In less than 3 weeks’ time, the Government stops paying mortgage interest to for those on certain benefits.

Some bright spark at the Department of Work and Pensions came up with a way to save the Government money – by getting a private company, Serco, to operate a loan scheme. Instead of having payments covered by the state, they will be covered by the homeowner taking out a private loan with Serco in return for a charge on the property. That means that they will have to pay back an unspecified sum of money if they eventually sell their house.

The Government is supposed to have contacted everybody who claims benefit under the current system (SMI). They haven’t, though. And they are leaving it a bit late for people to be given informed consent for the change. Only 10,000 people, a tiny proportion of those anticipated, have signed up for the new scheme.  This means that they will end up having to pay their mortgage interest in full.

Today, Vince Cable called on the government to act quickly to protect these vulnerable home owners:

The lack of take-up for this scheme is financially dangerous for tens of thousands of families at a time when personal debt is already mounting.

The scheme must be re-advertised and delayed so that more people sign-up and don’t end up in chronic debt.

Something has clearly gone wrong in the preparation for this change. The very least that should happen is that it should be delayed to ensure that everyone has had the chance to make an informed decision about what they should do.