Social fund Crisis Loans to charge 27% interest

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

Right because this interests me, and I think it is a good idea for the government to provide budgeting loans for people on low incomes as well as those on beenfits to keep them away from the sharks, although don't agree with charging interest on crisis loans, am going to post up links to the responses to the government consultation documents.


CONSULTATION HERE - http://www.dwp.gov.uk/consultations/...w-approach.pdf

FEASIBILITY STUDY - http://www.dwp.gov.uk/resourcecentre...-doc-nov08.pdf


RESPONSES:

Homeless.org - WORD DOC - http://www.homeless.org.uk/policyand...ns/socialfund/

Disability Alliance = Disability Alliance UK response - R62: Response to the Social Fund: A new approach

JOSEPH ROWNTREE FOUNDATION - http://www.jrf.org.uk/knowledge/resp...ocial-fund.pdf

CITIZENS ADVICE - The Social Fund: A new approach


CarersUK - http://www.carersuk.org/Policyandpra...nsultation.pdf


A minimum income standard for Britain: what people think

[righty]

Re: Social fund Crisis Loans to charge 27% interest

I'm sorry I find it disgraceful that the poor should be charged % for hardship loans & the guide for that % being that charged by the likes of Provident which can exeed 1,000%pa
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Also make no mistake about it claimants will be directed to take these % bearing loans rather than the interest free ones & we'll be told the % helps fund more loans

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

Well my understanding of it is, from the statements made by Kitty and co after the furore was that budgeting loans would be interest bearing, but community grants and crisis loans would remain interest free.

Also although budgeting loans would then become commercial and profit making they wouldn't be privatised, just contracted out to be run by someone like the credit unions or post office on the governments behalf.

I agree people who previously may have got budgeting loans on interest free may lose out and have to pay interest, however the crisis loans would still be free and available for those in immediate need.

The 26% was based on what the credit unions charge on their loans according to KMPG.

I would like to see budgeting loans opened up to those not on benefits and on low incomes or suffering hardship. At the moment only being allowed to access these loans if you are on benefits keeps a lot of people in hardship in the market for these 1000% type loans, as credit ratings etc are too poor to get sensible rate loans quickly. Maybe theres the possibility of keeping the interest free for people on benefits in full or part, and a grading system according to income, but then that would be penalising the better off so swings and roundabouts.

Actually would be interesting to see the stats on things like provvy loans and loan sharks , that would possibly shift over to the governments budgeting loan. I expect they have surveyed it somewhere.

[righty]

Re: Social fund Crisis Loans to charge 27% interest

The point I'm making is that applicants WILL be directed to this new facilities rather than the free crisis loans & as I understand it 26% is not what the CU's charge. My understanding is that it's much less

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

Yes I am sure that would happen in a lot of cases and access to crisis loans may reduce. Crisis loans as difficult at the moment - councils seem to have a specific budget and once its gone its gone. So strengthening the requirements to get one may be actually an improvement.

Wonder if the credit unions have responded to the consultation publicly actually.

the trouble with credit unions is they are quite inaccessible to many people, an issue which I know they are working on, and possibly another concern is the effect this may have on them.

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

so now they binned that idea, we're back to this situation

Sub-prime borrowers turn to loan sharks

Crisis Loans, a source of emergency funds provided by the Government through the Job Centre network, has seen the number of applications rise from 1.4 million in 2007 to 2.1 million last year. However, it was forced to turn down a record 596,000 applications in 2008, up from 316,000 the year before.

Figures from the Department for Communities and Local Government show that more than 165,000 of the poorest households already use unregulated money lenders.


Borrowers who are forced to turn to loan sharks are also at risk of intimidation and violance, according to the report, which cited the case of loan shark who was convicted earlier this year of raping a customer who was unable to repay her loan on time.



To quote me

I would like to see budgeting loans opened up to those not on benefits and on low incomes or suffering hardship. At the moment only being allowed to access these loans if you are on benefits keeps a lot of people in hardship in the market for these 1000% type loans, as credit ratings etc are too poor to get sensible rate loans quickly.

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

updating Links

• The Social Fund: A new approach (2MB)
• Government response to The Social Fund: A new approach (113KB) (23/02/09)

[righty]

Re: Social fund Crisis Loans to charge 27% interest

Dam disgrace charging the desperate 27% to live. Now we know why the politicians are happy for the banks to be usury they're no better

[Amethyst]

Re: Social fund Crisis Loans to charge 27% interest

Just a nudge regarding the huge upsurge in payday lending since 2010.... related ?????

[Tools]

Re: Social fund Crisis Loans to charge 27% interest

100%

[meellis]

Re: Social fund Crisis Loans to charge 27% interest

I have only just read this thread and it is indicative to all the governments and the spin involved in modern Britain. They all want to make things available but they do things deep within them to make people not take them up. They have done this with a lot of the green incentives, they come out with a big fanfare about what they have made available and say that nobody takes up the schemes. Truth is they don't shout about the hidden costs and red tape involved when people apply, which is solely there to discourage people from enrolling in the schemes.

[des8]

Re: Social fund Crisis Loans to charge 27% interest

Crisis loans are no longer available.

If you require emergency help in WALES there is available EMERGENCY ASSISTANCE PAYMENTS and INDIVIDUAL ASSISTANCE PAYMENTS (if you qualify). These payments do not have to be repaid. They are made from the DISCRETIONARY ASSISTANCE FUND in WALES, which replaces parts of the Social Fund and Community Care Fund.

In ENGLAND I believe one has to apply to local council for assistance.
In SCOTLAND applications to Scottish Welfare Fund.
I don't know what repayment terms, if any, apply in England and Scotland

[Kevmc]

Re: Social fund Crisis Loans to charge 27% interest

Scotland it is a grant in cash form. England doesn't give cash. Sends people to food banks, council tops up gas/ electric cards. No cash is given.