HearFromYourMP

Previous message | Messages for this constituency

MP's Concerns Over Universal Credit Roll-Out

Posted by Stewart Hosie, MP for Dundee East, at 12:28, Mon 18 February 2013:

New figures show that an estimated 3,345 households in Dundee do not use a bank account and Dundee East MP Stewart Hosie is concerned that people who are ‘unbanked’ will suffer as a result of the UK Government’s Universal Credit plans.

Stewart said: "The figures show that 79% of those unbanked (those without a bank account) live in social housing, which suggests 2,643 social rented households in Dundee are unbanked; 12.4% of social rented households in Dundee – a not insubstantial figure.

“Many are older people who have long-established habits relating to management of their finances in cash.

“The UK Government’s attempts to bring in Universal Credit in October overlooks the problem that some people do not have access to or do not choose to access a bank account.

“Under Universal Credit, a range of existing benefits will be combined into a single monthly payment, which will go to the claimant.

“Many landlords are concerned the changes will make it harder for tenants on benefits to manage their income and the DWP is leaving the way that Universal Credit will be paid out up to the financial market, effectively washing their hands of the problem.

“They have said they are looking for a range of diverse providers that might include high street banks, mobile phone operators and pre-pay card providers as well as pay point.

“I am very concerned that this will lead to more people falling into arrears and debt, particularly among the vulnerable and those without a bank account.

“People receiving benefits and pensions through pay point, most often used in post offices, are already known to the DWP so I have been trying to get them to accept that evidence of entitlement to benefits could be enough to satisfy a high street bank, some of whom are owned by the taxpayer.

“To have pay point usable only by full withdrawal each time would mean vulnerable people going about with tons of loose cash and perhaps being tempted to overspend and thereby not meeting their obligations.

“It could also mean pay points in shops having to store massive extra amounts of cash, leading to maybe burglaries or muggings.

“At the moment, none of these issues are satisfactorily resolved and are a source of concern.

“It seems to me that a tie-up between the DWP and high street banks to improve access to the banking system for those who presently do not have a bank account could help people receiving Universal Credit to better manage their finances.”