Savings Q&A special – ISAs, savings tax, pay off debt or save and more. Plus credit card beginners guide

Martin answers a huge number of questions on savings, on how ISA’s work, where is a safe place to keep your money, the pros and cons of investing, should you be saving or paying off debt and far more. The podcast also covers lots of other subjects such as getting travel insurance for holidays booked a long time ahead, how credit cards really work, what to do if a car finance firm hasn’t replied to your reclaim complaint and more. This week’s Mastermind is all about if borrowing more means you actually pay less?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Martin Lewis?

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• 0:06Speaker 01

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• 1:22Speaker 02

  Coffee?

• 1:22Speaker 03

  Love a cup of tea. I'll have tea too.

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  Tea for me, please.

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• 1:35Martin Lewis?

  Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually much of it comes from a BBC Radio 5 live show with Adrian Charles. But don't worry, there's bonus money-saving tips just for you lucky, lucky podcast listeners. In today's pod, it's a Q and A special. We've had huge numbers of questions on savings, on how ISAs work, what safe savings, why they limit what you can earn, how tax on savings works, the pros and cons in investing, should you be saving or paying off debt, and far more. And questions on lots of other subjects too. Travel insurance for holidays booked a long time ahead. How credit cards really work. What to do if a car finance firm hasn't replied to your reclaim complaint and more. And this week's mastermind is all about.

• 2:20Martin Lewis?

  Can borrowing more mean you pay less? As you can probably hear, I've got lurgy and my voice is a bit of a struggle. So let's get on with it. Play the theme tune.

• 2:47Speaker 06

  That is the sound of Martin Lewis. It's his theme tune. It plays wherever he goes, even when we've got nothing to play it on. When I see him, I can hear that tune. Martin, what are we doing today?

• 2:58Martin Lewis?

  Yeah, it's true, Adrian. Even when I lift up the toilet lid, that's the tune that goes off when I, you know, anytime I make a deposit.

• 3:07Speaker 06

  All right. So we've got this story that your money and mental health charity has been, has got itself a new status. Explain what that means.

• 3:15Martin Lewis?

  It has. I'm now officially super. I think I might get myself a cape. Yeah, I set up the Money and Mental Health Policy Institute in 2016. Its aim is to break the toxic link that there is between mental health issues and money problems and debt. We've been going a long time. I still chair the charity. But last week it was announced that we now have what's called supercomplaint status. And we are the only, the seventh organisation in the UK to get that since supercomplaint status came into effect in 2002. The others being Which, Citizens Advice, Citizens Advice Scotland, the Campaign for Real Ale and the Consumer Councils for Water and Northern Ireland. And what it means, and we've got it with the Competition and Markets Authority, and we're hoping we'll also get it quite soon with the regulator, the financial regulator,

• 3:58Martin Lewis?

  is if we do, and it has to be done in a formal, structured way and takes quite a lot of resource to do, a formal supercomplaint, then the regulator has to respond to us and it has to tell us why. Hopefully it's doing a formal investigation itself, or perhaps it's telling us why it wouldn't do a formal investigation. It's basically a power that enables you to jump the queue and to prioritise things that you might have been lobbying for anyway, but they're just going, "Yeah, we'll get to that at some point". But now with supercomplaint status, tough to supercomplain with a voice going, with supercomplaint status, we can do that automatically. It's a massive kite mark as well. And what it does is it sort of, it means that when we go into meetings with organisations, they know we've got supercomplaint status, this special escalation

• 4:42Martin Lewis?

  measures that can be really powerful. So I'll try and give you an example of something. In the forefront of my mind, and we don't yet have this power with the regulator, the type of thing we would do is take travel insurance. Now, when you look at travel insurance, someone with depression is typically paying three times as much as everybody else. It goes up to some with their personality disorders are paying 27 times the cost for travel insurance as everyone else. And we, while there may be some incremental cost and incremental risk, we simply don't think the increased risk justifies the increased cost. Now, we've done our own research on that, but we don't have the power to go and to force companies to give actuarial data in the way that a regulator would. So if we were to choose to do a supercomplaint

• 5:24Martin Lewis?

  on that issue, that would then push it onto the top of the regulator's agenda for it to go and investigate and check out, is it really justified? Whereas that some people with bipolar disorder are paying 27 times what everybody else is to get travel insurance for a week away in Spain. And that's the type of thing that supercomplaint status will enable us to do. It's not officially in place yet, it's been announced that we'll get it, we don't get it till April. And then actually the research that you need to do to put in the supercomplaint, I mean, I'd probably have to put a couple of members of the charity on it full time for six months to do the research to get it in a position where we could make a supercomplaint. But yeah, I'm very pleased to get it. It is, it's a big, it's, you know, it's a bit of a cape and a bit of an underpants on the outside of your suit for a charity.

• 6:09Speaker 02

  Tell us about the tellers today.

• 6:12Martin Lewis?

  So the tellers, which is the special that we're doing today, is all about effectively your simple questions. What's the one thing about saving money that's confusing you or stopping you acting right now that you could do with some help with? And that's where we want to go. You talk for a second, I just need to have a cough and some water, sorry.

• 6:29Speaker 02

  Okay. Martin has very professionally faded himself down, so we can't hear him coughing. I would have forgotten to do that and just splotted away regardless.

• 6:40Martin Lewis?

  I'm back.

• 6:41Speaker 02

  So we're talking about, nice work, we're talking about saving money. This is putting money in a savings account or saving money as in money saving expert.

• 6:50Martin Lewis?

  It's meant to be the much wider saving money as in money saving expert, but the way people interpreted it was saving money and we were just so swamped with questions and some really interesting ones and things. I'm always fascinated by what people don't get. When you, when you've, you know, had your nose in the trough of a subject for 20 years, it all seems quite simple and then you go, oh, I thought that was pretty obvious. And, and so that's what we want to do. This is a beginner's guide, a 101 to saving money, but with a focus on savings. What have you got for me?

• 7:16Speaker 02

  Greg, the accounts you speak about for ISAs and savings, we've never heard of them. How safe are these accounts? Well, in a way, that's the, sort of the wrong question, isn't it? They're, they're safe, but are they making you, you know, how do they save you? How do they, how are they a good way of saving?

• 7:35Martin Lewis?

  No, I, forgive me, I think his question's right.

• 7:37Speaker 02

  Okay, fine, fine, fine.

• 7:39Martin Lewis?

  I mean, what I think what he's saying is, you know, he, he watches me do my programs and I recommend all these accounts from providers they've never heard of. And how can they trust them? Because they're names they don't know. And in fact, a couple of years ago, I shifted on my website that we have two columns. We have the best payers and then we have the best payers from the big names. Because so many people are nervous of putting their money away with a provider they've not heard of. Now, I don't share that view.

• 8:00Speaker 02

  Well, frightened of what though? Frightened that it's gonna...

• 8:03Martin Lewis?

  Frightened of it going bust.

• 8:03Speaker 02

  Right, okay.

• 8:04Martin Lewis?

  Frightened of it going bust and them losing their money.

• 8:07Speaker 06

  You're protected, aren't you to a certain point?

• 8:08Martin Lewis?

  Exactly, which is the answer. The answer is you will never hear me talk about a savings account that does not have the full UK financial services compensation, which means you are protected up to eighty five thousand pounds per person, per financial institution. In the unlikely event it were to go bust and you're protected, it is effectively a state backed scheme now. Clearly, it's only as strong as the state is. So if the UK government were to go bust, then you wouldn't have any protection. But then we've all got bigger things to worry about anyway. So certainly when I am talking about those accounts, they are all full UK FSCS deposit protection. So you would get your money and the interest back and it would be done pretty quickly under the way that they work it right now. In the unlikely event that one of them were to go bust. If it didn't have that protection, I would mention it.

• 8:53Martin Lewis?

  That's something I do, you know, there's some, for example, there's a couple of cash ISAs at the moment that pay you a bonus interest and they pay the bonus interest not into their bank account into a separate scheme. So technically the bonus interest, not the normal interest, not your capital isn't protected and I would mention that. But I say I would, I sometimes see adverts on the internet for products that are not UK FSCS protected. They might be corporate bronze dressed up to look like they are savings account, but they don't have that protection. So you do have to be wary, but if you'll forgive me, assuming you trust that I do my due diligence, which I do, then anything that I mention would always have that protection scheme.

• 9:32Speaker 06

  Mrs. B says her bank keeps reducing the interest rate, so it's very hard to build savings as quickly as she'd like. She said, why should I keep my money in a bank earning them loads? Well, should I just keep it all in cash instead?

• 9:46Martin Lewis?

  Well, the first thing I'd say is stop trusting your bank and stop sticking with one bank, but let's answer the last bit first. Money in a bank account is protected up to eighty five thousand pounds per person, per financial institution, as we have just discussed. Money kept in cash under your mattress, well, the best possible home insurance policy would only protect you for up to a thousand pounds of cash. So it is very, very unsafe to have money of that bulk into your cash. And frankly, you are more likely to be robbed than your money is to be robbed from the bank. Plus, the bank does pay you interest. The problem is, you're saying, my bank. Why do you have a bank? I mean, I have many different banks, as do most people who are savvy with saving money. You know, you might have one for your bank account, you might have your credit card in a different company, you might have your savings account elsewhere.

• 10:31Martin Lewis?

  You might have five different savings accounts. So the answer is, stop sticking and being loyal with your bank. Go and get yourself the best pair on the market. I mean, at the moment, in savings, you can be earning, getting on for five percent easy access to the likes of chip and trading two one two are offering that in their cash ISAs. And there are a whole host of other accounts out there that are paying decent rates, you know. Tesco, if you want a big name, four point four one percent in its easy access account. All of those are probably smacking the pants off your bank. So stop being loyal with your bank would be the answer. Get your money out of your bank and put it in the top paying savings accounts, not just sticking with what your bank. I mean, why would you give a bank all your custom?

• 11:12Martin Lewis?

  By definition, by the way, there is no one financial institution that's top of the table at the moment for any more than one product. Therefore, if you have more than one product with one financial institution, by definition, you don't have the best buys. Loyalty in that sense does not pay. So if you, just briefly, something occurs to me, if you take the view, say, look, my bank, Bank X is paying me next to nothing. I wonder how that, how much money they're making from investing my money, which I've given them to keep hold of. But you can't really get them, you can't get that figure, can you? Well, look, there's two ways to look at this. We can go very simply and we can simply say that when a bank gives you a credit card and therefore it lends you money, it will typically charge you twenty five percent APR.

• 11:57Martin Lewis?

  When you save with a bank, which is you lending the bank your money, so it's the same thing, it's just the other way around. I mean, the best pair will pay you four point five percent. So there is a massive difference. Now, of course, on a mortgage, they won't pay you as, you know, they're not charging as much, they're probably charging somewhere between four and eight percent. And then we'll, there's the whole issue that I know many people want me to go in talking about, but I'm not a. Macro economists, the fractional reserve banking, which actually means banks create money by being able to lend out more money than they keep in capital and there's whole security things of the way that that works. But ultimately, yes, that that's exactly what's going on, which is why the big rule is make sure at least if you're putting your money in a bank, which you do get some protection and you do get some service from it. Make sure you're getting the best rate for it.

• 12:38Martin Lewis?

  Um, actually, so don't, we we can all fulminate in the unfairness of it, but we'd be better off spending that fulmination time just getting the best rates we can. Well, yes, and and you know, that that's always the way you minimize your borrowing costs, you maximize your saving costs. That's what I've made my entire profession out of. And the the loyalty doesn't pay, the the way you get the best interest on savings is to be an active, aggressive saver. And I don't mean that in terms of aggressive to people, I mean constantly monitoring your rates and moving them to where they're best. Now, some people will say that's not worth the effort and they may be right for a couple of, you know, point one or point two percent of interest. I wouldn't tell you off for not keeping it, but certainly if you're earning anything less than four percent on your savings right now.

• 13:20Martin Lewis?

  Assuming they're not locked into a fix where that where you can't move them, then you should be ditching and switching and going and earning over four percent. And if you're not, then, you know, you're ripping yourself off, if you like. Yeah, um, great, great question. My basic savings account earns a low interest rate. Wouldn't inflation mean my money is worth less in twelve months than the interest I'd gain? So in real terms, I'll get more value spending it now rather than saving. You would, and that's exactly the reason that they cut interest rates to encourage you to spend. That's the entire reason of interest rate policies. When we cut interest rates, it's to make borrowing cheaper so that firms are likely to borrow more and therefore spend more. And it's to make saving less attractive, so people are less likely to save and more likely to spend in order to put more money into the economy.

• 14:03Martin Lewis?

  That's literally the principle of interest rates. The problem I have with your question is at the moment inflation is three percent and the top paying savings are four percent. So in real terms, your money would grow if you put it into a savings account. It would grow even faster if you got a good investment. For example, though, I don't talk about investments, but absolutely that's worth looking at. Now, when we have the position that inflation is higher than the top you can earn in savings accounts, which we have for a number of years, I used to call savings. Things losing, they were losing. I mean, it didn't mean you shouldn't use them because what you wanted to do is mitigate and minimise your loss with the highest interest that you could possibly get. But they were losing. At the moment, the top pairs are savings. But if you're with a bog standard crappy account, then you're not going to be getting enough interest and your money will be diminishing with inflation. So you need to not be in a bog standard terrible account.

• 14:49Martin Lewis?

  Okay, Rachel, I don't understand how this twenty thousand pound limit in cash ISAs works after one year. If I get a new ISA, can I then move the money from a previous ISA? Or do I get taxed as it's over the limit with the, you know, including if you include the interest? Okay, let me go back to basics on this one. Oh, I've just found if I drop my voice a little bit, it doesn't hurt as much. So forgive me, I'm gonna be, I'm gonna become Whispering Martin for the rest of the show. So you get, you are allowed to put twenty thousand pounds in an ISA, an individual savings account, which is just, when it comes to a cash ISA, is just a savings account that you don't pay tax on the interest. And you are allowed to do that every tax year. The tax year ends on the fifth of April and it starts on the sixth of April.

• 15:30Martin Lewis?

  So if you haven't used this year's, you need to get on with it because that deadline is coming pretty quickly. Now, once you put money in a cash ISA, it stays tax free year after year after year as long as you don't take it out. So that means you could put in twenty thousand pounds this tax year, right now. You could put in another twenty thousand pounds on the sixth of April, so you'd have forty thousand pounds. And then a year after that, you could put in another twenty thousand pounds. Once that tax year that you put the money in is closed, you are absolutely free to transfer that money and move it elsewhere. So for example, if you opened a cash ISA with the top payer this year, that rate dropped and you had another cash ISA next year with another twenty thousand pounds.

• 16:12Martin Lewis?

  Well, providing that new cash ISA allowed you to do transfers, you could transfer this year's money across. So the rule on cash ISAs is not you can only have twenty thousand pounds. The rule is you can only put in twenty thousand pounds per tax year. Once it's in, it's in. I've explained before that a cash ISA I tend to think of as a piece of cling film. You know, you've got your cakes, you've got your chocolate cake, you've got your strawberry cake. Your chocolate cake is cash because it begins with a C. So I've got my chocolate cake. Now, the problem with the chocolate cake normally is it gets interest, that's the icing on the top. And someone from the tax office can come along and take a bite out of it. But what an ISA is, it's a piece of cling film. It's a wrapper you can put around the chocolate cake. Now, the chocolate cake is still chocolate cake when it's in the wrapper. It hasn't changed.

• 16:57Martin Lewis?

  It has exactly the same structure. It works the same way. It could be easy access. It could be no noticed. It could be fixed. You can have all those variants in the cash ISA. It's just the same thing. The only difference now is when you put the chocolate cake to your mouth,

• 17:10Martin Lewis?

  the tax officer can't bite it anymore because it's wrapped in cling film. So you get that cling film every year and once it's in the cling film, it stays in the cling film until you take it out of the cling film. And in fact, you can still use that cling film. You could even move your cash ISA into a stocks and shares ISA or vice versa. Once you've put the money in, as long as you don't take it out of the ISA wrapper, as long as it's within the cling film, you can move it and change the nature of what in it from stocks and shares to a different provider. So don't get too confused on it. It is just an annual allowance. But once you put it in, the annual allowance is about what's put in. It's not about what you have in total. It's about what's put in in that tax year. Did that make sense?

• 17:48Speaker 06

  It did. Bohemian girl, and I'm imagining her there sitting on a bean cushion, Jossic burning, Procolharum perhaps or something playing. But she has, she wants to know, why do banks limit the amount you can save every month? Say £200 for Nationwide Flex and then prevent you opening a second account?

• 18:06Martin Lewis?

  I was wondering where you were going then until you said Nationwide Flex.

• 18:09Speaker 06

  Yeah.

• 18:10Martin Lewis?

  Right. So the Nationwide Flex is Nationwide's current account linked regular savings account that of the top of my head, I think pays 6% interest on up to £200 a month for a year fixed. A number of bank accounts have these regular savings accounts. They tend to pay very high interest. First IRECs pays 7%, but only on limited amounts you can put in each month. First IRECs up to £300 from memory. Why do they do this? Very simple. It's a loss leading marketing promotion. It means that they can advertise their current account gets you a very high rate of interest, six or seven percent, but only on a very small amount of money. So they don't have to pay very much out. Why do they not let you do more than one? Well, because then you would have more money at a very high rate of interest that they don't want to pay you.

• 18:52Martin Lewis?

  These are called, now they are still good accounts. You still get that high rate of interest and they are still good for people who are saving each month because it's Hundred pounds a month that you can put in. But you wanna know why they do it? Because it's a marketing thing. They're simply saying, okay, well, if you put three hundred pounds in a year, in a month, over a year with First Direct, at three thousand six hundred, I mean, effectively. We're gonna have to pay out a hundred and thirty pounds interest. Over the year on that amount of money, and that's our cap, our liability. So, just in the same way as many banks pay you. Like First Direct, again, will pay you a hundred, and NatWest will also pay you a free cash for switching, a hundred and seventy five pounds, that's one incentive. Another incentive is a linked, limited, regular saver for a small amount of money with a high headline rate of interest, which attracts some people.

• 19:36Martin Lewis?

  That's why, because it's marketing. It's not really a product, it's a marketing bonus.

• 19:40Speaker 06

  Christina's fed up. She's sick of working hard, getting taxed on income, and then taxed on savings. How does that work? So frustrating, she said.

• 19:50Martin Lewis?

  Well, if you forgive me, you are not taxed on savings. You do not pay tax on your savings. You pay tax on the interest earned on savings. And I know it is a fine difference, but it is an important one. You put money in the bank, or the building society, or wherever you do, in a deposit savings account. And you do not pay any tax on the money you've put in. You only pay tax on the money you've earned, and it is because it is treated like any other form of income. Although it does have special allowances, and it's really important to actually focus on what those special allowances are. This is a little bit complicated, it may well strain my voice today, so let's go with it. But, the first thing to say is, everybody has, and I'm. Doing this really simple, and it does vary slightly the limits in Scotland, but let's just take it as principle.

• 20:33Martin Lewis?

  Everybody, first of all, has twelve thousand five hundred and seventy pounds that they can earn from any source, whether earned income or savings interest, or anything else. Which you don't pay tax on, your normal, standard, tax-free, personal allowance. Now, in savings specifically, and there's something else I'm gonna come to in a moment, you then have, if you're a basic twenty percent rate taxpayer. One thousand pounds a year of interest you can earn from any savings source, which you don't pay tax on. That's a thousand pounds of interest. Not a thousand pounds in a savings account. So at five percent interest, as a basic rate taxpayer, you could put twenty thousand pounds in the savings account. And it would be tax-free, because that would generate a thousand pounds of interest. As a higher forty percent rate taxpayer, you're allowed five hundred pounds of interest tax free.

• 21:19Martin Lewis?

  So, you know, it'd be ten thousand pounds in there that would save you and you wouldn't pay interest that you could have in the top five percent savings account. If you happen to be lucky enough to be a top forty five percent rate taxpayer earning over a hundred and twenty five grand, you don't get one of these. There is another savings allowance that is rarely spoken about, which is called the starting savings allowance. And this is for low earners and it's quite complicated. So what it says is you can earn up to five thousand pounds on top of your one thousand pounds as a basic rate taxpayer of interest tax free as a low earner. So if you if you had earned income under twelve thousand five hundred and seventy pounds, which is the standard tax allowance, you can earn five thousand pounds on top of that in savings and this starting savings allowance

• 22:03Martin Lewis?

  in savings interest, which is untaxed. For every pound you earn above twelve thousand five hundred and seventy pounds, you lose a pound of the five thousand pounds. So let's make this simple. Let's say you earn thirteen thousand five hundred and seventy pounds, which is a thousand pounds above twelve thousand five hundred and seventy. You therefore lose a thousand pounds on your starting savings allowance. You can now only have four thousand pounds, which you can earn in the starting savings without paying interest on your savings. But what that means technically is for people who had, say, all of their money was generated by savings interest. Well, they would have twelve thousand five hundred and seventy of their normal tax free allowance. They would have their five thousand pounds starting savings allowance and they would have their one thousand pound personal savings allowance as a basic rate taxpayer,

• 22:48Martin Lewis?

  which means you can earn eighteen thousand five hundred and seventy pounds tax free if all your money came from savings interest. And then you could have a nicer on top for twenty thousand pounds a year, which would be tax free. And you could put money in premium bonds up to fifty thousand pounds, which would be tax free. Now, I'm not arguing here that the tax, I'm just explaining the tax regime, but I go back to the annoyance. Let's just, because people say it's double taxation, let's be technical, it's not. There are other things that are double taxation. But you get taxed on the amount of money you earn on your income. And then you get taxed on the amount of money you earn on your savings. You do not get taxed on your savings.

• 23:27Martin Lewis?

  So I I think it's technically not double taxation, because it's the taxation on what your savings are earning you, not the taxation on the savings themselves.

• 23:35Speaker 06

  Okay, range your ISAs. Can't you start an ISA for a grandchild, even though you have your own ISA? Do the combined ISAs have to max out at twenty K or can each have twenty K in them in the same financial year?

• 23:50Martin Lewis?

  Not a mastermind question, Adrian, but what does ISA stand for?

• 23:54Speaker 06

  Uh, hang on a bit. It's savings allowance.

• 23:58Martin Lewis?

  What, yeah, what's the I? That was the I.

• 23:59Speaker 06

  Independent, no.

• 24:01Martin Lewis?

  Individual.

• 24:01Speaker 06

  Individual, yeah.

• 24:02Martin Lewis?

  So answer the question.

• 24:04Speaker 06

  Uh, then it would be the case that you get two lots of allowances.

• 24:09Martin Lewis?

  No, well, yes.

• 24:10Speaker 06

  Well, there's two individuals involved.

• 24:12Martin Lewis?

  Exactly. You can't open an ISA for you, for your grandchild.

• 24:16Speaker 06

  Right.

• 24:16Martin Lewis?

  Your grandchild can have a junior ISA and you can have an ISA and they're totally separate. And the money in the junior ISA is not your money, it's your grandchild's money. And everybody is individual in this case.

• 24:27Speaker 06

  Okay, but it's not clear that, it's not opening, it's not quite clear that it might be opening.

• 24:32Martin Lewis?

  Well, if he's if he's saying, can I save money in my in my account, which I hope at one day in the future to give to my grandchild? No, because you've got an individual savings account, it's your money. The fact what you choose to do with it in future is irrelevant for this case. Your grandchild can have a junior ISA. Interestingly, you I I'm, I'll have to double check this, I'm on a ninety five percent surety level. I think only parents and guardians can open the junior ISA. So you're the parents and guardians would have to open it and you would have to put the money in. But yes, you can absolutely put junior money into a junior ISA for your grandchild, but it's their money, not yours. So it wouldn't count towards your individual savings account, it would be their individual savings account. And it's around nine thousand pounds you can put in a junior ISA for an under eighteen.

• 25:12Speaker 06

  S Z N, whatever that means. So I'm looking into saving options for the next financial year, trying to find the best options at balancing ease of access. Are you not logged in? Avoiding needing to pay tax on interest. Minimal risk due to current financial climate. Any advice appreciated.

• 25:30Martin Lewis?

  Well, you're asking me for the next financial year, so the answer is no, I can't answer. And I know I need to be really plain. I can only give you today's best savings accounts. And in fact, almost invariably, as I'm recording this, one or two of those will change. Savings are incredibly fast moving. It is a, it's an hour by hour, not even a day by day thing. So the idea that I can give you, the next financial year starts on the sixth of April, that I can give you the best rates now, I'm afraid I can't. But we can talk through the basics, there's a few basic things you need to understand. First of all, we're talking savings here, so you're putting your money away, where the money that you put away is protected and you're going to get an amount of interest on top. The first thing the bog standard to place to look at is easy access savings.

• 26:15Martin Lewis?

  That's where you can put as much money in as you like and you can take as much money out as you like, whenever you like, with total freedom. But they tend not usually to pay the highest rates, although perversely, the best payers do at the moment. If you're going to have a lot of savings, so you're going to go over your personal savings allowance, that one thousand pounds for basic rate taxpayers I talked about before, then you'd probably want to put it in a cash ISA to protect an amount of that money from tax. In the old days, until about a year ago, cash ISAs paid worse than normal easy access savings currently, because there's a competitive market out there, the top paying easy access savings are all cash ISAs. That all, so you know, you've got chip, you've got trading two one two at the moment, all at or around five percent or just a little bit below that. And it's also worth looking at fixes.

• 27:00Martin Lewis?

  Fixes, the problem with easy access is they're variable. So you put your money in, you get a rate, but that rate can be changed. And it will generally drop when UK base rates drop, but it may also drop when the provider decides it doesn't want to be as competitive, because it's attracted enough customers in and now, hey, I'm going to drop my rate, because I wanted to try and get lots of customers in, I've got them in, I'm going to drop my rate and cross my fingers that they don't leave. So I always say, when you're getting variable rate savings or easy access savings, you've got to be prepared, monitor your accounts and be prepared to ditch and switch, and switching savings is easy. With fixed rate savings, you're locking your money away generally, although not in a cash ISA, there is access to the money, though you'd pay penalty to get it out, for a set time, so you might fix for two years. Your money is therefore locked in for two years, you can't take it out,

• 27:42Martin Lewis?

  but you get a guaranteed rate of interest that won't move in return for that. And at the moment, you know, you can get a one Year fix at four point five eight percent, which while it's lower than easy access accounts now, if UK interest rates dropped, it may well look good in future. But that's Close Brothers or Virgin Money has one at four point one six as a big name for two years. Oxbridge Bank is four point five three percent. And Tesco Bank is four point two percent as a big name, and that way you're locking your money in. So those are the main big decisions that you will be looking at. As for which the best buys are, well, there are sources out there that will give you best buys on a daily basis, updated by the hour. And that is just, you have to do it on the day you're putting the money in. You, you can't do it in advance. It just doesn't work that way.

• 28:24Speaker 06

  Okay, and Tony says, if you're lucky enough to have a million pounds, where can you put it, given banks only have an eighty five K liability? Tony's asking for a friend, I assume.

• 28:34Martin Lewis?

  Well, let's just be careful because that's not strictly correct. In the event that you have a significant life event, such as selling a property, selling a business, an inheritance, we've done this in a mastermind question before. Then you're actually protected under the Financial Services Compensation Scheme for a million, up to a million pounds in one account for the first six months. So if it were a short term life event thing, you would have protection in one account for up to six months. Generally though, for those people who have very, very large amounts of money to save, my general rule would be spread it. Spread it now. You could say, okay, I'm going to put it in twelve different accounts to cover the million pounds at eighty five thousand pounds each, no more than eighty five thousand pounds.

• 29:18Martin Lewis?

  You have to make sure they're different financial institutions, some financial institutions which are joined, you know, you've got Lloyds and H-Bos, you've got NatWest and RBS. Sometimes they share financial protection, sometimes they don't, so you have to check that out. And there are websites where you can check that out, or you can do it on the regulator's, the Financial Conduct Authority's website, looking at their banking, their banking licenses. But there are easier ways to do it than that, which you can work out for yourself. But. What I would say is, yes, you could spread it and put no more than eighty five thousand pounds in each, and you could probably just about manage that at reasonable interest if you had a million pounds. If you had two million pounds, that starts to get really tricky, because that's twenty four different accounts type thing you're starting to look at. So what I would say then is, spreading mitigates the risk. So even if you then had two hundred thousand

• 30:03Martin Lewis?

  pounds in each account, if you were lucky enough to do so, once you've gone, you know, then you're minimizing your risk just by the simple fact of spreading it and not putting all your eggs in one basket. And each time you spread it, you're protected up to eighty five thousand pounds a pot, so quite a chunk of that money is protected. So it's all on your attitude to risk of how many different accounts you would spread it into. But the basic, you know, like muck, if you've got lots of savings, spread it. And we've got lots more questions on savings to come, but now we're going to move to a couple of different subjects, just to mix it up a little bit.

• 30:36Speaker 06

  Anthony, credit cards are so confusing. I want a credit card to help with my credit score. And for our holiday this year, no idea where to start, what things mean, what to look for.

• 30:47Martin Lewis?

  Okay, so let's go to the very basics of credit cards. Credit cards have two functions. One is a function of transaction, a way to pay for things. And two is a function of debt. You can borrow with them. And therefore, what you do on a credit card is you put money on the credit card and you don't have to pay it off. So you owe the credit card the money and they will usually charge you interest, although there are some zero percent cards that don't charge you interest. Now, we have to be very clear when we're using a credit card, whether we want it for one function or both functions. Those people who just want it for a transaction purpose, and why would you want a credit card for only for spending and not for debt? Well, first of all, because you may get rewards, or it may offer you very cheap foreign exchange rates when you're spending abroad, and because

• 31:30Martin Lewis?

  you get section seventy five protection on a credit card that you don't get on any other form of payment, plastic. And section seventy five protection means on an item costing between one hundred pounds and thirty thousand pounds, the credit card company is jointly liable with the retailer. So if the event, the retailer anywhere in the world went bust, you would be able to get your money back from the credit card company. And in fact, even if an item was faulty, you could choose to go. Back to the credit card company, you wouldn't have to go back to the retailer because it's jointly liable in exactly the same way, including for your consumer rights. And that is very powerful consumer voodoo protection. So you want that. The way that you neuter a credit card to stop it being a debt card, and Adrian, you're gonna have to do it for me this week in my voice, is you pay the card off.

• 32:13Speaker 06

  And full.

• 32:17Martin Lewis?

  I'll take that. You pay the card off in full every month. Because when you pay the card off in full, there shouldn't be any interest, provided you don't withdraw cash on the card. Which is where some cards will still charge you interest if you do that. Make sure you don't bust your credit limit as well. So when you're getting a credit card, the first thing that you need to decide is, am I getting a credit card as a transaction card? In which case I must be paying it off in full, or am I getting it to borrow one? In which case I don't need to pay it off in full, but of course, I should be paying off as much as I can because it minimizes the cost of the borrowing and I'll pay it off as quickly as I possibly can. Now, could you reread the question again, having done that introduction for me?

• 32:54Speaker 06

  Yes, I want it to help with my credit score is the next bit.

• 32:59Martin Lewis?

  And then after that?

• 33:00Speaker 06

  Then want it for our holiday this year.

• 33:03Martin Lewis?

  So to help with your credit score, any credit card would do that. And if you're struggling to get a credit card, you might even go for a credit rebuild or build a card, which is deliberately there to build your credit score. And they are easier to get in all of these cases when you're applying, go through an eligibility calculator, preferably a comparison eligibility calculator that will show you which of the top cards you're most likely to be accepted for without putting a mark that impacts you on your credit file. Because every application you make for a credit card goes on your credit file and can have a negative effect. So we want to minimize applications. And an eligibility calculator allows it to home in on the card that you're most likely to be accepted on. So to build your credit score, any card would do it. Now, in a perfect world, if you could get any card, you'd want one that gave you rewards for spending on it.

• 33:48Martin Lewis?

  Because the way you build your credit score is you put fifty to a hundred pounds a month on the card each month, you pay it off in full. I'm gonna do it as a whisper instead of a shout this time, in full. So you know what I mean?

• 33:58Speaker 06

  Subliminal. I'll keep saying it.

• 34:00Martin Lewis?

  There you go. You pay it off in full each month. We go, and that way, over a year, it should rehabilitate your credit. Now, you said you also want one for spending abroad. Well, the Barclaycard Travel Card is the top credit card for spending abroad at the moment. And that would do all the, that would also rebuild your credit score if you could get one. And it would also get you section seventy five protection. So if you want all those things wrapped up into one, it's that. But the most important warning I would give people when it comes to credit cards, as you want the basics, is people, just like I taught before. There's no one credit card that is best for everything on the market either. Credit cards need to be seen as a bespoke tool. You might want one for zero percent purchases, one for zero percent balance transfers, one for spending abroad. One for rewards in the UK.

• 34:44Martin Lewis?

  And it's perfectly possible, I mean, you have to manage the applications and spread them out to protect your credit score, to have those different cards. And to utilise them for different purposes. The idea of one card fits all is a mistake. So a credit card has a huge range of different uses, some of which we only want to be transactional, so we pay off in full, some of which we want to borrow one. So you don't pay off in full, you pay as quickly as you can. But you need to choose the right card for the purchase. As what you want is to build your credit score, actually, that's relatively easy because all, any card will work in the same way on that. As long as you're putting fifty to a hundred quid a month on it. What you could easily do if you want it for overseas spending is you put fifty to a hundred quid a month on, if you get a good overseas spending one.

• 35:27Martin Lewis?

  Except the month you go abroad when you can put more on it. Putting more on it isn't a problem. I just don't want people to overspend, so. It would still have exactly the same effect of building your credit score. Just make sure you pay it off in full each month, so there's no interest.

• 35:39Speaker 06

  I just wonder whether conceptually we should, you should explain about the need to have a good credit score and this. This oddity that if you're ultra careful, never take credit, never take debt, just pay for everything just in cash and so on. This will ultimately could count against you.

• 35:57Martin Lewis?

  Well, there's no such thing as a credit score in the UK, but lenders do credit scoring when you apply. What I mean by that is you don't have an actual number that dictates what your credit score is. You might be able to go online and get one from the credit reference agencies, but that is just an indication of how a typical lender may see you. It isn't actually material, it doesn't mean anything, that particular number. But yes, you're absolutely right. Credit scoring is based on behavioural prediction, trying to predict how you will behave in future based on your past. So if you have absolutely no credit history, they can't predict how you'll behave in future, and if they have no information, they are unlikely to lend to you. That's why I said if you can't get anything, go for a credit rebuild or build card, because those are the cards that say, hey, you know, we will

• 36:39Martin Lewis?

  give you, pretty much, most people, a credit card. Our interest rates are hideous, credit rebuild card interest rates are way above the typical 25% APR, which is why you must pay the card off.

• 36:49Speaker 06

  In full.

• 36:50Martin Lewis?

  In full.

• 36:51Speaker 06

  In full.

• 36:52Martin Lewis?

  You must pay it off in full each month, otherwise you would be charged a large amount of interest. So yes, absolutely, you're right. But many people, if you've had an overdraft, if you had a mobile phone on a contract, sometimes if you've had gas and electricity bills, you will have enough of a credit file to get yourself a credit card. Of course, they're also looking at what income you have. It's not just about credit scoring, it's about affordability scoring too. If you have the best credit score in the world, if you've got no income, they're probably not going to give you a credit card.

• 37:19Speaker 06

  Nicola, on savings, saving or investing in particular through funds, long term, 20 years, how do you go about investing into a fund? I'm too nervous to actually go ahead and do it, as I don't fully understand it at all. What happens with any money you've saved, invested? You get taxed on it, etc.

• 37:34Martin Lewis?

  Okay, so let's go to the basics on this. It's interesting, I was giving evidence last week at the Treasury Committee about lifetime ISAs. And during that, we were talking about, you know, if you're getting a lifetime ISA as a first time buyer, you probably want it in cash, but if you were going to use it for retirement savings, which it isn't right for most people, but it is for a few, then you probably want to put it in stocks and shares, because you probably want to be investing over the longer period, where you're not going to be, you're not going to have to crystallise getting the money out. And I mentioned at that that I do worry sometimes that because, and I don't think it's unfair of me to say this, I am the biggest voice in consumer finance out there and I don't talk about investing.

• 38:17Martin Lewis?

  That people think that I'm negative on investing and it puts a moss investing because there isn't another equivalent voice out there who goes and champions investing. I only talk about savings because that's my expertise. I don't have an expertise in investing. So let me make it very plain here. I am not anti-investing. I think if you're trying to put money away over the long run and you want it to grow, you know, of at least five years and you want it to grow. You generally have a better chance of it growing quicker if you invest over a wide spread of shares and funds. So you'd use a fund to invest in a wide spread of shares, then you do savings. And I do it myself personally. It's just not my professional expertise. But if you are going to start putting money in funds and you're planning to do it over the long run, well, of course, if you've got lots of money, go and get yourself independent financial advice.

• 39:01Martin Lewis?

  If not, there are lots of good websites like the Motley Fool and Triple I and others that can guide you or. And some of the big share platforms like Hargreaves Lansdown have advice on different shares. An easy place to start is either robo-investing, although the charges can be a bit big, which is. Places like Nutmeg and Moneybox and others who will invest for you and they will choose your investments or. Go and get yourself a tracker fund, a low-charge tracker fund, which simply maps an index, an index like the FTSE one hundred or the FTSE two fifty. Or the S and P or the NASDAQ in the States or wherever you want to invest in and it effectively says. We're going to replicate the whole range of different shares. That there are in that index and we're going to track them. So your money will move up and down as that whole basket of shares moves up and down.

• 39:45Martin Lewis?

  Because of course, when you're looking at risk, investing in one firm is very, very risky. Now, risk is a concept people misunderstand. Risky doesn't mean dangerous. Risky means. You could do very well because it could grow very, very quickly or you could do very badly because it could drop to a stone and it could collapse and you would lose all your money. So it means risk is a measure of variance. The potential variance is much greater, could be much, much better, could be much, much worse. They're putting proper, you know, core savings, don't want high risk. And so putting it in a fund that invests in a spread of shares, you know, the old adage, don't put all your eggs in one basket. And an index tracker that looks at, you know, the FTSE two fifty invests in two hundred and fifty different companies.

• 40:31Martin Lewis?

  Or at least mimics the investment of two hundred and fifty different companies, that would spread your risk. That is, within investing terms, a relatively safe place to start. And just make sure it's a low charge one, but I mean, if you can't find a low charge one, then then just do anything. Start putting your money away and hopefully that will work for you. I'm only giving you broad brush because I don't talk about investing, it's not my thing. But I do think it's actually quite an interesting opportunity for me to say, I'm not anti-investing at all. It's all about your own attitude to risk and go and get an independent financial advisor to have a look at it.

• 41:00Speaker 06

  Jane wants to know whether to save and invest or pay off debt.

• 41:04Martin Lewis?

  In almost every case, unless you have zero percent debt, you your debt is costing you more than you can gain in savings or investments. So let's make this very simple, a typical high street credit card costs twenty five percent interest. The top savings account pays you, let's call it five percent and let's imagine it's tax free. If you have a thousand pounds of debt at twenty five percent interest a year, it's costing you two hundred and fifty quid. If you have a thousand pounds in a savings account at five percent interest, you're making fifty quid. If you were to use the thousand pounds in the savings account to pay off the thousand pounds of debt, you'd be two hundred pounds a year better off. So, provided the debt has an interest rate that is higher.

• 41:46Martin Lewis?

  Then you're earning on your savings, then you are generally, and it's a very broad brush, there's lots of ifs and buts, better to pay off debts than to save. And certainly rather than to take a risk and investment risk with your money if you've got expensive debts. Student loans are a whole different matter because of the way the repayment system works. People will know they tend to quasi somewhere between a loan and a tax, the way that that works, so let's ignore that for now. Mortgages, same rule on mortgages. If your mortgage has a higher interest rate. Then you can earn in savings, then you are better off to overpay the mortgage, providing there are no early exit penalties. Or redemption penalties for paying off the mortgage, and most people can pay ten percent of their mortgage off a year without penalties, but do check. And that you keep a cash emergency fund of three to six months worth of bills aside.

• 42:31Martin Lewis?

  Then you're generally, if the mortgage rate is higher than you can earn on savings, better to overpay the mortgage if the savings rate's higher. Then you could save.

• 42:39Speaker 06

  Do you want to do that thing that you do to me?

• 42:42Martin Lewis?

  Oh, is it that time?

• 42:43Speaker 06

  Yes.

• 42:43Martin Lewis?

  Wow, I was enjoying myself. Yeah, let's play the theme tune. I'll have a sip of water.

• 42:55Martin Lewis?

  Welcome to Money Mastermind. The current score, Adrian, you're like a store that you can buy from any time. Is Adrian has seven correct and 11 wrong in this three option, multiple choice mastermind, which is slightly better than random chance. So I'm quite proud of him for that. It's a relatively short question today, Adrian. They say less is more.

• 43:16Speaker 06

  Who does?

• 43:18Martin Lewis?

  They do.

• 43:18Speaker 06

  Right, okay.

• 43:19Martin Lewis?

  So I'll do it with today's intro. Adrian, for you, is less more or is more less? That is your question. If someone is taking a personal loan out, they've got a great credit score and income, so they will be accepted for the market's best buy. Which of these loans would at the moment involve the lowest total repayment? Do you understand the question?

• 43:43Speaker 06

  I do.

• 43:44Martin Lewis?

  A, a loan for £4,750 over five years? B, a loan for £5,000 over five years? Or C, a loan for £5,250 over five years?

• 44:00Speaker 06

  Which will, oh God, so which will end up costing?

• 44:05Martin Lewis?

  Which will you have a lowest total repayment on? A £4,750 loan, a £5,000 loan, or a £5,250 loan all over five years? Which would you pay back the least money on if you borrowed it today and you got the best rate on the market?

• 44:22Speaker 06

  So you, sorry, I'm not being awkward, but do you mean the interest you're paying on it?

• 44:27Martin Lewis?

  No, the total repayment. How much money would you pay back in total? An easy way to do that, to make it easier conceptually, which would have the lowest monthly repayment? Because you're repaying them all over five years, 60 months. So whichever you repay less on a month is the one that is cheapest for you.

• 44:42Speaker 06

  Okay.

• 44:42Martin Lewis?

  Well, a £4,750 over five years?

• 44:45Speaker 06

  Yeah.

• 44:46Martin Lewis?

  £5,000 over five years or £5,250 over five years?

• 44:50Speaker 06

  Okay.

• 44:51Martin Lewis?

  There's obviously, I mean, I, I, clearly there's an issue going on here.

• 44:55Speaker 06

  There is, there is. So I, I, look, I know the answer can't be the obvious one.

• 45:01Martin Lewis?

  Which is? What's the obvious one?

• 45:02Speaker 06

  The obvious one is the least, for the least demand. I know that's wrong, but I've been in this studio for 90 minutes. I haven't had a toilet break, I haven't had a glass of water and I haven't had a cup of tea, so I am. My already slow brain is fogging up, so I, I'm just gonna submit myself to being wrong. The, uh, it, it, the, the lowest one.

• 45:23Martin Lewis?

  So you're gonna go for A, that a loan for £4,750.

• 45:26Speaker 06

  I know it's wrong, but I can't think why it's wrong, and now you're gonna tell me.

• 45:29Martin Lewis?

  Okay. Well, let's start, let's break with tradition and start with the sound that you don't want to hear, please. You are correct, it is wrong.

• 45:39Speaker 06

  Okay, I shouldn't get a point for being correct about being wrong, shouldn't I? Anyway.

• 45:43Martin Lewis?

  The, the, the point here is when it comes to personal loan rates, there are thresholds at which the interest rate drops. There tend to be £2,500, £5,000, £7,500, and there can be smaller ones in between. But at those nodes, the interest rates that are available get cheaper. And the time it tends to work biggest is at £5,000. So, if you're borrowing £4,750, the cheapest loan on the market is 9.9% representative APR, or it was when I started this morning. Whereas if you're borrowing at £5,000, the cheapest rate is 7%.

• 46:26Martin Lewis?

  If you're borrowing at £5,250, the cheapest rate is 7%. Now, when you do the maths, if you borrow £5,000, if you borrow £4,750 over five years at 9.9%, that is, you're gonna be paying £100 a month on it, which is a total repayment of £6,041, including some rounding. But if you borrow £5,000 at 7%. The repayment is only ninety nine pounds a month, a pound a month less, and the total repayment is five thousand nine hundred and forty pounds. So actually a hundred pounds, you'd pay back less borrowing, even though you're borrowing two hundred and fifty quid more. Five thousand two hundred and fifty pounds, which I threw in as a red herring, well, that's more expensive than both of them because you're borrowing more and it's the same rate as five grand. So the correct answer is it is currently cheaper to borrow five thousand pounds over

• 47:11Martin Lewis?

  five years at the top rate than it is four thousand seven hundred and fifty pounds. And that is generally always true. The numbers vary depending on the rate differential between each of those thresholds. But if you're about to borrow nearly a threshold, two thousand five hundred, five thousand, seven thousand five hundred, it's often worth borrowing a couple of hundred quid more, which I would always put towards repayments because you want to get rid of your debt as quickly as possible, because the total your repay is actually less. Now, I could have done it even more by focusing only on the interest you'll pay, in which case you'd have probably gone down to about four thousand six hundred. You'd still pay more interest than borrowing five thousand pounds because of the different interest rate. But I'm just going on total repayment. So it is a bizarre quirk of the

• 47:54Martin Lewis?

  thresholds in personal loans, that if you're near a threshold or you're near the next threshold where interest rates start to get cheaper, more is less, rather than less is more. Generally, when it comes to loans, I would always say minimize your borrowing, minimize the amount that you're borrowing. But at a nearer threshold, it works the other way around. Does that make sense?

• 48:12Speaker 06

  It does make sense. I get it. I didn't listen. I should have interrogated you on the interest rate being the same. But then, anyway, but I think I performed a useful service.

• 48:22Martin Lewis?

  Yeah, it's a useful idiot. That's the phrase, isn't it?

• 48:25Speaker 06

  Yes, that is it. Lee Dixon, the footballer, used to call me his idiot filter when we were going through.

• 48:32Martin Lewis?

  You're actually a very clever man. And these masterminds are deliberately set up so that I'm going to tell people a piece of information that they wouldn't necessarily have known for themselves, because that's the whole purpose of doing them. So it's quite tough to expect you to know them. But the score, Adrian, in case you're wondering, is Adrian Charles, seven right and now twelve wrong. We're starting to get back close to that random chance thing.

• 48:55Speaker 06

  Travel insurance. I booked a cruise for September 2026. Can't get travel insurance. The online portals don't allow you to input a date that far in advance. So what can I do?

• 49:06Martin Lewis?

  You're quite right. They generally don't, but they are some, there are some firms that do. Off the top of my head, the ones that allow you on single trip insurance to book over a year ahead are Stay Sure, Avanti and Aviva. And this is because I always do my warning, book travel insurance ASAP as soon as you book. If you have booked and you don't have travel insurance, get your travel insurance now. Because half of the purpose of travel insurance is to protect you from things that happen beforehand to stop you going. I think Aviva allows you up to two years. So that's the longest one that would probably cover you. So it's about finding the right firm. Stay Sure, Avanti and Viva, off the top of my head, though.

• 49:44Martin Lewis?

  Okay, I'm now joined by podcast producer Simon. We're going to do a few more of your Q and A's effectively. I'm going to try and focus not so much on the savings ones now in the podcast extra. But I don't think we're going to do too long because I'm not sure how much longer my voice can hold out. So Simon, over to you. What have you got for me?

• 50:02Speaker 07

  Yeah, I thought you were getting sponsored by Barry White midway through. Yeah, you held it all together well.

• 50:06Martin Lewis?

  Save first, save last, save every penny. Move on.

• 50:13Speaker 07

  We actually got sent this voice note from Maxi. Hello, Martin. I've heard you say before to pay off credit card debt first before saving. I also know the sensible thing is to pay off your credit card every month. But how do you pay off credit card debt which has accumulated while making sure you have

• 50:29Martin Lewis?

  the liquidity for emergencies, like for example, a boiler or something? What's the best way to pay down the credit card debt and maximize savings for emergencies at the same time? Maxi, you are quite right. I do always say you should absolutely prioritize paying off expensive credit cards before savings. And you asked me about liquidity, but I'm actually more concerned about having funds to pay. And I make that difference quite deliberately. So let me give you a scenario which I think will explain this. Imagine you have £2,000 of debt on an expensive credit card that's accrued, and you have, you want £1,000 in savings, or you're planning to put £1,000 in savings. In the way you're explaining

• 51:13Martin Lewis?

  it, you can't use that savings to pay off the debt because you want to keep that savings aside as an emergency fund. Now, I'm in favor of emergency funds, but not while you have credit card debt, and here's why.

• 51:23Martin Lewis?

  Take that thousand pounds and pay it off the credit card. Your situation before was you had two thousand pounds of debt and one thousand pounds of savings and net one thousand pounds. Your situation now is you have a thousand pound debt on the credit card and you have no savings. So what happens in the event of an emergency? Well, in an emergency, you've got a thousand pounds of room on your credit card and you go put it back on the credit card again. Now, that would leave you in no worse a position than you were in before. Because you still had two thousand pound credit card debt before. But in the meantime, if there isn't an emergency, you've got a thousand pounds less debt on your credit card. That is you're being charged twenty five percent interest on, which means more of your money that you're earning isn't having to pay the debt interest. And it means you're better off.

• 52:06Martin Lewis?

  So by paying off the credit card, you're still leaving yourself room to use those credit cards if you had to in an emergency. I mean, make sure it's a real emergency, but in the meantime, you're saving on them. So think about it as what access to funds would I have? Or borrowing would I have in the event of an emergency? In in your specific situation of of paying off credit card debt. I hope that makes sense. What's next, Simon?

• 52:29Speaker 04

  I'm a little bit concerned about your voice, Martin, so we'll try and run through a few quick ones. Mikey's been in touch, my dilemma, his dual energy contract is ending soon. He usually fixes, but selling his house, British Gas say fix and pay a one hundred pound exit fee when he leaves. But won't it be cheaper to allow variable rates until he moves? The house is yet to sell.

• 52:49Martin Lewis?

  The vast majority of fixes on the market are portable. So I would check that that British Gas one isn't portable. Portable means you can take it with you when you move. In general, Scottish Power and OVO don't have portable tariffs. But they will let you leave exit penalty free if you fix and you move house. The rest will charge you an exit penalty if you if you want to leave your fix when you move house. But we'll usually let you take the fix with you. So I would check your terms of that British Gas tariff you're looking at to see if you fix now, whether you could take it with you. And if that one won't allow you, there are many others out there that are portable. That's the key phrase, i.e. move house and the fix can come with you.

• 53:24Speaker 04

  Ronnie wants to know about balance transfer credit cards. He doesn't understand them. He has three credit cards he's trying to pay out at the moment.

• 53:31Martin Lewis?

  Okay, a balance transfer is really, really simple. It's called a balance transfer credit card. It's actually a credit card that offers a balance transfer deal is probably a better way to phrase it. A balance transfer deal is where you get the new card. You then give the new card the details of your old card. It pays them off for you up to the credit limit or normally up to 90% of the credit limit. And now you owe the new card instead. But at whatever that special balance transfer deal is, which currently the longest balance transfer is up to 33 months, 0% with a 3.45% fee. So you could be interest free until 2028, which is hopefully give you enough time to pay it off. And because it's now interest free, that means more of your money clears the actual debt you owe rather than just services the interest. A balance transfer deal is just a way of effectively shifting debt from one card to another.

• 54:16Martin Lewis?

  You apply to the new card, you tell it what you want it to pay off because it has to do it. You can't pay it off yourself, it has to be part. It's a special balance transfer mechanism and then it just pays off your old cards for you. Hope that makes sense.

• 54:28Speaker 04

  Sarah wants to know, how do you get Toyota to reply to repeated emails about car finance commission stuff? She knows they've seen it because she was copied into an email been forwarded on to a dedicated email address, but nothing else in over a year.

• 54:42Martin Lewis?

  Now, because you've been doing it for over a year, I assume this is about discretionary commission arrangements where car dealers could increase the interest that they charge people in order to earn more commission, but they weren't telling people they were increasing the interest. And that's the big campaign and I've had over 2 million template letters on that one. Some firms are really bad at responding. But because you told me I was copied in on it being forwarded to a dedicated email address, that means they have definitely received it. And the most important thing is they've received it and it would have been logged at the time they received it. It is incredibly frustrating that they haven't replied to you. But frankly, until we know what the regulator is going to say in May, while it's nice to have a reply, what's more important is that your complaint has been logged and it was logged when you first complained and you got through under the line.

• 55:26Martin Lewis?

  So I would swear a little bit and stamp your feet a little bit about, you know, the fact that they haven't got back to you. But I don't think it's going to make a material difference to what happens in the end and whether you get paid out or not. So I wouldn't worry too much.

• 55:37Speaker 04

  Bridget, she has said, can she have some advice on inheritance tax for single people or common law couples would be helpful? Currently, if you're single or in a common law partnership and child

• 55:47Martin Lewis?

  Your house and your savings will fall prey to inheritance tax if your estate is above three hundred and twenty five thousand pound threshold. She sees that as an inequality in social engineering. You are one hundred percent correct. It is an inequality. Unmarried couples, even if they've been living together twenty year and have ten children, do not have the same status in inheritance tax law as married couples. Honestly, I mean, I could comment on it, but that's pointless. The solution is get married. And if you have a an objection to getting married, which many people do for various reasons, it's got a lot of baggage with it, or they see it as a paternalistic institution or whatever you like. Then anybody can now get a civil partnership. A civil partnership is effectively a marriage without the baggage.

• 56:29Martin Lewis?

  It gives you exactly the same rights as married couples, but you can just do it. It's a legal way of. If you choose, you don't even have to do a particular ceremony on it, you know, you have to go and sign it and do that, but you don't have to make it a big deal. It's a contract that gives you the same inheritance tax rights as a married couple. And you may not like my answer, but my answer is. You can do political campaigning to change the way it works. I don't see that happening. I don't see it happening very quickly. So if you want to sort this. Then I would be looking at getting yourself a civil partnership, which should do the same thing. Just to very briefly explain what's going on for the people who don't get it. There are two big perks to marriage or civil partnership under inheritance tax. The first is you can leave anything you like to your spouse and there is no inheritance tax to be paid on it.

• 57:11Martin Lewis?

  The second is you can also leave them your unused allowances. Now, the two main allowances people have. Are you're allowed to leave up to three hundred and seventy five thousand pounds and there's no inheritance tax to be paid. And then there's up to one hundred and twenty five thousand pounds people can leave if they're leaving their main property as well to their descendants. Now that would be children. Stepchildren or step grandchildren or grandchildren or adopted grandchildren or foster grandchildren. It has to be direct descendants. So what that means is if you die and you leave everything to your spouse. Then your spouse has both of your three hundred and twenty five thousand pounds, so that's six hundred and fifty thousand pounds allowances.

• 57:50Martin Lewis?

  And both of the hundred and twenty five thousand pounds if you're leaving your house to your direct descendants, your primary residence to your direct descendants. You can leave a million pounds of assets without it having any inheritance tax. If you're unmarried in the same circumstance, then you'd only get £500,000 you could leave without it having any inheritance tax. You can argue that is absolutely a bias and inequality within the system. It is. It's a very well-known one. And the only answer is either get married or get a civil partnership. That's all I can provide for you, I'm afraid. And that brings us to the end of the question and answer special. In which case, I will say, I do hope you've enjoyed it this week. I hope my croaky voice hasn't disturbed your listening. If you have enjoyed it, please tell friends and do remember, why not subscribe? We tend to put out a new podcast every Thursday.

• 58:34Martin Lewis?

  If you haven't enjoyed it, maybe it's just because you liked hearing me struggle to push my voice out in its croaky gravelly nature because you have a sadistic bent. Then again, that does mean you really enjoyed the podcast. So I win after all.

• 58:51Martin Lewis?

  See you soon.

• 59:49Speaker 02

  It often starts with a question. What were lines doing in York in the third century? Why was Jeremy a lonely snail? Then we search for answers.

• 1:00:00Speaker 03

  It's one of the first times really that you consistently see someone painting teeth. I know that sounds bonkers.

• 1:00:04Speaker 04

  If I was going to define mathematics, I would say it's the study of structure.

• 1:00:08Speaker 02

  As I was doing the research for the programme, my jaw just dropped further and further down. In Our Time is a world-class seminar every week. Watch the discussions unfold and explore over a thousand conversations in our archive. I'm Misha Glennie and every week I'm joined by expert guests to explore the ideas that shape our world. In Our Time, listen on BBC.com or wherever you get your podcasts.

• 1:00:38Speaker 02

  Coffee? Love a cup of tea.

• 1:00:40Speaker 03

  I'll have tea too.

• 1:00:41Speaker 02

  Tea for me, please.