Poor thrown to the loansharks
MP warns some banks refuse to accept Universal Credit as income
PEOPLE on Universal Credit are being forced to use loansharks because some banks will not accept the benefit as part of their income.
SNP MP Dr Philippa Whitford has warned constituents are finding banks and building societies are turning down applicants for mortgages and loans.
Whitford said: “Some banks have been advised not to lend against UC. This income may not be counted against a mortgage or loans and could drive people into the hands of payday lenders and loansharks.”
The Central Ayrshire MP said banks don’t accept UC as income because payments vary for claimants or because banking accounts cannot cope with the benefit’s online delivery system.
Whitford said: “While some people might be surprised that someone on UC is looking for a mortgage, there are many working people in receipt of working tax credits or child tax credits which are now delivered through UC.
“The trouble is that there is no written DWP letter giving the detailed breakdown of some components of UC, therefore banks are not accepting any of it.”
She added: “The other issue raised by a local bank was that some have been advised by their risk departments not to count any of it due to the way it varies month to month.
“I have written to some banks in Scotland on this issue because if it is a loan rather than a mortgage, a refusal could inevitably drive them into the hands of payday loan companies.”