Royal London has stated that figures buried on page 210 of a report published on the date of the Spring Statement reveal “catastrophically low numbers” have opted into a scheme to stop their mortgage benefit help being cut off in April.
With less than a month until the new system is implemented Royal London has renewed its call for government to delay changes to Support for Mortgage Interest (SMI).
Figures contained within the Office for Budget Responsibility’s Economic and Fiscal Outlook said that while all current claimants had been contacted regarding the change only around 10,000 claimants have so far agreed to take up the loan. According to the document this is “90 per cent short of the 100,000 expected by the end of 2018/2019.”
Royal London said the figures show “remarkably little progress” has been made since a Freedom of Information request from the insurer dated 22 January 2018 showed 6,850 people had taken up the loan offer. Those who don’t take up the loan will lose their mortgage support from April.
Helen Morrissey, personal finance specialist at Royal London, said: “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 to SMI have drawn criticism since they were announced in the 2015 Budget. Research carried out by IPSOS MORI on behalf of the Department for Work and Pensions in August 2017 showed concern among SMI claimants with 44% of claimants saying they would cut back on essential spending to meet their mortgage interest payments rather than take on a loan.