Martin Lewis has announced he will donate £25,000 to the London School of Economics and Political Science to conduct research in order to help unlock 170,000 mortgage prisoners.

The research will seek to discover solutions which could unchain mortgage prisoners.

Last month, UK Mortgage Prisoner Support Group conducted research through its Facebook group, which noted that 146 out of 170 respondents reported mental health issues associated with being a mortgage prisoner.

Meanwhile, the FCA found that over half of mortgage prisoners who would be eligible to switch to a new product using the new rules published in October 2019 are currently paying an interest rate of 3.5 per cent or lower.

Following the research by the advocacy group and FCA, John Glen MP wrote a letter to UK Finance chief executive Stephen Jones regarding mortgage prisoners, which sought to arrange a collaboration to help unlock trapped homeowners.

MoneySavingExpert.com founder Martin Lewis says: “It is time the government accepted the responsibility to find a solution for these vulnerable consumers. Its failure to do so is short-sighted. The cost of mortgage prisoners does not just fall on the individuals, it falls across society.

“The impact of leaving people locked into unaffordable mortgages can be catastrophic. It can leave them dependent on the state, with little savings for old age, and even adding to NHS costs with the hideous and disastrous mental health impact that can occur when you destroy someone’s financial life choices.

“Over the next few months, we are asking the LSE to explore a range of cost-effective, practical policy solutions the government could employ to rescue mortgage prisoners. For example, subsidising competitive lenders to enable them to offer mortgage prisoners a decent deal.

“In fact it is actually responsible for some of their pain, selling the mortgage customers of former lenders like Northern Rock and Bradford & Bingley to inactive lenders, who have no other mortgage products, or firms who are not authorised to offer new products, leaving these mortgage prisoners with no option other than to try to afford to keep paying obscene rates.”

UK Finance director of mortgages Jackie Bennett adds: “UK Finance is working with a wide range of banks, building societies and specialist lenders to help them develop new products for borrowers with inactive firms who are eligible under the Financial Conduct Authority’s revised affordability criteria.

“We are also actively considering other practical ways in which these customers could be helped.

“The Money Saving Expert research will build on these industry-wide efforts by providing further valuable insight into potential solutions for these customers.

“We will continue to work closely with members, the FCA and the government to help find solutions for as many customers as possible.”