The DWP have published the results of a new study which supports the introduction of prepaid cards for vulnerable benefits claimants.
The DWP carried out a pilot using prepaid cards in Kent. The experiment has been assessed by the Centre for Social and Economic Research at Sheffield Hallam University.
The prepaid cards can be used to withdraw cash and to make payments, set up direct debits and buy items online. Statements and balances can also be checked online.
In the pilot there were no restrictions on what could be purchased using the cards.
The study found that the cards were particularly useful for “people in debt whose benefits were otherwise being swallowed up by overdrafts or credit debt payments in their current bank account.”
The cards also provided “greater financial safety for a few participants who had been exploited by previous or current partners or peers in the past.”
For some claimants, the cards allowed them to buy cheaper products and services online and set up direct debits to reduce costs on utility bills in a way they had not been able to before.
Are prepaid cards a good idea or the start of a slippery slope towards preventing claimants decide how they spend their cash? Let us know what you think in the comments section below.