DWP Confirms £1,200 Bonus for Universal Credit Claimants; Who will get it? Check Eligibility

The DWP confirms Universal Credit claimants can earn up to £1,200 in bonuses through the Help to Save scheme. By saving £1–£50 monthly for four years, the government rewards savers with a 50% bonus on their balance. With over 500,000 accounts already opened and £200 million saved, this scheme is one of the UK’s most generous savings incentives. Here’s everything you need to know before the April 2027 deadline.

by Anjali Tamta

Published On: September 12, 2025

DWP Confirms £1,200 Bonus for Universal Credit Claimants: If you’ve been hearing chatter about a £1,200 bonus for Universal Credit claimants, it’s natural to wonder if this is real money hitting your account, a new government scheme, or just another headline grabber. The truth? It’s linked to a government savings initiative called Help to Save, designed to give lower-income households a serious incentive to build financial security. The Department for Work and Pensions (DWP), alongside HM Revenue & Customs (HMRC), has confirmed that the scheme remains available until April 2027. If you qualify and use it wisely, you could receive up to £1,200 in government-funded bonuses. This isn’t a handout—it’s a structured program where your savings are matched at one of the highest rates in the developed world. Let’s break it down in detail.

DWP Confirms £1,200 Bonus for Universal Credit Claimants

The £1,200 Universal Credit bonus is real—but it comes through saving in the Help to Save scheme, not as a one-off payout. By saving £1–£50 a month, eligible claimants can receive a 50% government bonus, unmatched by any other savings product. With more than half a million accounts already active and over £200 million saved, the program is helping families across the UK build stability and peace of mind. If you qualify, don’t wait—open your account before the April 2027 deadline and start building your future today.

Topic	Details
Bonus Amount	Up to £1,200 over four years via Help to Save
Who Qualifies	Universal Credit claimants with at least £1 earned income in the last assessment period; Tax Credit recipients
How It Works	Save £1–£50 per month; government adds a 50% bonus on your highest balance after 2 and 4 years
Maximum Return	£2,400 saved + £1,200 bonus = £3,600 total
Launch Year	Introduced in 2018, extended until April 2027
Uptake	Over 500,000 accounts opened; more than £200 million saved collectively (HMRC 2024)
Official Info	GOV.UK Help to Save Eligibility

What Exactly is the £1,200 Universal Credit Bonus?

The so-called “£1,200 bonus” isn’t a cash payout that automatically lands in your bank account just for being on Universal Credit. Instead, it’s the maximum possible bonus you can earn through the Help to Save scheme.

The structure is simple:

You open a government-backed account with NS&I (National Savings & Investments).
You can deposit between £1 and £50 each month.
After two years, you receive a government bonus equal to 50% of your highest balance during that period.
After four years, you receive a second bonus—another 50% of any additional savings compared to your earlier highest balance.

This adds up to a possible £1,200 bonus on top of £2,400 in personal savings, giving you £3,600 total. For comparison, most UK savings accounts offer 3–5% annual interest at best. Help to Save’s 50% bonus makes it by far the most lucrative short-term savings product in the country.

Why Did the Government Launch Help to Save?

The UK has a long-standing savings problem. The Office for National Statistics (ONS) has reported that around one in three working-age adults has less than £100 in savings. The Money Advice Service has also highlighted that 12 million UK adults lack a savings buffer of even £300.

This lack of financial resilience has ripple effects:

People are more likely to rely on high-cost credit (like payday loans).
Minor unexpected expenses—such as car repairs or dental bills—can push families into debt.
The stress of living paycheck to paycheck affects mental and physical health.

Recognizing this, the government launched Help to Save in September 2018. The aim was to encourage those on low incomes to start saving small, manageable amounts with a meaningful incentive. Originally set to end in September 2023, the scheme was extended to April 2027, following campaigns by charities such as Citizens Advice, the Resolution Foundation, and financial experts like Martin Lewis.

Who is Eligible for the £1,200 Bonus?

The rules are straightforward, but not everyone qualifies. You’re eligible if:

You are entitled to Working Tax Credit or Child Tax Credit, or
You are receiving Universal Credit, and in your last monthly assessment period you had earned income of at least £1.

Additional conditions:

You must be resident in the UK, though Crown servants, armed forces personnel, and their spouses posted overseas are also eligible.
Each person can open only one Help to Save account.

One of the best features: eligibility is checked only at account opening. Even if your circumstances change later—say your earnings drop or you move off Universal Credit—you can continue saving and still receive the bonuses.

How the Bonus Works in Practice?

The Help to Save bonus is calculated in two parts:

Year 1–2 bonus: 50% of your highest balance in the first two years.
Year 3–4 bonus: 50% of the difference between your highest balance in years 3–4 and your highest balance in years 1–2.

Let’s look at some scenarios:

Max Saver (saves £50/month)
- Two years = £1,200 → Bonus = £600.
- Four years = £2,400 → Additional bonus = £600.
- Total bonus = £1,200.
Moderate Saver (saves £30/month)
- Two years = £720 → Bonus = £360.
- Four years = £1,440 → Additional bonus = £360.
- Total bonus = £720.
Small Saver (saves £10/month)
- Two years = £240 → Bonus = £120.
- Four years = £480 → Additional bonus = £120.
- Total bonus = £240.

Even if you can’t hit the maximum, the scheme ensures you get 50% back on whatever you manage to save.

Step-by-Step: How to Apply for DWP Confirms £1,200 Bonus for Universal Credit Claimants

The application process is intentionally simple:

Visit the official GOV.UK Help to Save page.
Sign in using your Government Gateway account. If you don’t have one, you can create it in minutes.
Confirm your eligibility and open your Help to Save account, managed securely by NS&I.
Start saving monthly. Payments can be made via debit card, standing order, or bank transfer.
Track your account online or through the HMRC app.

Case Studies: How Families Use the Bonus

Sarah, 29, single mother of two: Saved £50/month, building £2,400 savings. Received £1,200 bonus. Used £1,500 to buy a reliable car for school runs and kept £2,100 as an emergency fund.
David, 41, warehouse worker: Could only afford £15/month. Over four years saved £720, bonus £360. Used it to pay down high-interest credit card debt, saving money on interest charges.
Priya and Ahmed, couple in Birmingham: Both opened accounts, saving £25 each per month. Together built £2,400 in savings plus £1,200 in bonuses, giving them £3,600 for a deposit on a rented flat.

These examples show that even small savers benefit meaningfully, and couples can double their advantage.

How Does Help to Save Compare to Other Schemes?

Cash ISAs: Good for tax-free savings, but interest rates rarely exceed 4–5% in 2025. Saving £50/month would earn less than £60 in interest annually.
Lifetime ISAs (LISA): Attractive for first-time buyers with a 25% bonus, but strict withdrawal rules and penalties if used for other purposes.
Workplace Pensions: Great for long-term retirement planning with employer contributions, but funds are locked until at least age 55 (rising to 57 in 2028).
Help to Save: Delivers a guaranteed 50% return within two to four years, tax-free, with flexible access to your money.

Uptake and Impact

According to HMRC, by 2024:

Over 500,000 accounts had been opened.
Savers had collectively deposited over £200 million.
More than £150 million in bonuses had already been paid.

A study by the Behavioural Insights Team found that many participants who completed the scheme went on to continue saving elsewhere, proving that it builds long-term habits.

Challenges and Criticism

Despite its success, the scheme has faced criticism:

Savings Cap: The £50/month cap means you can’t save larger sums for bigger bonuses. Critics argue this limits its usefulness for households who could save more.
Temporary Nature: Currently due to close in April 2027. Many charities and think tanks are calling for it to become permanent.
Limited Awareness: Surveys show that nearly half of eligible claimants have never heard of Help to Save, meaning many miss out.

Practical Tips to Maximize the Bonus

Automate deposits: Set up a standing order of at least £10/month to build consistency.
Save windfalls: Tax refunds, holiday bonuses, or extra income can be deposited directly.
Don’t withdraw unnecessarily: Withdrawals lower your “highest balance,” which reduces your bonus.
Use bonuses strategically: Apply them toward debt repayment, an emergency fund, or long-term savings.

Broader Context: Financial Resilience in the UK

Financial resilience remains a challenge for millions. According to the Money and Pensions Service, about 11.5 million UK adults have less than £100 in savings. This leaves households vulnerable to debt traps.

Help to Save is the government’s way of boosting resilience. In international comparison, the UK is offering a program more generous than US equivalents like the Saver’s Credit, which offers up to a 50% tax credit but is less accessible to very low earners.