Blunkett announces plans to fend off loan sharks
New plans to help Britain’s poorest from falling into the hands of loan sharks have been announced by David Blunkett.
The work and pensions secretary has said he wanted to help those without savings build up a “tiny nest egg” to prevent them having to approach unregulated lenders when they need credit.
Mr Blunkett also announced extra money for organisations that lend at reasonable rates of interest.
It is believed that three million people in the UK do not have a bank account.
“We need to ensure that we build long-term savings. To engage people in holding an account, in building up credit, in seeing off the loan sharks,” Mr Blunkett said.
He said the government intended to help people to save by doubling the amount of money they could put away without affecting their benefits.
It intends to raise the savings threshold from £3,000 to £6,000.
The work and pensions secretary said an extra £210 million would also be allocated to the Social Fund, which provides loans to those who find it hard to cover important day-to-day costs from their regular income.
Mr Blunkett said those who had paid off a Social Fund loan would be encouraged to continue contributing the same amount in order to build up savings.
He added that a further £36 million would also be allocated to credit unions and other not-for-profit lenders.
“Financial inclusion programmes will be crucial to overcoming child and family poverty and I’m committed to engaging with this inclusion agenda in imaginative new ways,” Mr Blunkett stated.
He added that the government’s task was to “help people build their way out of dependence, out of borrowing and into self-reliance”.
