Recent figures published in a report on the same day as the Spring Statement reveal “catastrophically low” numbers have opted into a scheme to prevent their support for mortgage interest (SMI) benefit being cut off in April.
The new system is due to be implemented in less than a month and Royal London has renewed its call for government to delay changes to the SMI.
According to the figures contained within the Office for Budget Responsibility’s Economic and Fiscal Outlook, 100,000 claimants had been contacted with regards to the change, but approximately 10,000 have agreed to take up the loan. The document says this “90 per cent short of the 100,000 expected by the end of 2018/19”.
These figures illustrate that “remarkably” little progress has been made since Royal London submitted a Freedom of Information request in February, when 6,850 people had taken up the loan offer. Those who don’t take advantage of the offer will lose their mortgage support from April.
Royal London personal finance specialist Helen Morrissey commented: “These latest figures make for concerning reading because as it currently stands around 100,000 people will lose their mortgage support in less than a month’s time. While it is reasonable to suggest that some of these claimants may have made alternative arrangements to meet their mortgage interest payments there is a strong possibility that many of these people won’t and face a nasty shock come April.
“SMI claimants are among some of the most vulnerable people in society and government must do more to help them understand the changes and what it might mean for them. If not we could see people struggle to meet their mortgage payments. We would urge government to delay the implementation of these changes to ensure people have enough time and support to make an informed decision.”
The changes being made to SMI have received multiple criticisms since the announcement in the 2015 budget.
IPSOS MORI conducted research on behalf of the Department for Work and Pensions in August 2017 and found that, among SMI claimants, 44% of them said that they would “cut back” on essential spending to meet their mortgage payments rather than taking a loan.
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