Guidance

Support for Mortgage Interest statistics: background and methodology

Updated 26 March 2024

Applies to England, Scotland and Wales

1. Purpose

The Support for Mortgage Interest statistics have been developed to provide the primary official source of information about households in receipt of Support for Mortgage Interest (SMI) loans.

The statistics release is published quarterly on Stat-Xplore. It enables a variety of users to be informed about the:

• number of households who are currently in receipt of the support

• number who have received loans so far

Geographic information is also available as well as information on the benefit that has qualified the household for SMI.

2. Background information

Support for Mortgage Interest (SMI) helps protect claimants on qualifying benefits with mortgages from possession when out of work, retired or sick by contributing towards the interest payments on the claimant’s mortgage and certain home loans. SMI stopped being a benefit and became an interest-bearing loan on 6 April 2018.

Claimants are usually eligible for SMI if they have a mortgage and get one of the following benefits:

• Income Support
• income-based Jobseeker’s Allowance (JSA)
• income-related Employment and Support Allowance (ESA)
• Universal Credit
• Pension Credit

Claimants can start receiving the loan:

• from the date they start getting Pension Credit
• after they have claimed Income Support, income-based JSA or income-based ESA for 39 weeks in a row
• after they have received Universal Credit for 3 months in a row

Read more information about claiming Support for Mortgage Interest.

SMI is a loan offer rather than an automatic entitlement. The SMI statistics only reflect the number of claimants who have accepted the loan offer and received an SMI payment.

As of 3 April 2023, changes to SMI eligibility rules for Universal Credit claimants came into effect. These changes reduced the qualifying period that Universal Credit claimants had to serve, from 9 months to 3 months. Additionally, the zero- earnings rule was abolished so that Universal Credit claimants can be eligible for SMI while receiving earned income. This means that prior to 3 April 2023, Universal Credit claimants will not appear in SMI statistics until at least 9 months after they have started their qualifying benefit. From 3 April 2023, Universal Credit claimants will not appear in SMI statistics until at least 3 months after they have started their qualifying benefit.

SMI makes a contribution towards eligible mortgage interest paid. The interest rate used to calculate the amount of SMI a claimant receives is currently set at 3.16% (as at the publication of the latest statistics). A change in the rate of SMI paid is triggered only when the Bank of England’s monthly published Average Mortgage Rate differs by 0.5 percentage points or more from the current rate at which we pay SMI. This applies whether interest rates are rising or falling.

The interest rate used to calculate the amount of SMI a claimant receives, has changed over time.

Timeline	Interest rate used to calculate amount of SMI paid
6 April 2018 (when SMI was introduced as a loan) to 11 April 2021	2.61%
12 April 2021 to 9 May 2023	2.09%
10 May 2023 to 10 December 2023	2.65%
From 11 December 2023	3.16%

It should be noted that changes to the interest rate used to calculate SMI, impacts the average weekly SMI loan payment included in these statistics.

3. Methodology

Households

Statistics publications for different benefits refer to the people that claim those benefits in different ways. Universal Credit statistics refers to ‘households’, where a household is a single person or couple living together and any child dependants. Other qualifying benefits statistics refer to ‘claimants’. In these statistics, these are all referred to as ‘households’.

The statistics also refer to ‘payments’. This refers to an amount of Support for Mortgage Interest loan a household receives. Payments are made on a household level, not to individual claimants. Therefore, payment statistics are published at household level, not at an individual claimant level.

Data is sourced from the Central Payment System which holds data on the Support for Mortgage Interest loan payments made to each household. To protect the confidentiality of claimants, National Insurance numbers and other claim identifiers required for statistical processing are encrypted to prevent identification.

A household will be classed as ‘in payment’ if they receive a payment of any (non-zero) amount of Support for Mortgage Interest. Payments are reported by the date paid rather than the period the payment covers, so the statistics are not changed to retrospectively account for any backdated loans. The date paid reported in the Central Payment System may not be the date listed in other data sources.

SMI loans in payment

A household is classed as having an SMI loan in payment in the quarter if there is record of them receiving an SMI loan payment in the three months that make up the quarter. For example, for a household to be classed as having an SMI loan in payment in August 20, it must have received a payment in June 20, July 20 or August 20. Any instances with more than one SMI payment in a quarter will be counted once in the quarter.

We have chosen to report a quarterly caseload, rather than a monthly caseload, because there are occurrences where households receive two SMI payments within one calendar month and none the next. This might be, for example, because there is a lag between a payment being issued and paid. This means that, if we reported a monthly caseload, the caseload would appear to vary month by month.

Reporting a quarterly caseload gives a higher figure than if we were to report a monthly caseload. This is because a household is counted if they receive a payment at any time during the quarter. For example, if one household received a single SMI payment in June 2020 before leaving SMI and another received a single SMI payment in August 2020 before leaving SMI, both would be counted in the quarterly figures for August 2020.

Qualifying benefit

For households to qualify for SMI, a member of the household must be in receipt of one of the qualifying benefits:

• income-based JSA
• income-related ESA
• Income Support (IS)
• Universal Credit (UC)
• Pension Credit (PC)

To classify households by qualifying benefits, we match the SMI loan payment data to the data we hold for the claimants on these benefits. For Universal Credit, we match to the data underlying the official statistics on Households on Universal Credit. For the other qualifying benefits (JSA, ESA, IS and PC) we match to the data underlying the national statistics available on each of the qualifying benefits. In doing this, we take account of differences in time periods for the different sets of data: JSA, ESA, IS, and PC data is quarterly and represents the number of claims on the system at the end of the reporting quarter whereas UC data is monthly and represents the number of households who have an assessment period that spans the count date (the second Thursday of the month).

If there is a record of the SMI household being a household on UC in the reporting quarter, we count the qualifying benefit for that household as UC. Otherwise, if there is a record of the SMI household being in receipt of one of JSA, ESA, IS or PC benefits in the reporting quarter, we count the qualifying benefit for that household as being the appropriate benefit. If we cannot match households with SMI in payment to data on the qualifying benefits then we classify the qualifying benefit as Unknown or Missing.

The latest quarter we publish is aligned with the latest quarter available for the official statistics on Households on Universal Credit. This is more recent than the data available for JSA, ESA, IS or PC, therefore for the latest quarter we provisionally match the latest quarter’s data with the last published quarter for these benefits. This is then revised at the next release once the data is published.

SMI loan cumulative caseload

A household is classified as having received an SMI loan if there is an SMI payment record for the household by the last date of the reporting quarter.

Geographic information

Residency based geographies are derived from address information as recorded on DWP’s Customer Information System (CIS). Records are allocated a Census Output Area (COA). All higher-level geographies are derived from the COA.

Northern Ireland cases are removed to create a Great Britain dataset.

4. Data sources

Customer Information System

The CIS contains a record for all individuals who have registered and been issued with a National Insurance number.

Central Payment System (CPS)

CPS (Central Payment System) is an integrated payment and accounting system for the Department. We use it for the dates the payment covers, the payment date and the amount of SMI loan in payment.

Official statistics on Households on Universal Credit

Primary official source of information about households on Universal Credit. All data are available on Stat-Xplore. Further information on how this data is created is available in the background information and methodology for the Universal Credit statistics.

National statistics on DWP benefits

We use the latest available National statistics on:

• JSA
• ESA
• IS
• PC

All data are available on Stat-Xplore. Further information on how this data is created is available in the methodology statement for these DWP benefit statistics.

5. Known issues

There are a discrete number of large backdated SMI payments that can appear in the quarterly data. This can skew the mean SMI weekly payment amount upwards particularly when statistics are broken down by qualifying benefit or region. Caution should therefore be exercised when interpreting quarterly changes. We are currently reviewing the method used to calculate the mean SMI weekly payment amount.

6. Revisions

The department’s policy statement describes how DWP will handle revisions.

Revision of SMI loans in payment statistics

The statistics are published in a timely manner to best meet user needs. As mentioned in section 3, with each publication the previous quarter’s breakdown of qualifying benefits is revised. The figures are revised because data on JSA, ESA, IS and PC caseloads is only available up to the second-last reporting quarter for SMI.

For the latest quarter we provisionally estimate the breakdown of SMI by JSA, ESA, IS and PC based on the match between the reporting quarter and the previous quarter’s data on these benefits. They are marked as provisional and at the time of the next publication we revise the figures by using the data that is now available. As we use the latest information when we revise the figures, this can result in minor revisions to the in payment dataset for the revised quarter, including the regional breakdown.

Change to methodology for backdated payments

For the statistics release on 28 September 2021, a change was made to improve the methodology for handling backdated payments which resulted in revisions to previously published figures. This change improved the methodology by making consistent the assignment of these cases to a payment quarter. The impact of this change on the SMI loans in payment and SMI loan cumulative caseload statistics was negligible and mostly affected earlier quarters.

7. Interpretation of the statistics

Information about the interpretation of the statistics:

• figures on SMI loans in payment provide a view on the number of households who are in receipt of SMI in each reporting quarter
• figures on SMI loans cumulative caseload provide a view on the number of households who have received an SMI loan from April 2018 (when SMI became a loan) to the end of the reporting quarter
• reporting quarters have been chosen so that the last month of the latest quarter matches the last month of data available for households on Universal Credit
• households on Universal Credit, JSA, ESA and IS must have served a qualifying period before being eligible for SMI. Since 3 April 2023, any new claims to Universal Credit cannot qualify for an SMI loan until at least 3 months after they have started their qualifying benefit. Households on JSA, ESA and IS qualified for SMI after 39 weeks of starting their qualifying benefit
• SMI is a loan offer rather than an automatic entitlement. The SMI statistics only reflect the number of claimants who have accepted the loan offer and received an SMI payment

8. Status of the statistics

These statistics are official statistics in development. Official statistics in development are statistics which are published in order to involve users and stakeholders in the assessment of their suitability and quality at an early stage, in compliance with the UK Statistics Authority’s Code of Practice for Statistics.

9. Quality statement

These statistics have been developed using guidelines set out by the UK Statistics Authority’s Code of Practice for Statistics.

10. Frequency

Support for Mortgage Interest statistics are published quarterly. The dates for future releases are listed in the statistics release calendar.

Stat-Xplore, an online tool for exploring some of DWP’s main statistics, contains all the latest Support for Mortgage Interest data for the measures listed above.

11. Feedback

We welcome feedback from anyone who uses our statistics on what is useful and how we can improve them. Please get in touch using the following email addresses.

Responsible Analyst: Stephanie De Miranda
Email: stephanie.demiranda@dwp.gov.uk