Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, if his Department will assess the potential merits of providing interest-free credit to people receiving certain benefits in order to avoid the use of rent-to-own schemes for household essentials.

DWP currently provides interest-free loans for customers in receipt of income related benefits who satisfy certain eligibility conditions.

Social Fund Budgeting Loans are interest-free loans which are repayable from benefit awards. They are designed to help people who have been in receipt of a qualifying benefit for at least six months, with intermittent expenses that are considered difficult to budget for. The qualifying benefits are: Income Support, income-related Employment and Support Allowance, income-related Jobseeker’s Allowance, and Pension Credit. Universal Credit can be used as a qualifying benefit but only for claimants that migrate from Universal Credit to Pension Credit.

Budgeting Advances are available to Universal Credit claimants who have been in receipt of benefit for at least six months to help meet intermittent expenses, such as buying essential items like furniture or household equipment. These advances ensure that low income families, that have an emergency financial need and don’t have access to adequate savings or affordable loans, can access funding to meet the emergency.