I hate to criticise Citizens Advice, but frankly the idea of returning to the pre 1996 idea of paying the actual mortgage interest rate is crackers. Don't you remember how it was? Thousands and thousands of huge overpayments were generated in the early 1990s when in the space of about 2 years typical variable interest rates fell from about 14% to 7% and people simply assumed the DWP knew. Tribunals never dealt with anything else.
People were frequently being paid twice the amount of benefit they should have been. Interest rates were fluctuating from month to month at it was a full time job just keeping track of them! All that was got rid of at a stroke with the standard mortgage interest rate, one of the best benefit ideas since benefits and probably the best example of benefits simplification EVER..
Fine, go ahead with this if you don't mind that people with variable rate mortgages will STILL never ever be getting the right amount of interest paid, simply because the system can't keep pace with the rate of change, and are likely sooner or later to end up being overpaid and having to repay it. The standard interest rate may be rough justice, but it is (a) cheap (b) quick and (c) certain, and it almost NEVER creates overpayments.
Rant over.

I have to agree with you Ariadne. I work with Citizens Advice Scotland now, and for my sins many years ago work at the old style "Social". I remember the nightmare of cases with mortgages trying to keep them correctly assessed with in periods of constantly changing Lender Rates. The system was awash with overpayments and underpayments.

The Standard Interest Rate was one of the best changes ever to be introduced.