On 23 March the DWP published the statistics as at 21 March on the switch from paying Support for Mortgage Interest (SMI) as a benefit to giving it as a secured loan showing:
- how many people getting SMI have been contacted by letter and phone ;
- what the people who have been successfully contacted are choosing to do – take the loan, decline the loan or are currently undecided.
UPDATE: see SMI watch – 24 April – slow progress & statistics problems for the next set of statistics.
No real progress has been made
I said two weeks ago in DWP chaos? Only 10,000 have agreed to new SMI loan that the take-up rate was extremely low and the decline and no contact rates worryingly high.
Kit Malthouse, the DWP Minister whose brief includes SMI, said on Moneybox last week, that the numbers were changing as more people are signing up with the deadline approaching.
So, with less than two weeks to go before the change happens, it is good that the DWP is publishing detailed statistics, showing numbers for 14 March and the 21 March.
However, there doesn’t appear to have been any significant progress made between these dates as the table below shows – the table comes from the DWP link but the highlights are mine.
There are now 13,000 who have said they will accept the loan, but no progress has been made with the very large number of people who have not been successfully contacted by phone.
The small drop in overall numbers is probably partly caused by a reduction in the number of people claiming JSA and partly by it being discovered that a few people getting SMI at the moment are no longer eligible. UPDATE actually these numbers are simply wrong! See the latest statistics for an explanation of the low total claimant count.
Why is it so hard to contact people?
I don’t think it’s surprising that the DWP’s contact strategy appears to be failing.
There is the obvious problem that the DWP may not have an up-to-date phone number for claimants.
It is often hard to engage with vulnerable people under financial stress. SMI is not a generous benefit – it will not cover all the mortgage payments for most recipients and many will be struggling to pay the shortfall from means-tested benefits. Many will already have some mortgage arrears.
Many people getting SMI are pensioners and many of them may have a standard anti-scam policy of not answering the phone to people they do not know. The DWP has made this even harder by employing Serco to make these calls.
This needs another 6 months
Last week I suggested that the DWP:
- should postpone the start date by 6 months.
- should improve its communications so they are simpler, clearer and try to answer the many questions people have;
- consider making the SMI loan interest free. This would remove a lot of the suspicion people have about “paying interest on interest”.
I think the latest figures support the need for these three changes. The DWP needs to not only contact the 40% where no successful contact has so far been made, but get back in touch with the 27,000 who have said they do not want the new loan – for many of them this will have been a poor decision.
Are you trying to decide about the new loan?
If you are currently getting SMI and you are trying to decide what to do, read SMI will be a loan from April – should you agree to this?
And it’s good news that if you told Serco you don’t want the loan, you can change your mind. See SMI – what happens if you haven’t agreed to take the loan?
Laurel Ellis says
I have been contacted and I have decided to decline the “offer”. It is a cut in a benefit to a very vulnerable group who will have few resources and already improverished. Despite this many will be people who have put in a great deal of investment in their property, and therefore will stand to lose out on investment that they have made in good faith in the past. Many will have already taken on a new mortgage product before being contcated by the outsourced company. To sell in such a short space of time would be unfeasible, and many would not want to lose their home at such a critical time in their lives. The prospect of downsizing later is compromised by the second charge, and there is no indication this “offer” is portable.
This disproportionately affects elderly women and is thus discriminatory. The proposal to place a second charge on the property is unlawful in some circumstances ( shared ownership) and mortgage companies are loathe to agree to a second charge or to be happy with these changes. Mortgage companies and housing associations have not been informed or trained about these changes. The interest rates are based on gilts which is not what mortgage interest is based on. Serco are using call centre staff who have a script to follow and are unable to provide even basic answers to questions. I would like under a Freedom of Information request find put how much the government are paying Serco to deliver this “offer”.
There are very few social housing options for this group of people, and landlords are unwilling to rent out to elderly people whose sole income is a state pension and pension credit. There are also few affordable rental properties in the area where people have been living that would provide an alternative. Lastly is iniquitous, and many landlords are getting their property(ies) paid for by renting out to people on housing benefit. Mortgage interest payments could be made in line with the local housing allowance since housing is in such short supply.
Sara (Debt Camel) says
So you have a better alternative for how to pay your mortgage than taking out the new loan?
Regardless of whether you LIKE the change or not, the important question for you is “what is my best option?”
deni case says
Very well said, Laurel Ellis. As one of the older women on state pension and pension credit, I totally agree with everything you write. This whole move by the government has been very poorly thought out, obviously just a way of clawing in as much money as possible and damn the social consequences for the people involved. However, there is bound to be a knock-on effect of this step in other areas-there always is. I wish the government minister would take on board Debt Camel’s 3 suggestions above. These are, in my opinion, crucial.
Char says
Dear All
This is also affecting many people with learning difficulties/disability who became eligible for this. They can live independently thus making it cheaper for the government than if they had had to put people up in bed and breakfast year in year out or at least that was the reasoning before now. I have been calling DWP regarding the fact that they have not sent any letters out or called my sister and they have been putting me through to other departments each of which denies any knowledge including Serco! I really feel this is a very sly way of cutting people off completely. If you don’t take up the offer you are cut off!!! Thus the least amount of people who sign up for the loan the better for the Government if you see what I mean! A truly underhand way of dealing with the most vulnerable among us. Shocking!
Sylv says
Why aren’t MPs in the same situation? They can claim c£1,250 per month in mortgage interest/rent in London but are not expected to pay it back when they leave office and sell off the property. Surely it should be one rule for all. Anyone know who I can contact to get a petition going and for it to be discussed in parliament?
Sara (Debt Camel) says
don’t start another petition – better to support an existing one.
It is well worth writing to your MP, even if you don’t get a positive reply – MPs don’t like getting this sort of letter.
Sylv says
I did write to my MP who was very non-committal. I pushed and the response took two months. Apparently there wasn’t a vote on the removal of this benefit (a statutory instrument). My response was that nothing was raised in parliament and nothing had hit the press so all political parties and MPs were aware this was going to happen and chose to do nothing about it which to my mind makes them all culpable when it comes to laying the blame.
Be interesting to see what the OBR makes of this low take up and whether it has cost more to implement than the actual cost of SMI.
deni case says
Sylv, you have made some good points, as have others in other threads.. My MP gave the same response. I am holding off right now. It’s all really sickening and yes they are all culpable!
P says
I agree with all the above it is truly underhand and later on possibly illegal I also would like to now how much to implement I am a carer for my wife I also have 2 children also with a charge on our house will we be able to remorgage in a few years I don’t think so we would all be better off in social housing like the houses the landlords rent back to the government sorry for the rant but I have no idea how they have come up with this nightmare