Martin Lewis urges DWP to ‘repair’ main Universal Credit banking problem
Martin Lewis has written to Work and Pensions Secretary Pat McFadden to demand the DWP investigates and fixes an issue that he says is affecting millions on Universal Credit
Martin Lewis has fired off an urgent letter to Work and Pensions Secretary Pat McFadden. He’s called on the Department for Work and Pensions (DWP) to investigate and fix a problem he claims is essentially preventing millions on Universal Credit from changing their bank accounts.
The consumer champion warns this situation could mean Universal Credit recipients miss out on attractive account-switching deals, bonuses and superior banking products that might boost their financial wellbeing. He’s slammed the current system as “bad for competition, bad for consumers and bad for the economy”.
In his letter to the DWP chief, the MoneySavingExpert.com founder highlighted a “range of issues” requiring immediate attention. This involves compelling some claimants to attend in-person Jobcentre appointments solely to switch banks, reports the Daily Record.
Martin explained: “This adds hassle, cost and, for the millions on Universal Credit who are in work, possible loss of income (never mind additional impact on those with accessibility issues). It also looks to be an inefficient use of Jobcentre resources.”
The letter to Mr McFadden states: “Up to 8.3 million people on Universal Credit (UC) may effectively be excluded from switching bank accounts, so they can’t take advantage of deals, incentives and accounts that could improve their financial situation (without any cost to the Government). This is bad for competition, bad for consumers and bad for the economy.
“I would ask you to swiftly investigate and fix this.” There are a host of issues, including the fact that for those on Universal Credit (UC) wishing to switch banks, many are told they must arrange an in-person meeting at the Jobcentre, he said.
He added: “This adds hassle, cost and, for the millions on UC who are in work, possible loss of income (never mind additional impact on those with accessibility issues). It also looks to be an inefficient use of Jobcentre resources.”
Martin stated this “runs counter to the whole idea of simple one-click switching”. He continued: “The UC system does not seem to have been fully updated to incorporate digital banks, some of which lack physical cards or printed statements, making the whole system cumbersome.”
Martin then detailed how bank transfers are handled through the Current Account Switch Service (CASS), a UK Government-backed scheme that already includes anti-fraud protections. He clarified: “It is meant to be a speedy, seamless, no-hassle process that simply transfers an individual’s banking from one bank to another.
“The bureaucratic process of UC seems to, without cause, pervert the ease of the process, and add barriers that many people, especially those who work and are on UC, tell me simply make it not worth the time.”
Martin also revealed that after consumers repeatedly flagged this particular problem to him, he launched an appeal through his social media platforms and was “surprised and concerned to see how widespread the issue was”.
He continued: “Many described the process as stressful, inconvenient and unnecessary. Some gave up and stuck with their existing account. A number have told me they will never attempt to switch banks again.
“I suspect this is an issue that hasn’t been raised with you before, and you will be as keen as I am to look to investigate how widespread the problem is (something only the Government can collect official data on) and then address the wider issue.”
Martin also supplied a “more detailed briefing” for Mr McFadden, compiled by the team of specialists at MSE.com. This featured example case studies, along with details on why they believe this doesn’t seem to have been highlighted before.
Martin wrapped up: “I’d be happy to meet and discuss this if it would help.” A DWP spokesperson responded: “We thank MSE for their letter and will respond.
“DWP are committed to ensuring people receive the support they’re entitled to, while creating a welfare system that is fair to the taxpayer. Personal information such as bank details must be treated securely to ensure payments reach the right person and they are protected from exploitation or impersonation.”
