To ask Mr Chancellor of the Exchequer, what steps he is taking to promote better access to affordable credit; and whether his Department has plans to create a national interest-free credit scheme available to people eligible for universal credit.
6 December 2017
The government is committed to facilitating sustainable financial services that give consumers greater choice in accessing credit. This includes support for the credit union sector, which provides an accessible alternative to high-cost credit.
The government announced at Autumn Statement 2016 that under the Proceeds of Crime Act, from 2018 a greater proportion of funds recovered from illegal money lenders will be allocated to incentivize vulnerable people to join, save and borrow with a credit union instead of turning to loan sharks. In the Autumn Budget 2017, the government announced its intention to help the sector expand by increasing the number of potential members of credit unions from two million to three million.
New Universal Credit claimants can apply for advance payments, and claimants who have been in receipt of Universal Credit for six months are eligible to apply for an interest-free budgeting advance to cover unexpected expenses.