Thousands of pensioners face “cutting down on heating and eating” after the Tories axed a vital benefit, campaigners warn.
New figures reveal three quarters of people who were on Support for Mortgage Interest (SMI) have been left in the lurch since the £87-a-month payment was swapped for a repayable loan.
SMI was paid for decades to people on hard times to fund their mortgage interest – saving their homes from repossession.
But last April the Tory government changed the benefit to a loan repayable in full, with interest, when claimants die or sell up.
Now official figures show 78,000 of 103,000 former claimants (75%) have chosen to stop SMI rather than take on new debt.
Just 21,000 (21%) have accepted the loan and 4,000 (4%) are undecided. A further 1,000 could not be contacted.
Labour branded the cut a “failure” and Age UK warned it may force people to cut down on heating or eating.
Charity Director Caroline Abrahams said: “People are receiving these benefits because they are on a low income.
“And it is unclear how people are meeting mortgage interest payments now given most have chosen not to take up the loan.
“We are concerned that older people affected may be facing hardship and cutting down on essentials such as heating and eating.”
SMI was worth an average of £165 a month for working-age claimants and £87 for pensioners in 2015/16.
To qualify families had to be on Income Support, Pension Credit, income-based jobseekers’ allowance or income-based disability benefit ESA. Almost half of claimants were pensioners.
Mike Amesbury, Shadow Employment Minister, said: “The decision to convert SMI into a loan has clearly been a failure.
“A high proportion of SMI claimants are elderly or disabled.
“How they will manage without support for their housing costs is a matter of real concern and there is a real risk that they could be pushed into real hardship.
“The Government must get a grip and act urgently to make sure that people are not pushed into poverty because of this policy.”
The Department for Work and Pensions said the loan is still available to people who turned it down, and can be backdated to the date of the cut in April 2018.
A DWP spokesman said: “Support for Mortgage Interest (SMI) changes provide a safety net for homeowners from repossession and make it fair to the taxpayer who funds it.
“Mortgage lenders tell us the majority of claimants who did not take out an SMI loan are meeting their mortgage commitments.”