The  Department for Work and Pensions (DWP) has provided an official statement following calls from Martin Lewis to address a significant problem impacting Universal Credit recipients’ banking arrangements. In correspondence to Pat McFadden, Secretary of State for the DWP, dispatched on Friday, 12 December, the MoneySavingExpert founder argued that millions of Universal Credit recipients could face barriers when attempting to access certain accounts and promotional offers.

Martin also forwarded a copy of the correspondence on Sunday, 15 December, to UK Finance and the Building Societies Association, as well as the Current Account Switch Service (CASS), which facilitates bank transfers. He suggested that 8.3 million individuals receiving the benefit “may effectively be excluded from switching bank accounts” and are missing out on incentives and offers linked to such transfers.

Whilst acknowledging there were a ‘range of issues’, he emphasised that a significant concern was the requirement for numerous claimants to attend face-to-face appointments at their Jobcentre. He argued this created additional ‘hassle, cost’ and a ‘possible loss of income’ whilst representing an ‘inefficient use of Jobcentre resources’.

DWP claims of protecting Universal Credit claimants

Responding to the correspondence, a DWP spokesperson stated: “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.” Martin’s MoneySavingExpert has also shed light on the Department for Work and Pensions’ (DWP) issue with bank switching that seems to be impacting Universal Credit recipients.

The website emphasised that “true inclusion” should consider an individual’s ability to freely choose and switch between any financial product they desire.

Perverting the ‘ease of process’

Martin’s letter pointed out that the ‘bureaucratic process of UC’ seems to ‘pervert’ the ‘ease of the process’, introducing obstacles that make switching bank accounts seem ‘not worth the time’ for those receiving Universal Credit. Typically, the Current Account Switch Service enables Brits to transfer their bank accounts free of charge and boasts of having assisted over 12 million people in successfully switching accounts.

Martin proposed several measures that the government could implement to facilitate bank switching for Universal Credit claimants. These include remote verification processes, more flexible appointment times, and access to digital banks, eliminating the need for physical cards for verification purposes.

The full letter sent to Mr McFadden can be read on the MSE website here.