Universal credit earned income condition substituted

The Help-to-Save Accounts Regulations 2025 (S.I. 2025/327) substituted regulation 3(3)(b) and omitted regulation 3(6)(d) of The Help-to-Save Accounts Regulations 2018, with effect from 6 April 2025¹. The 2018 regulations were made on 24 January 2018 and came into force on 25 January 2018¹.

Regulation 3 sets out the conditions for meeting the first and second benefit entitlement conditions for a Help to Save account. The substituted regulation 3(3)(b) now reads that the individual "has earned income in the assessment period immediately preceding the first eligibility reference date equal to or greater than £1"¹. The previous wording of that provision is not reproduced in the revised text.

The Universal Credit route sits alongside the Working Tax Credit routes in the same regulation. Condition 1 is that the individual "has a current award validly obtained of working tax credit (not being at a nil rate) under section 14 of the Tax Credits Act", and Condition 2 covers a nil rate working tax credit award held with child tax credit at a rate other than nil¹. Regulation 3(4) provides that a benefit entitlement condition "is to be treated as met on any day if it would have been met but for an error or delay on the part of HMRC"¹.

The 2018 regulations also set the account terms. The minimum amount that can be paid in is £1, or such smaller amount as an authorised account provider agrees, and the maximum monthly amount must not be exceeded¹. There is no restriction on the maximum or minimum amount, or on the timing, of withdrawals, and no requirement to maintain a minimum credit balance, so an account with a nil balance is not automatically closed¹. The account is denominated in sterling and the provider has no right of charge, lien, set-off, mortgage or other security against the money in it¹.

The bonus is calculated with "A is the number of whole pounds in the qualifying balance of the account, and B is 50 pence"¹. The first bonus period ends 24 months after the month the account is opened, or earlier at the end of the maturity period¹. For a bonus paid at the end of the first bonus period, or at the end of the maturity period if earlier, the qualifying balance is the highest balance achieved in that period¹. For a bonus paid at the end of the maturity period if later, it is the highest balance achieved after the first bonus period, less the highest balance achieved in the first bonus period¹.

Why it matters for households

The change affects the test applied to Universal Credit claimants for a Help to Save account, and it took effect on 6 April 2025¹. The condition now turns on earned income in the assessment period immediately preceding the first eligibility reference date being equal to or greater than £1¹. Because the amendment is recorded as a substitution of regulation 3(3)(b) and an omission of regulation 3(6)(d), the practical effect depends on the wording that applied before 6 April 2025, which is not set out in the revised text¹.

The wider account rules are unchanged in the text: a nil balance does not close the account, withdrawals are not restricted, and the minimum payment is £1¹. The £300 penalty for failing to tell the provider about absence from the United Kingdom within 14 days, and the treatment of benefit entitlement as met where HMRC has erred or delayed, remain in the regulations¹.

What happens next

The amendment is recorded as in force from 6 April 2025¹. No further commencement dates or transitional provisions are set out in the revised text¹.