01142747576 bestadvice@knowleswarwick.com

Replacing the SMI and introducing a "second mortgage" scheme

5th February 2018

By Kate Brown

Replacing the SMI - Knowles Warwick

 

The “support for mortgage interest” (SMI) has helped homeowners who are facing financial difficulties pay their mortgage. Introduced after the Second World War in 1948, this scheme allowed for those unemployed or suffering from illness to get back on their feet.

 

From April 2018 the SMI will be replaced with a more controversial system, the state-backed loan, which offer loans that will be repaid with interest at a later date. This plan for change occurred after the government argued that the SMI was unsustainable and costs the state £205 million a year.

 

Out of the 124,000 households that are currently receiving the SMI benefit, figures show that 6,850 have signed up for the new scheme. Critics claim that the replacement of the SMI will result in tens of thousands of people being lumbered with a second mortgage, many of which will be pensioners. According to the Department of Work and Pensions (DWP), information regarding the changes were sent out from July 2017 however not all claimants have been contacted.

 

The government have been called on to delay the changes until more information is provided to all claimants. A spokeswoman from Royal London, Helen Morrissey, stated “It is truly shocking that many thousands of low-income families are yet to receive the information they need on the fact that their mortgage interest help could be switched off in just ten weeks”.

 

If you’d like to talk to us about any of the information discussed, feel free to get in touch with us.

 

Related Articles:

Mortgage Approvals Hit Near Five Year Low

How Far Would Your Savings Go

Could Wonga Be No Longer

 

 

 

Replacing the SMI - Knowles Warwick

Knowles Warwick Financial Services button

Click here for the Quickbooks website Xero Online Accounting Software Gold partner ICAEW Chartered Accountant B1G1 Business for Good Click here for the ACCA website Connect Yorkshire Free Index  Sheffield Chamber of Commerce Click here for the Caunce O'Hara website

Knowles Warwick Financial Services Limited is authorised and regulated by the Financial Conduct Authority (in respect of regulated investment, insurance and mortgage business). For regulated financial services, the Financial Ombudsman Service is the alternative dispute resolution provider.