Ipswich: Fears as ‘lifeline’ crisis loans, which have helped nearly 10,000 families in Ipswich, are due to be scrapped

Soaring living costs are crippling family finances

Soaring living costs are crippling family finances - Credit: PA

NEARLY £500,000 was paid out in emergency loans to people in need in Ipswich in only three years, figures revealed today.

In a stark snapshot of the effect of recession, statistics released under Freedom of Information laws show that between April 2009 and April 2012, 12,910 applications were made for government crisis loans for living expenses. Of these, 9,740 (75%) were successful, with claimants receiving a share of £490,400.

As of April 1 this year, the loan from the social fund, which was paid through the job centre and was an interest free sum of money awarded to help those in an emergency or a crisis, was scrapped under the benefits system overhaul.

A charity in Ipswich described the loans as a “lifeline” for many families and hoped the new local welfare assistance scheme would plug the gap.

A spokesman for Ormiston Children and Families Trust said: “With the cost of living constantly rising, people are finding it increasingly difficult to make ends meet and we are seeing families who are struggling financially more than ever before.

“Crisis loans are, and have been, a short-term lifeline for so many families and without them you do have to wonder what will happen. That’s why we’re glad that local welfare assistance has now come into force in Suffolk.

“Although it’s not a direct replacement for crisis loans, it is there to make sure that vulnerable people who are literally at the end of their financial tether will be able to meet basic and essential needs.”

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More than 2.1 million crisis loans were paid out in 2011/12 across the country.

The Department for Work and Pensions said the social fund was being reformed because it was “complex, over-centralised and poorly targeted” and was being replaced with local provision to ensure the money goes to those most in need.