Will Universal Credit create a boom in “Doorstep Lending”?

When Universal Credit comes into full force next year “doorstep loan” and “payday loan” companies could benefit from changes to the current welfare system.

Under current rules people who meet a certain criteria can make a claim for a “crisis loan” or a ” budgeting loan” from the social fund. Under Universal Credit these loans will be ABOLISHED and replaced with payments on account. These payments on account will be available to Universal Credit users but with a much more stringent criteria for applicants.

Social observers feel that this may cause people who are already in dire financial straits to go and search for quick fix high cost doorstep loans to bridge a financial crisis in their household.

Should crisis loans be abolished? What are your views on these potentially devastating changes to the welfare emergency  loan system?

 

One Comment

  1. chris says:

    Combined with monthly direct payments including housing benefit direct to tenants this will be disastrous. Northern Ireland has got the right idea. Can we afford the extra cost of paying housing benefit to tenants directly?

    Reply

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