Can you borrow from your Supplemental Security Income or SSI? The short answer is no. But while you can’t borrow from your SSI, the good news is that loan options may be available for people receiving SSI payments from the Social Security Administration. This article will look at some personal loan options you may qualify for.

What Loan Options Are Available for People Who Receive SSI?

While many people assume they may not be able to qualify for a loan if they are on SSI, there are several options available. Qualifying, in some cases, maybe a bit more challenging, but it’s certainly possible. In some instances, SSI benefits and Social Security payments could count as income for personal loan applicants. This, of course, depends on the type of loan and the lender.

Here’s a look at some options that might be easier to qualify for if you’re receiving SSI:

Secured Personal Loan

These loans require collateral, which is something of value, like a car; because of this, they carry a lower risk for the lender. You may be able to qualify for a secured loan even if you’re on a limited income or have a low credit score. Keep in mind that these loans carry their risks for the borrower. If you fail to repay the loan, you may lose the asset you used as collateral, such as your vehicle.

Credit Card Cash Advance

With a cash advance, you withdraw cash with a credit card from an ATM. Getting funds this way is easy, but there is a downside to this. You may be charged a cash advance fee, which is either a flat rate or a percentage of the amount you borrowed.  You may also be charged an ATM fee for the transaction, and the interest rate on cash advances is much higher than if you were making a typical purchase with your credit card. It’s also important to note that interest starts from the day of the transaction for the cash advance, and there is no grace period.

Home Equity Loan or HELOC

A home equity loan and a home equity line of credit (HELOC) are options that allow you to borrow funds by using the equity you have in your home. A home equity loan provides a lump sum of money with a fixed interest rate, which you pay back in monthly instalments. A HELOC functions like a credit card and gives you access to a revolving line of credit with a variable interest rate that you can borrow from as you need to. With a HELOC, you’ll make interest-only payments during the draw period, followed by payments that include both the principal and interest during the repayment period.

Can a Loan Impact SSI Benefits?

If you take out a loan, the money you receive isn’t considered income and won’t affect your SSI benefits. However, if you get a loan and don’t use it all within a month, it will count toward your SSI resource limit for the following month.

If you’re still unsure about how a loan may impact your SSI benefits, you should check with the Social Security Administration (SSA) for more information before taking the loan.

The Bottom Line

If you’re looking to obtain a loan, it’s good to know that there are options available and that, in some cases, SSI can count toward your income. Just make sure you assess your available options and read the terms and conditions carefully before you sign on the dotted line to ensure that the loan you’re getting is right for you.

Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of finance-monthly.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.

MILLIONS of households are being urged to claim a little-known DWP benefit, which could boost their state pension by up to £328 a year.

This warning is directed at unpaid carers who do not earn sufficient income to make National Insurance contributions, thereby risking their entitlement to a full state pension.

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To qualify for any state pension, you need a minimum of 10 years’ worth of NI contributions, and 35 years are required to receive the full amount worth £221 a week.

Career breaks, such as those taken to raise children or care for relatives, can result in gaps in your NI record, potentially reducing your state pension entitlement.

Fortunately, you can claim free credits to fill these gaps before voluntarily buying back any missing years.

Experts at Mobilise, a community for unpaid carers, is urging the nation’s 10million carers to apply for ‘carer’s credit’ to ensure households they can get the full new state pension.

Carer’s credit fills the gap between caring and work.

It ensures any years where you’re not paying national insurance because of time spent caring are still counted.

It doesn’t require any payments to be made and helps unpaid carers continue to build up towards that 35-year target.

Each annual credit missed could cost you 1/35th of the value of your state pension, according to wealth manager Quilter.

So, by claiming the credit, you could potentially increase your state pension by £328 annually – adding up to over £6,000 over the course of a typical retirement.

Suzanne Bourne, care expert at Mobilise, said: “If you start work at 21 and stop working at 51 to care for your partner, you will only receive a partial state pension when you turn 66.

“This could come as a huge shock and could have been avoided with the carer’s credit.

“We’re encouraging everyone to check whether they are eligible as soon as possible.

“Carer’s credit can be backdated to the start of the previous tax year, even if the person we were caring for no longer has care needs or has passed away.

“So it’s vital that you don’t leave it too long to submit your application, if you think you’re eligible.”

Before making a claim, it’s worth checking your NI record.

CHECK YOUR YEARS

If you think you’re missing National Insurance years, the first thing to do is check your state pension forecast.

You can check this and your state pension age through the government’s new ‘Check your State Pension’ tool online at gov.uk/check-state-pension.

The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.

You’ll need to log in using your Personal Tax Account login details. If you don’t already have an online HMRC account, you can register at gov.uk.

It shows you how much your state pension could increase by and what NI years you’ll need to buy or free credits to apply for to achieve this.

CHECK YOUR ELIGIBILITY FOR CARER’S CREDITS

Before making a voluntary contribution, it is important to check if the gaps in your contributions can be filled with free NI credits.

For example, carer’s credits can help fill in gaps in your NI record if you’re an unpaid or low-paid carer.

To get carer’s credit you must be:

• Aged 16 or over
• Under state pension age (66)
• Looking after one or more people for at least 20 hours a week

The person you’re looking after must get one of the following:

• Disability living allowance care component at the middle or highest rate
• Attendance allowance
• Constant attendance allowance
• Personal independence payment (PIP) daily living part
• Armed forces independence payment
• Child disability payment (CDP) care component at the middle or highest rate
• Adult disability payment daily living component at the standard or enhanced rate
• Pension age disability payment

Thousands are thought to be missing out on these NI Credits, leaving them worse off in retirement.

You can check the full list of people eligible to claim credits by visiting www.gov.uk/national-insurance-credits/eligibility.

It explains the circumstances where you’ll need to claim and when you’ll get it automatically.

TOP UP YOUR NATIONAL INSURANCE YEARS

If you don’t qualify for free NI credits in some cases, buying back missing years can be really valuable.

Voluntary contributions come at a price.

If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.

It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.

As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year. 

Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.

Someone who was retired for 20 years would get back around £55,000 in total (before tax).

Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.

If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.

You can also contact the Future Pension Centre by calling 0800 731 0175.

If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.

You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.

You can usually pay voluntary contributions for the past six years.

The deadline is April 5 each year.

For example, you have until April 5, 2030, to compensate for gaps in the tax year 2023 to 2024.

The deadline has been extended for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018.

You now have until April 5, 2025, to pay.

Find out how to pay for your contributions by visiting gov.uk/pay-voluntary-class-3-national-insurance.

I went to see a band called The National at the Eden Project with my sister, brother-in-law and their friend in the summer.

We’d booked standing tickets months before. Then my sister and brother-in-law found out they were expecting (very exciting), so my sister would be five months pregnant at the gig.

At around the same time, I found out I had narcolepsy (see my online Weekend Essay, 3 May 2024). It also so happened that the friend we went with had mild schizophrenia.

For all firms, large or small, the challenge is to try and relate things to each customer

I remember my brother-in-law telling me about the call he had to make to the Eden Project to get us into the accessible area: “Er, yes, my wife is heavily pregnant, my sister-in-law has narcolepsy and my friend has schizophrenia…. Can we have seats, please?”

I bet they were looking forward to our arrival.

I tell this anecdote because it highlights how quickly vulnerabilities can present themselves. We had booked our tickets in April and, just three months later, my sister and I both needed accessible seating.

It also highlights the extent to which vulnerabilities such as disability can be invisible.

Recognition

It’s easy, when one hears the word ‘vulnerability’, to say, ‘That’s not me.’ My dad has asthma, Type 2 diabetes and high blood pressure, but he still insisted he should take his turn to make a trip to the supermarket during the Covid-19 lockdowns.

This is just one of many issues advisers face when identifying vulnerability in their client base.

We encounter many situations when a client might need support but there isn’t a PoA in place

The Financial Conduct Authority’s definition of vulnerability refers to customers who, due to their personal circumstances, are “especially susceptible to harm”, particularly when a firm is not acting with “appropriate levels of care”.

The regulator has also emphasised the fact people should be referred to as being “in vulnerable circumstances” rather than as “vulnerable clients”.

In its guidance it says: “Firms should think about vulnerability as a spectrum of risk. All customers are at risk of becoming vulnerable and this risk is increased by characteristics of vulnerability related to four key drivers: health, life events, resilience and capability.”

Even with this definition in mind, however, there are so many ways a person can display vulnerability. Plus, life events and health issues affect people in different ways.

There is a knowledge base and a gap that can be filled

“The problem with discussing vulnerability is that it’s quite difficult to define,” says Evelyn Partners head of investment management Chris Kenny.

“Rather than having a series of very clear benchmarks or KPIs [key performance indicators], the industry is trying to find its way, to some extent.”

And, he says, it is not just about defining vulnerability but also about recording and showing that you’re “doing the right thing”.

Struggling firms

Financial services firms of all sizes are “struggling” with several areas, adds Kenny.

“One is the issue of consent,” he says. “What is it that we can get, and how can we do it?”

For all firms, large or small, the challenge is to try and relate things to each individual customer

There is also the question of identification as it is very unlikely that clients will self-identify.

The FCA says that, to deliver good outcomes for vulnerable customers, firms should understand their needs and circumstances. Therefore, the regulator expects firms to “actively encourage” customers to share information about their needs or circumstances, where relevant.

It also expects firms to develop their own method of identifying vulnerability where appropriate, through the data they hold or other means such as external research, customer surveys or panels.

And, as if that weren’t enough to contend with, vulnerability is not a permanent state.

“Advisers need to think: is there a period of time during which there’s a risk of vulnerability, as opposed to it being a state that a client is always in?” says Kenny.

“It could be during a divorce or a short-lived illness, for example.”

Regular and in-depth contact allows the advisers to assess when things are changing and evolving in an individual’s life

Then there is the matter of recording vulnerabilities.

“In our regulated industry, if something isn’t recorded it essentially doesn’t exist,” warns Kenny.

“And finally there’s the question of support — what should we be doing? This causes some concern for advice firms because, even if they manage to clear the first three hurdles, they wonder, ‘Am I doing the right thing?’”

The FCA is keen to get firms up to scratch on all of this. It is expected to make a speech on the matter later this month.

It flagged vulnerability as an issue at the beginning of the year when it launched a review of firms’ understanding of consumer needs, the skills and capability of staff, product and service design, communications and customer service, and whether these supported the fair treatment of customers in vulnerable circumstances.

The industry is trying to find its way, to some extent

This followed a Dear CEO letter to wealth managers and stockbrokers in November 2023 — telling them to reassess the vulnerability of their customers — after the regulator had found that 49% of portfolio managers and 69% of stockbrokers had not identified any vulnerable consumers in their customer bases.

FCA head of department in consumer investments Nick Hulme says: “Vulnerability spans all four of the Consumer Duty outcomes, so getting it right is fundamental to firms ensuring their customers ultimately get a good outcome.”

The Lang Cat consulting director Mike Barrett says: “For all firms, large or small, the challenge is to try and relate things to each individual customer.

“Having a blanket tick-box approach doesn’t achieve that. That’s the poor practice the regulator is trying to stamp out.”

Barrett suggests small firms naturally have more in-depth relationships with clients.

“Regular and in-depth contact allows the advisers to assess when things are changing and evolving in an individual’s life,” he says.

‘Firms should think about vulnerability as a spectrum of risk,’ says the FCA

But smaller firms may lack the capacity to recognise vulnerability.

Kenny says there is a lot more that larger firms and providers can do to help smaller advice-led businesses do “a great job for their clients”, above just trying to compete on price.

He says: “There is a knowledge base and a gap that can be filled.”

Royal London director of policy Jamie Jenkins agrees. He says the need to support vulnerable customers is, rightly, getting more attention, but vulnerability can be difficult to recognise and quantify.

“We work closely with advisers to help them identify situations that might indicate vulnerability, including offering regular webinars,” he says. “We also provide pension and protection insights through our business development managers network.”

Jenkins suggests that advisers can help by putting a power of attorney (PoA) in place with clients “sooner rather than later”.

The problem with discussing vulnerability is it’s quite difficult to define

He adds: “This will really help them to help their clients navigate their finances when they aren’t able to do so themselves.

“We encounter many situations when a client might need support but there isn’t a PoA in place and there is no authority to deal with the third party trying to manage their finances on their behalf.”

Finding the answer

There is no easy answer to identifying and serving clients in vulnerable circumstances. But it is, arguably, one of the most important things a financial planner can do.

After all, if you cannot serve the most vulnerable in society, how can you expect to be trusted by anyone else?

This article featured in the October 2024 edition of Money Marketing. 

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The Financial Conduct Authority (FCA) has interviewed 20 finfluencers under caution for touting financial services products illegally.

It said the individuals were interviewed voluntarily using the FCA’s criminal powers. The regulator has not yet named the individuals under investigation.

The FCA also announced that it has issued 38 alerts against social-media accounts operated by finfluencers that may contain unlawful promotions.

Finfluencers, or financial influencers, are social-media personalities who use their platform to promote financial products and share insights and advice with their followers.

They are not authorised by the FCA and are unqualified to be giving financial advice to their followers, mostly younger people.

Increasing numbers of young people are falling victim to scams, and finfluencers can often play a part.

Nearly two-thirds (62%) of 18- to 29-year-olds follow social-media influencers. Of these, 74% said they trusted their advice, while 90% have been encouraged to change their financial behaviour, according to the FCA.

There has been a significant increase in finfluencers over recent years after a surge in online DIY investing.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.

“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.”

The regulator has taken a zero-tolerance approach to unauthorised financial promotions online.

In May, FCA brought charges against nine individuals in relation to an unauthorised foreign exchange trading scheme promoted on social media.

The individuals, many of whom were former reality TV stars, had appeared in shows including Love Island and The Only Way is Essex.

They include Holly Thompson, Biggs Chris, Jamie Clayton, Lauren Goodger, Rebecca Gormley, Yazmin Oukhellou, Scott Timlin, Emmanuel Nwanze and Eva Zapico.

Nwanze was also charged with running an unauthorised investment scheme and issuing unauthorised financial promotions.

The trial has been set for 2027 at Southwark Crown Court and they face up to two years in prison if convicted.

The FCA’s finfluencer crackdown has been welcomed by regulated entities.

Paul Harris, financial services and fintech partner, Osborne Clarke, said: “This is a landmark step from the FCA, as it is the first time the FCA has sought to prosecute social-media influencers allegedly connected to the communication of unauthorised financial promotions online.

“While the decision to prosecute is significant, it is not necessarily surprising, given the warnings previously published by the FCA and the recent guidance on the publication of financial promotions on social media.”

James Alleyne, legal director in the financial services regulatory team at Kingsley Napley LLP, added: “Finfluencers need to be aware that the FCA’s perimeter is broad and it is very easy to fall within its jurisdiction even without intending to do so. Similarly, financial promotions are tightly regulated.

“Even where individuals are acting in good faith and creating what is intended to be purely educational content, it does not take much to inadvertently cross the line into regulated business and, by doing so, become exposed to a possible criminal investigation.”

Kate Smith, head of pensions at Aegon, also said: “People need to be very wary of so-called ‘finfluencers’ offering financial advice or guidance online, particularly if they are promoting products or so-called investment opportunities. Alarmingly, an increasing number of young people are falling for these.

“There are strict rules for regulated firms around online communications and the FCA make clear that firms need to take appropriate legal advice to understand their responsibilities prior to using influencers in retail investment.

“However, there are still many unauthorised financial influencers with wide followings offering non-regulated pensions and investment advice on social media and this is concerning. We strongly welcome the FCA intervening to make sure this stops.”

Good morning and welcome to your Morning Briefing for Tuesday 22 October 2024. To get this in your inbox every morning click here.

FCA interviews 20 finfluencers under caution for touting financial products

The Financial Conduct Authority (FCA) has interviewed 20 finfluencers under caution for touting financial services products illegally.

It said the individuals were interviewed voluntarily using the FCA’s criminal powers. The regulator has not yet named the individuals under investigation.

The FCA also announced that it has issued 38 alerts against social-media accounts operated by finfluencers that may contain unlawful promotions.

‘Unprecedented shift’ in fee models used by financial advice firms

There has been an “unprecedented shift” in the variety of fee models used by financial advice firms, a new report from NextWealth suggests.

Percentage of assets remains the most common charging structure, used by 71% of respondents’ firms.

The study shows that while this charging model continues to dominate, its use is in decline – with popularity of all other charging structures rising.

In Focus: Vulnerability is more than just a tick-box exercise

“It’s easy, when one hears the word ‘vulnerability’, to say, ‘That’s not me,’” points out chief reporter Lois Vallely.

“My dad has asthma, Type 2 diabetes and high blood pressure, but he still insisted he should take his turn to make a trip to the supermarket during the Covid-19 lockdowns.

“This is just one of many issues advisers face when identifying vulnerability in their client base.”

Quote Of The Day

No government at all serious about growth would hike CGT on entrepreneurs selling a small business

– Tina McKenzie, Policy and Advocacy Chair at the Federation of Small Businesses, sends out a warning ahead of the 30 October Budget

In Other News

A recent analysis of Origo’s pension-transfer data reveals that a growing number of policyholders are shopping around for the best annuity deals, moving away from their original providers.

According to Origo, while 45% of annuity buyers are sticking with their existing pension provider, 55% are switching to new providers to secure better terms.

The Financial Conduct Authority (FCA) recently reported a 38.7% rise in annuity purchases between the 2022/23 and 2023/24 tax years.

This increase reflects a shift in consumer behaviour, with more people exploring the wider market to maximise their retirement income.

Anthony Rafferty, CEO of Origo, noted: “It’s encouraging to see more pension holders exercising their option to switch providers for better annuity rates. Securing the best deal is essential, as annuity purchases are irreversible.”

Origo also launched the Annuity Transfer Tracker, a tool that provides real-time updates on annuity transfers between pension and annuity providers.

This tool allows advice firms to monitor the progress of their clients’ transfers, improving service and reducing the need for follow-up calls.

Rafferty believes this tool will enhance the efficiency of the pension-to-annuity transfer process and ensure clients get the best possible retirement outcome.

UK borrowing tops official forecasts again as Reeves readies budget (Reuters)

Interest rates to fall to 2.75% by next autumn, Goldman Sachs predicts (The Guardian)

Employment reforms to cost firms up to £4.5bn a year (Bloomberg)

Did You See?

Employee engagement in the UK has hit a concerning 10-year low, with only 10% of employees feeling engaged, compared to the global average of 23%, according to workplace consultants Gallup.

This is particularly alarming for the UK financial services sector, which faces significant challenges as generational shifts approach.

By 2025, Gen Z will make up a quarter of the workforce, while one-third of financial advisers are expected to retire within the next three years.

To navigate this transition, firms must improve their employee engagement and management practices to attract and retain the next generation of advisers.

Read the full story by Simon Evans, director at Clearcut Consulting – Engage First.

IF you get a letter from the Department for Work and Pensions (DWP) saying that you’ve been paid too much money, it can be very stressful.

Overpayments can happen for lots of reasons including system errors, changes in your circumstances, and even mistakes made by the government itself.

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The bad news is that if you have been overpaid you almost always need to pay the money back, even if you didn’t notice and have spent it already.

However, you can usually speak to the DWP to work out a monthly payment plan, or there will be a deduction in future benefit payments until the debt is repaid.

The benefit office will determine how much money you should have received, what needs to be paid back, and whether you need to pay a penalty (for instance if you lied about your circumstances).

However, if you think that your payments were correct and you shouldn’t owe DWP anything, then you can challenge the decision. 

We revealed earlier this year that some people are being sent overpayment demands, but after we intervened, it turned out they didn’t owe a penny – so it’s worth checking.

Single mum Penny Davis managed to get a £12,382 bill wiped after she challenged a Universal Credit overpayment demand – and found she was actually owed £2,000.

What to do if you get a letter saying you’ve overpaid

You should get a letter from the benefit office explaining why they think you’ve been overpaid. If you haven’t been given the reasons in writing, ask for them.

If you still think there’s a mistake, start by phoning up the benefit office and explaining the issue.

Give them any evidence you’ve got that supports your belief that you’ve not been overpaid. This might resolve the problem quickly.

If that doesn’t work and you still disagree, you can formally dispute an overpayment by asking for a free mandatory reconsideration. You must do this within a month of receiving your original letter.

You might be able to get an extension in some circumstances, for instance if you’ve been in hospital or had a bereavement.

Don’t forget, someone will look at your whole benefit claim again. This means your benefit could stop, stay the same, increase or decrease.

If you’re not sure, you can contact a charity such as Citizens Advice, Advicenow, or StepChange for help. They can also provide advice if you’ve been accused of benefit fraud. You can also seek advice from a legal professional.

The government says you can ask for mandatory reconsideration if any of the following apply:

• you think the office dealing with your claim has made an error or missed important evidence
• you disagree with the reasons for the decision
• you want to have the decision looked at again

Before making a request for a mandatory reconsideration, make sure you understand why the decision was made. Being clear will help you to explain your case.

If you need help understanding the reason for your benefit decision, call the benefits office. They should be to explain and answer any questions you might have. 

You can ask for a written explanation from the benefits office – known as a ‘written statement of reasons’. You can still ask for mandatory reconsideration after that but must do so within 14 days from when you get the statement.

How to ask for mandatory reconsideration

To ask for a mandatory reconsideration, you need to contact the benefits office. If you get Universal Credit, you can do this via your journal. Other ways to ask for one include by letter, by phone, or by filling in and returning a form.

The contact details may vary depending on which benefit the dispute refers to, but they should be on your overpayments letter.

If you want to dispute a Housing Benefit or Council Tax Reduction overpayment, you’ll need to contact your local authority.

For tax credits or Child Benefit, you need to contact HMRC.

What you need to provide

When asking for a mandatory reconsideration, you’ll need to provide:

• The date of the initial decision
• Your full name and address
• Your date of birth
• Your National Insurance number

You need to say which part of the decision you think is wrong and provide supporting evidence to prove it.

For example, this could be medical evidence or bank statements and payslips. The government says you should only include evidence you have not already sent, and that you should not include general information about your condition or unrelated appointment details.

Make sure you write your name, date of birth and National Insurance number at the top of each bit of evidence so it’s clear it relates to your claim. Unfortunately, you can’t claim back the costs of providing evidence.

If you’re not sure what evidence to send, read the guidance on the form for asking for mandatory reconsideration. You can also ring the benefits office, or speak to a charity or legal adviser.

What happens next?

The benefits office will reconsider its decision about your overpayment. You’ll then get a letter called a ‘mandatory reconsideration notice’ telling you whether they’ve changed their minds.

This letter should explain the reasons for the decision and the evidence it was based on.

If you disagree with the outcome, you can appeal to the Social Security and Child Support Tribunal. This must be done within one month of getting the letter, unless you have a good reason.

This body is independent of government, and a judge will listen to both sides of the argument before making a final decision.  

If you were overpaid

You can usually try to negotiate to make sure that your repayments are affordable.

If you think the repayments will leave you in serious hardship, you should let the benefits office know as they may be able to help.

You can also ask the DWP if it will “exercise its discretion not to recover an overpayment”, which means writing off what you owe.

They don’t have to say yes, and if they refuse you, it can’t be challenged.  You need to give as much evidence as possible about how the payments will affect you and your family.

Even if you have very good reasons, bear in mind it is extremely rare for the DWP to decide you don’t need to pay back the money if you genuinely owe it.

Do you have a money problem that needs sorting? Get in touch by emailing squeezeteam@thesun.co.uk