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Changes To Smi

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I think longer term this will really focus the minds of a lot of people who have interest only.I know a few people who had their mortgages paid for with SMI for many years,then sold up with a big capital gain and moved abroad or downsized.

For younger people it will go two ways.Encourage them never to work again,or get off benefits as quickly as possible.

It will be interesting to see how the loan works.Will they attach it to the house as a charging order?.If they do will it be 2nd charge after the bank,or 1st charge?.If its not charged whats to stop people MEWing up to the value so there is no equity for the government.Or selling to their wife for peanuts etc so no equity to pay back the loan.Seems to me they will need to charge it to the house as a first charge.Also how will the paying back work for younger people?.Wait and see the legislation i guess.

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I think longer term this will really focus the minds of a lot of people who have interest only.I know a few people who had their mortgages paid for with SMI for many years,then sold up with a big capital gain and moved abroad or downsized.

For younger people it will go two ways.Encourage them never to work again,or get off benefits as quickly as possible.

It will be interesting to see how the loan works.Will they attach it to the house as a charging order?.If they do will it be 2nd charge after the bank,or 1st charge?.If its not charged whats to stop people MEWing up to the value so there is no equity for the government.Or selling to their wife for peanuts etc so no equity to pay back the loan.Seems to me they will need to charge it to the house as a first charge.Also how will the paying back work for younger people?.Wait and see the legislation i guess.

How will it work? Badly, mortgage companies are loathed to have a charge on something that is theirs.

Maybe its designed to not work i.e. kick off a house sale ASAP.

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How will it work? Badly, mortgage companies are loathed to have a charge on something that is theirs.

Maybe its designed to not work i.e. kick off a house sale ASAP.

Thats what i was thinking.It its a first charge banks wont like that at all.If its 2nd charge will that stop banks allowing the people to MEW.If its not a charge at all,just a loan,then what use is it?

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My brother had a disabled home improvement grant, repayable as a second charge on the house if he died within 6 years (which he did). They'll probably do it the same way for SMI - seems the mechanism is already there.

Edit to add: presumably if he'd MEWed it all away they would have pursued the rest of the estate.

Edited by RentingForever

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If its not charged whats to stop people MEWing up to the value so there is no equity for the government.

Surely MEWing while/just before claiming SMI would constitute 'deprivation of capital', might invalidate the SMI claim altogether if the DWP found out?

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Labour has tabled an amendment to the measures outlined in the Welfare Bill, which is being debated in Parliament this week, to exempt pensioners from the changes.

FFS!

Why not pay for more special pensioner handouts by ramping up student loans further, eh?

EDIT: What's the interest rate on student loans again? Higher than the gilt rate you say? Still, fair enough. They're young and don't seem to vote.

Edited by Quicken

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