Author Lauren Howells

“Thousands more households” could be in danger of losing their homes, according to This is Money article

A report by UK Finance, which says that it has seen, reportedly warns that more people who find themselves unemployed or are unable to work due to illness could find that they will be “in danger of losing their homes” next year. 

This, the article goes on to explain, is due to the switch to universal credit from tax credits and the fact that the currently free benefit ‘Support for mortgage interest’ (SMI) will be turned into a loan from April 2018, which people will have to pay back, with interest. says report it has exclusively seen argues that SMI is “critical for struggling homeowners”

According to, the report that it has seen argues that SMI is “critical for struggling homeowners” and that it is “inevitable” that people who “fall behind on their mortgages will be evicted”, due to SMI and tax credits being axed at the same time.  

The article went on to say that there were already “warning signs” that the loss of SMI was “spooking” mortgage lenders, citing a lady who had contacted them to tell them that her mortgage lender had threatened her with eviction, reportedly saying that “part of the issue” was the “withdrawal of SMI”. added that according to the UK Finance report it had seen, there would be “little incentive for lenders not to evict struggling borrowers” when SMI is no longer there.

“Thousands more households” could be in danger of losing their homes, according to This is Money article

SMI change will affect tens of thousands of people

An article in the Guardian, mentions that critics are saying that the change to SMI means that tens of thousands of people, many of whom are pensioners, will end up with what essentially is akin to a mortgage, on top of their existing home loan.

First introduced in 1948, SMI was designed as a means of short-term help for those on certain benefits, to pay towards interest on their mortgage in order to prevent repossession.

The government say that back in 1948, it was very unusual for people to take mortgages into retirement but now “almost half of SMI recipients are pensioners, many of whom are likely to receive SMI for significant periods into their retirement.”

A paper prepared by the Department for Work and Pensions revealed that there are currently an estimated 124,000 people receiving SMI. Around 48% of these are working age and 52% are pension age.

Government has been criticised for the way it has handled the changes 

Back in October, Royal London criticised the way the government was administering the SMI change, saying that some people would “find the process too daunting and will lose their mortgage help next April, with a risk of repossession”. It asked the government to ensure that those who were unable to pay for regulated financial advice about their options were “given adequate support so they can make the right decision for them.”