free savings account.

"For those who save outside of an ISA, the Personal Savings Allowance provides up to £1,000 of tax-free savings interest for basic rate taxpayers, and £500 for higher rate taxpayers."

A benefit of ISA is all your interest earnings or investment growth within an ISA wrapper is tax-free, as long as you only deposit up to £20,000 a year. This allowance is changing, so from April 2027, you will only be able to use up to £12,000 of the allowance for either cash ISAs or stocks and shares ISAs.

The remaining £8,000 allowance will have to be used for stock and shares accounts. These new rules will not apply to over 65s, who will retain the current allowance.