View more on these topics

Think tank calls on Govt to extend mortgage support for unemployed

A think tank has called for state mortgage support for the unemployed to be extended to include those who have paid enough national insurance contributions.

Currently those out of work can claim £72.40 a week in job seeker’s allowance for six months on the basis of having paid enough NICs. If someone has not paid enough in, or once the sixth months is up, then the benefit is means-tested.

As it stands people on means-tested job seeker’s allowance are eligible for the Government’s Support for Mortgage Interest scheme. Those who qualify get help paying the interest on up to £200,000 of their loans or mortgages, while pensioners qualify on up to £100,000. The money is paid directly to the lender at a standard rate of 3.63 per cent.

In a report, published yesterday, the Institute for Public Policy Research says the amount paid in job seeker’s allowance based on NICs should go up from £72.40 to £100.15 and include access to SMI.

Those on benefits must wait 13 weeks before they can claim SMI. Under the proposal long-term unemployed would receive SMI for an extra 13 weeks.

The IPPR says: “The current average SMI award for those on income-based JSA is £50 a week, and around 30 per cent of those on contribution-based JSA are homeowners with a mortgage.

”Assuming the current 13-week waiting period applies, and that all those who became newly entitled claimed support at the average amount for the full remaining 13 weeks, the extra cost would be just over £150m a year. In practice, many contribution-based JSA claims cease inside the 13-week waiting period.”

The total cost of the plans to increase the amount paid in job seeker’s allowance and providing extra access to the mortgage support scheme would cost £400m.  

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Not really a god idea in the long term

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com