New financial products to help Universal Credit claimants manage money
Ministers are calling for a range of suppliers to explore the feasibility of new financial products to help benefit claimants budget and manage…
Ministers are calling for a range of suppliers to explore the feasibility of new financial products to help benefit claimants budget and manage their money.
The Government is seeking providers who can supply products with extra budgeting functions to support claimants as they move to the new benefit Universal Credit.
The Government expects interest from a wide range of financial providers, including high street banks, mobile phone operators and pre pay card providers.
Lord Freud, Minister for Welfare Reform, said:
Accounts that provide people with extra budgeting services could help to ensure people’s essential bills are covered - helping them to build up their credit rating and break the cycle of financial exclusion.
We are anticipating the call for new financial products may open up a new market place, where competition is strong. And we are looking for a range of diverse providers to step forward to express an interest, as we work towards the introduction of Universal Credit in October 2013.
As part of the criteria any potential new accounts must have a series of essential features to help people on low incomes to budget, but the final design will be left open to the market to devise, including:
- Support for claimants to budget and manage their money
- Regular payments for housing and other main bills
- Options for multiple income streams from work and benefits
- Access to all claimants, irrespective of credit history
- Options to build up a credit rating
- Availability to people once they have moved off Universal Credit
This is merely one of a range of options that the Government will be exploring to support UC claimants budget and manage their money.
Notes to Editors:
- The Prior Information Notice is available at http://ted.europa.eu/udl?uri=TED:NOTICE:296147-2012:TEXT:EN:HTML&src=0
- Universal Credit will be paid monthly allowing a smoother transition from benefits to work and will be paid as a single household payment.
- Universal Credit will replace income-based JSA, income-related ESA, Income Support (including SMI), Working Tax Credits, Child Tax Credits and Housing Benefit.
- Universal Credit will roll out over four years from October 2013.
- Over the four years, 12 million claims under the existing out-of-work benefits and tax credits system will change to eight million Universal Credit household payments.