Council to Partner with Credit Union on Universal Credit

Wandsworth Council has agreed to enter into partnership with a credit union to help its residents cope with Universal Credit.  The flagship Conservative council is exploring the possibility of offering new financial services - including 'jam jar' type accounts - to help people manage their budgets under the new benefits system.  The council believes providing financial support services could help many claimants adjust to the changes – and prevent them turning to loan sharks or payday loan companies should they struggle to adapt to the new system.  Read more on the Wandsworth Council website.

Credit Union in First National Tie-Up

More than 160,000 social tenants are set to be the first to get a financial kick-start following the Government's relaxation of "common bond" geographic credit union rules.  The national housing association Affinity Sutton will offer its residents the opportunity to join Leeds City Credit Union, giving many of them access to basic financial services for the first time. The residents will be offered a range of online and phone-based services, including "jam jar" budgeting accounts, savings and low cost loans. Read more on the Independent website.

Freud: UC Switch Will Be Simple For Most – But We Must Prepare Early

The early findings from the DWP Direct Payment Demonstration Projects reveal 54 per cent of tenants surveyed said they were confident receiving their Housing Benefit payment directly to their own bank account.  This shows projects are starting with a good foundation but more work is needed to get tenants ready.  Minister for Welfare Reform Lord Freud said "These findings show most people on low incomes manage their money well and for most tenants the switch to direct payments under Universal Credit will be straightforward.”  So far the key lessons for social housing providers include:

    *Social landlords need to contact and work with tenants early

    *Tenants prefer a range of payment options to take control of the budgets

    *Most tenants prioritise the payment of their rent but some could imagine a situation when their housing benefit could be spent to cover unexpected expenses.

    *People on low incomes often budget on a fortnightly or weekly basis.

    *Accounts that allow customers to separate several 'pots' of money are likely to be helpful.

    *Close working between local authority housing benefit departments and landlords has been crucial for effective implementation.

The Projects are also helping to identify tenants at risk who may not be suitable for direct payments at the start. Read more on the DWP website.

Minister Announces £145m Fund to Boost Financial Inclusion

Government minister Lord Freud has announced a £145m fund to develop and subsidise financial inclusion schemes as part of the introduction of Universal Credit.  He confirmed that the government has approached the financial community to develop products like jam jar accounts to help people budget under the single payment system. Freud called Universal Credit a "social revolution" and emphasised the opportunity to improve financial inclusion among the population, brought about by direct payments to households, not landlords. Freud said that ministers are keen to avoid bracketing people as "vulnerable". Instead he said the government wants to segment people into groups, from those who need little support to move from the current system to Universal Credit, to those who will be unable to change without significant assistance.  Read more on the Guardian website.  

Jury Out On State-Sponsored Bank Accounts for Universal Credit

Housing associations have given a cautious welcome to Government plans to subsidise for a year bank accounts that would help claimants manage monthly payments under Universal Credit.  The DWP is set to appoint one or more payment suppliers to offer jam jar-style accounts – which allow people to split their benefit into separate pots for spending, saving and bill payments – that would be offered when claimants sign on to Universal Credit.  The theory being that from October next year, new Universal Credit claimants will have their circumstances assessed by the DWP and, if necessary, will be offered special “budgeting” accounts. Those offered the accounts will be those for example exposed to debt and who feel unable to manage monthly payments. Those without bank accounts but who feel confident to manage monthly payments could be sign-posted to a basic bank account.  Read more on 24dash.