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Thousands of people who claim a lifeline mortgage benefit are still unprepared just days before it is scrapped by the Tories.

Labour warn elderly homeowners face being plunged into hardship when Support for Mortgage Interest (SMI) is replaced with a loan on April 6.

The £255m-a-year cut to 90,000 people, almost half of them pensioners, was announced in 2015 and almost 500,000 letters have been sent to claimants.

But as of last Wednesday, 40% of claimants had still not talked to a Department for Work and Pensions (DWP) advisor on the phone about their intentions.

Official figures show 31,000 people had not been "successfully contacted" and another 5,000 were "yet to be contacted" by phone.

Of those spoken to, just 24% (13,000) indicated they will accept the loan - with 51% (27,000) set to decline it. The other 25% (14,000) were undecided.

(Image: iStockphoto) (Image: iStock Unreleased)

Shadow Work and Pensions Secretary Margaret Greenwood warned the policy "risks inflicting hardship on thousands".

She told MPs: "A large proportion of claimants are pensioners, and Age UK is warning that many may instead try to manage by cutting back on essentials such as heating.

"Why have the Government failed to give claimants adequate notice?"

SMI, in existence for more than 30 years and worth up to £100,000, subsidises interest payments for benefit claimants who fall behind on their mortgages.

From next Friday it will be a repayable loan which is secured the recipient's house at the same time as a mortgage.

Unlike the mortgage it will only be paid off when the claimant dies or sells or transfers their home.

But ex-publican and steelworker Anthony Griffiths, one of the 90,000 people hit, is selling his two-bed semi-detached home in Cwmbran due to his fears over the policy.

(Image: PA)

The 55-year-old has been claiming SMI worth £320 a month after losing work two years ago.

He told the Mirror he accepted the loan in the last couple of weeks "because otherwise I won't have a house".

But he said he was "frightened to death" of an unpayable bill when he sells his home, adding: "I've been talking to many people who feel the same way who are going to sell their houses."

Labour MP Frank Field, who chairs the Commons Work and Pensions Committee, told the Mirror more staff should be redeployed to phone those hit by the policy "because nobody knows about it".

Age UK charity director Caroline Abrahams added she was "very worried" and some clients were "finding it hard to get the information and advice they need".

She added: "People are receiving these benefits because they are on a low income.

(Image: parliamentlive.tv)

"Spending more on mortgage interest could cut into the money they have available for other essential bills such as heating.

"If people decide to take out the loan, the fact that it will build up over time could restrict their ability to move home, or to meet other costs such as care costs, in the future."

Tory Work and Pensions Minister Kit Malthouse told MPs there are measures "to deal with people who perhaps attempt to manage on their own and feel that they cannot do so".

"They can reapply for support and backdate it to 6 April if they so wish," he said.

He added: "I urge people to ignore the scare stories being put around, look at the paperwork, take the phone call that has been made and ensure they make a good decision in time."