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Support for mortgage interest
they’ve to got to make a very big decision about their future financial security.
That’s not really the case. They certainly shouldn’t be making any snap decisions. The introduction of loans should have no immediate effect on their financial position. The lender will carry on getting the same money in April as they did in March. Long term, there will be effects but they should take time to consider the effects and options.
I’ve done an article about the changes in detail for the next Adviser magazine which is due out soon and it should also be online at The Medium around the same time.
Since SMI loans are not benefits, but rather a financial product, is our advice whether to accept a loan (rather than general information about the loans scheme) crossing into realms of regulated financial advice (even where a client has no real choice but to take out a loan after April), so referral for independent financial advice is a requriement?
Citizens Advice considers this to be the case in its January Benefits Update newsletter. Not sure how claimants will be able to afford to pay for the advice though….
It is very clearly financial advice, we have been instructed at Citizens Advice not to touch it other than the basic info on SMI. The problem is that I suspect loan companies swill be circling like sharks to mop up any claimants who don’t sign up for SMI . also for the huge majority paying for financial advice will not be possible or appropriate. The interest on the loan will continue for ever
Yes, we’ve issued guidance to local I&A services that they can only advise on the benefit implications and must not offer any opinion on what it’s best to do in any particular situation.
It’s a real nightmare quite frankly and we’ve heard scores of stories about people being frustrated, scared and angry about what is happening and their complete inability to be able to get anyone to sit down them and have a meaningful discussion.
it needs some immediate PRESS action, a good scare story or 2 to get the govt to at least make sure any loan companies who think they can muscle in on vulnerable clients are scared off. and some TV advertising to help claimants know whats going on, this could be the big issue for 2018
We took the radical step of asking the FCA.
The FCA said ask the DWP.
The DWP said that in their opinion SMI loans do not fall within FCA regulation.
We took the radical step of asking the FCA.
The FCA said ask the DWP.
Seriously? but that is within the FCA remit!
The DWP said that in their opinion SMI loans do not fall within FCA regulation.
well they would, wouldn’t they…...
New figures have shown that just 6,850 households have signed up for the scheme out of the 124,000 currently receiving the SMI benefit, prompting calls for the changeover to be delayed.
The taxpayer is not expected to pay toward a mortgage, yet its ok to get your mortgage (and more) paid by the taxpayer if you are a landlord letting your property out via Housing benefit?
Its costing 200 million year for SMI, yet we cant afford this?
Hmmm..
The Adviser has just posted my article on SMI online, at https://medium.com/adviser
SMI should be paid from day 1 of a claim and for a maximum time of maybe 12 months. And it should definitely not be a loan. Unemployment can affect anybody at any time. If I lost my job tomorrow, I would be unable to pay the mortgage until I found another job. If I rented, I could have all of my rent paid indefinitely. It does make me wonder why people bother buying their own homes anymore.
Written answer yesterday says -
By the end of February 2018 we will have made written contact with all current claimants of support for mortgage interest (SMI). This initial contact is followed up by a telephone discussion and these are expected to be completed by April 2018. It is possible, in cases where vulnerable claimants require the appointment of a Power of Attorney representative, that this process may not be completed by April. Transitional provisions are in place to ensure that SMI payments can continue in such circumstances.
Written answer provides regional estimates of people on SMI and so affected by SMI loans (and likely to need advice….) - the North West has highest number at 16,000, followed by London, the South East and Scotland, each with 12,000.
meanwhile…. in Northern Ireland, the Department for Communities says 70 per cent of the estimated 9,000 SMI claimants have repsonded to iinitial contact.
https://www.communities-ni.gov.uk/news/reminder-customers-receiving-support-mortgage-interest
meanwhile…. in Northern Ireland, the Department for Communities says 70 per cent of the estimated 9,000 SMI claimants have repsonded to iinitial contact
It doesn’t say what the responses are though.