If you’re a claimant of Universal Credit in the UK, there’s important news that could mean a financial boost in your pocket. The Department for Work and Pensions (DWP) has rolled out a scheme offering Universal Credit recipients the chance to receive up to a £1,200 bonus. This article explains who qualifies, how the bonus works, practical steps to apply, and what this means for those navigating the benefits system today.
Understanding this opportunity can help ensure you don’t miss out on valuable support, whether you’re just starting to claim Universal Credit or have been receiving it for some time.
Universal Credit Claimants Could Receive £1,200 Bonus From DWP
| Feature | Details |
|---|---|
| Bonus Amount | Up to £1,200 |
| Eligibility | Universal Credit claimants who save monthly or were underpaid via legacy benefit migration |
| How to Get the Bonus | Through Help to Save scheme or DWP one-off arrears payment |
| Savings Requirement | Save between £1 and £50 per month for up to 4 years for Help to Save bonus |
| Application Requirement | Help to Save needs active sign-up; arrears payment automatic |
The £1,200 bonus for Universal Credit claimants represents a meaningful financial advantage, whether through the Help to Save scheme encouraging regular saving or the one-off back payment correcting past benefit errors. By understanding eligibility, taking practical steps, and staying informed, claimants can maximize their benefits and build financial security. This government initiative reflects ongoing efforts to support working families and vulnerable populations, helping them prepare for the future with a little extra financial confidence.
What Is the Universal Credit £1,200 Bonus?
There are two main routes through which Universal Credit claimants can receive a £1,200 bonus:
- Help to Save Scheme Bonus: This is a government saving initiative that offers a generous bonus on money saved monthly by claimants. The government offers a 50% bonus on your savings, up to £1,200 over four years.
- DWP Back Payment (Arrears) Bonus: This is a one-off payment to compensate for any money lost through previous underpayments when claimants were transferred from legacy benefits (like ESA or Income Support) to Universal Credit. This is automatic and requires no application.
Understanding the Help to Save Scheme
What Is Help to Save?
The Help to Save scheme is a government initiative designed to encourage people on low incomes, including Universal Credit claimants, to save money regularly. This program rewards savers by adding a bonus equal to 50% of their savings—meaning for every £1 saved, the government adds 50p.
The scheme is aimed at giving families and individuals a financial cushion and promoting good saving habits.
Who Can Join?
To qualify for the Help to Save account as a Universal Credit claimant, you must:
- Be receiving Universal Credit.
- Have earned at least £1 in your most recent assessment period for Universal Credit (as of April 2025, the minimum earning requirement was removed to make it easier to qualify).
- Be a UK resident.
How Much Can You Save?
- You can save between £1 and £50 each month.
- The bonus is calculated on the highest balance in your account at the end of each year.
- You can save for up to four years.
- If you save the maximum amount (£50/month), you can earn a bonus of £1,200 in total (two bonus payments of £600 each after years two and four).
How Does It Work?
- After two years of saving, the government pays the first bonus.
- After four years, you get a second bonus based on your savings.
- You can withdraw money anytime, but withdrawing may affect the bonus calculation.
How to Apply?
Interested Universal Credit claimants must actively apply for a Help to Save account online via the official government website or the HMRC app. Setting up the account takes minutes, and you can manage your savings digitally.
DWP One-off Arrears Payment
This £1,200 back payment is different from the Help to Save bonus. It relates to compensation for claimants who:
- Were transferred from older legacy benefits to Universal Credit between 2011 and 2019.
- Were underpaid due to errors in the transition process.
The DWP is directly contacting eligible claimants, and the payment is automatic—claimants do not need to apply. This is a one-time payment expected to roll out through 2025.
Step-by-Step Guide to Qualifying and Claiming the £1,200 Bonus
Step 1: Check Your Eligibility
- Verify you are currently a Universal Credit claimant.
- For Help to Save eligibility, check if you have earned at least £1 in your last assessment period or confirm eligibility despite the removal of this rule.
- For arrears payment, check if you were transferred from legacy benefits between 2011 and 2019 and may have faced underpayments.
Step 2: Apply for Help to Save (If Eligible)
- Visit the official Help to Save page on GOV.UK or download the HMRC app.
- Register using your personal and banking details.
- Start saving monthly (choose any amount between £1 and £50).
Step 3: Track Your Savings and Bonuses
- Monitor your account online or via the app.
- Remember: The government tops up your savings with a 50% bonus twice over four years.
- Avoid withdrawing money if you want to maximize your bonus payments.
Step 4: Look Out for Communication from DWP (for Arrears)
- For the arrears payment, the DWP will contact eligible claimants directly via post or online account messages.
- No application is needed, but keep your contact details up to date with the DWP.
Step 5: Maintain Your Universal Credit Claim
- Report changes in your circumstances promptly to avoid interruptions in payments.
- Stay updated on any policy changes via the official GOV.UK Universal Credit page.
Practical Advice and Examples
Imagine you receive Universal Credit and decide to save £50 a month through Help to Save:
- After 1 year, you have saved £600.
- At the end of year 2, the government pays you a 50% bonus: £300.
- If you keep saving for 2 more years, at the end of year 4, you will receive another £300 from the government.
- Total savings plus bonus after 4 years: £1,800 (your £1,200 savings + £600 bonus).
Another example: Jane, who was transitioned from ESA to Universal Credit in 2017, was underpaid due to administrative errors. In 2025, she receives a one-time arrears payment from DWP for £1,200, directly into her bank account, with no action needed on her part.
DWP Stops Over £1 Billion in Wrong Universal Credit Payments – What This Means for Claimants
FAQs About Universal Credit Claimants Could Receive £1,200 Bonus From DWP
What if I already have a Help to Save account?
You can continue saving and earning bonuses up to £1,200 in total. There is no need to reapply.
Can I withdraw money anytime?
Yes, but withdrawing may affect your bonus payments because bonuses are based on the highest balance during the period.
How will I know if I qualify for the arrears payment?
The DWP will contact you directly if you qualify. Keep your contact details updated to avoid missing notifications.
Is the Help to Save bonus taxable?
No, the bonus is not considered taxable income.
Can I apply if I am not currently working?
Yes, as long as you are receiving Universal Credit. Recent changes removed the minimum earnings requirement to join Help to Save.
