Pod Insights The Martin Lewis Podcast Beat the energy price hike, flight delay compo, and the £1 train! About this episode Martin has everything you need to know to keep your bills down ahead of the energy price cap going up in October. Also in the podcast: what to do if you’ve had a flight delayed in the past six years, you tell us the best quid you’ve spent in the last five years, and Mastermind was all about Capital Gains Tax – have you heard of the ‘Bed & Breakfast’ rule?
Transcript 12,783 words · 8 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:46 Speaker 03 BBC Sounds, music, radio, podcasts.
1:49 Martin 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 my BBC Radio 5 live show with Adrian Charles, but there's also bonus money-saving tips just for you, lucky, lucky podcast listeners. In today's pod, the energy price cap is going to rise 2% in October, increasing bills for two thirds of homes in England, Scotland and Wales. So I'm going to take your questions on it, from whether to fix now to solar panel tariffs, EVs and more. And one person listening live saved over 700 quid a year. Plus, as we're back from the summer break, you may have gone abroad and had a flight
2:29 Martin Lewis? delayed or cancelled. If so, you could be entitled to up to 520 pounds per person fixed compensation. And in fact, it doesn't just have to have been this summer, you can go back up to six years on this. This week's tellers is all about what's the best quid you've ever spent? One man bought a train. Yes, a train, not a train set, a train for a quid. Mastermind is all about capital gains tax for selling shares. How well do you know your capital gains tax rules? And Adrian surprised me with a question about a ripped banknote. It's my first one back. I hope I'm not too rusty. Let's play the theme tune.
3:22 Speaker 05 Mama Martin, how the devil are you?
3:24 Martin Lewis? I'm very well, Adrian. I hope you can hear me.
3:27 Speaker 05 I can hear you.
3:28 Martin Lewis? I walked into the studio today and it was black, every monitor off, all the faders down.
3:33 Speaker 05 Never a good sign.
3:34 Martin Lewis? Was not working. I have absolutely no idea. Thankfully, some good tech chaps have come and fixed it. Although if I can say to your people on sound, I'm hearing myself reverberating back. Even I don't need to listen to myself twice.
3:46 Speaker 05 That's so distracting, that. Anyway, is it gone yet?
3:49 Martin Lewis? Yes, it's gone. It's gone. We're good. We're good. But that's not what we're here to talk about today.
3:54 Speaker 05 No, it's not. But I'll tell you what, I sent you a WhatsApp a minute ago.
3:58 Martin Lewis? What was that?
3:58 Speaker 05 With a picture of a 10 pound note, which inexplicably I found in my wallet, torn in two.
4:05 Martin Lewis? Oh Adrian.
4:06 Speaker 05 Yes, what do I do? How do you get that? Can I, what do I do? I want it. I want, I don't want to just wave bye bye to it. Can I save it? Can I take it somewhere?
4:15 Martin Lewis? The official answer is, from memory, I believe, the Bank of England has a form on its website for damaged, damaged notes. And you can send the note in and as long as it's recognisable as an official note, you will get the money and you will get a new note in return if you send it in. But what is it? Is it just, is it just a straight, clean rip?
4:37 Speaker 05 Well, no, it's not. Have, have, have, have you got your phone on you? If you ever look at your WhatsApp.
4:42 Martin Lewis? Well, that doesn't help the listeners, Adrian. That doesn't help the listeners.
4:44 Speaker 05 Well, between us, we can, we can, we can get some adjectives together.
4:48 Martin Lewis? Adrian, oh god, yes, it looks like a straight, it's a £10 note. It's got, is it a paper, a plastic note or a paper note?
4:55 Speaker 05 No, it's a plastic. It's a plastic one.
4:57 Martin Lewis? So it's the rip to me.
4:59 Speaker 05 It's wonky. It's a kink in it.
5:01 Martin Lewis? Well, it doesn't, not that kinky. You're not that kinky. It looks, it looks to me like if you joined it together and sellotaped it, it would fit pretty well. And I think you, you can do that. I'd use some clear sellotape, or sorry, or other brands are available. I'd use some clear sticky tape, put it together. And I think many shops would accept it, but if they don't, then you send it into the Bank of England.
5:24 Martin Lewis? Now, by the magic of podcasting, later on during the news break, I looked up some specific rules about ripped banknotes. But I thought I'd bring them earlier, so it's all in one place in the podcast.
5:36 Martin Lewis? There's a lovely little line in there, which I thought was quite interesting. On the Bank of England website, it says, "A damaged banknote is a genuine Bank of England banknote that has been accidentally torn or damaged. As a general rule, we will only reimburse you with the face value of a damaged banknote if you still have at least half of the banknote", which of course makes sense because otherwise you could rip your banknote in half or just, you know, not quite in half and send both bits in and ask for a refund on both bits. So your banknote that was ripped is still completely integral. And if a shop won't take it when you sellotape it together, then you can claim for a damaged banknote from the Bank of England.
6:17 Speaker 05 But I'm getting tech saying all you need to do is go to any UK bank and they'll change it.
6:22 Martin Lewis? They generally will, but you don't have a right. You have the right at the Bank of England.
6:25 Speaker 05 Okay, right, got it.
6:27 Martin Lewis? I mean, I wouldn't even get that. I think you just go and sell it, tape it together. From the picture you sent me, it is an integral banknote that has just been ripped. So you should be able to put it together or you take it into your bank. All of that should work. But the official answer is the Bank of England.
6:41 Speaker 05 Okay.
6:42 Martin Lewis? And please let us know next week how your £10 note voyage of recovery goes.
6:46 Speaker 05 I will. I'll keep a diary throughout the week.
6:49 Martin Lewis? Please.
6:49 Speaker 05 On how that goes.
6:50 Martin Lewis? Day by day.
6:51 Speaker 05 Right, so.
6:52 Martin Lewis? Do you know what? I mean, I shouldn't say, I think you've just got another column for the newspaper agent.
6:56 Speaker 05 Yes, oh, I've got 350 words as absolutely suggested and all of them, they've just come flooding into my mind already.
7:07 Speaker 05 We went into energy bills in a second, but flight delay compensation.
7:10 Martin Lewis? Yeah, so I just wanted to remind people of these rules because many people have had a delayed or cancelled flight over the summer. Not because there was a particular problem going on, but more just because people were going away over the summer and it's the prime getaway time. And these rules are worth remembering all the time. If you have a delayed or cancelled flight, you may be due fixed compensation of up to £520 per person. And as I said a moment ago, you can go back as far as six years in England, Wales and Northern Ireland, as long back as five years in Scotland due to the statute of limitations being slightly different. Now, these are the key rules to know if you potentially qualify for compensation. If you have a delay on your flight, you of course are entitled to carry on the flight.
7:55 Martin Lewis? If it's cancelled, you should always, regardless of circumstances, either be offered an alternative flight, either on the same airline, or if it is more efficient and better for you, it could be on another airline, or a full refund. But this is about compensation on top and the compensation on top is due in the following circumstances. First of all, this must be a UK or EU regulated flight. So that is any flight that has departed from a UK or EU airport. Or any flight arriving at a UK or EU airport, but then it must have also been a UK or EU airline. So if you flew from New York to London on British Airways,
8:40 Martin Lewis? it is an EU regulated flight. If you flew from New York to London on American Airlines, it is not a UK regulated flight for these purposes. If you flew to New York from London on any airline, it's always an EU regulated flight because when you're leaving the UK, every flight is EU regulated. Did that make sense? It made sense. Right. Next, to count as delayed, you must have landed three or more hours late. Your takeoff time is irrelevant. The time that you land is late. And if we want to be really time critical and tempted on this, it's when they open the doors. So if they're
9:21 Martin Lewis? opening the doors over three hours late to get you off, then you have a compensation right. If it's a cancelled airline, they need to have cancelled it less than 14 days before it was due to fly. If they cancel longer before that, it's deemed that you have been given sufficient notice for a change of circumstance. In the cancellation route, the amount of compensation you get depends on exactly how delayed it would have been compared to the original flight and the distance that you're flying and the distance you're flying always counts. So that's the actual amount of compensation. And then the big one, it must have been the airline's fault. So bad weather doesn't count. Issues
10:00 Martin Lewis? with air traffic control doesn't count. Airline staffing or servicing issues do count. Knock on delays from previous flights being late generally do count. Airlines will always try and give you the idea that it wasn't their fault, but whether that is actually within the rules or not is difficult. So you always need to try and listen to what the reason for the delay was. And often their official reason is slightly different to the one that you're told, but there's alternative dispute resolution processes in this. And as I say, you're sort of starting the compensation at around the £200 per person. Level for a short flight, up to five hundred and twenty pounds for a long flight. So if you're a family of four, you're talking between eight hundred quid and two thousand pounds.
10:45 Martin Lewis? Compensation on top of the delay. Now, on a moral basis, I would always say on this point. Look, if if everybody goes for this and it happens all the time, we could make airlines go bust. So if you were three hours and one minute delayed, it didn't make any difference to you. You had a fun time in the airport bar before you went. And you were having a nice time at the airport and it wasn't a problem, then maybe just don't bother doing this, even though you've got a right. If however, you know, you had your kids sleeping on the floor of the airport for ten hours, it was an absolute nightmare and hell on earth. Then know that you have these rights and go and enforce these rights and get your compensation. So you make a formal complaint to the airline generally, and if the airline rejects you, then they should, most of them.
11:27 Martin Lewis? Have an alternative dispute resolution process, which is like an independent arbiter. That you can go to if they reject you, that should make an independent decision. And that is a summary.
11:36 Speaker 05 Okay. Vicky's had a torrid time. There was a flight delay in Birmingham on the sixth of August. And we've been refused compensation due to extreme circumstances with the delay, but. We were delayed again the morning after due to a technical fault with the plane. Chewie refused and told us to contact ADR, Alternative Dispute Resolution. Which I have done. In all, the full delay was eighteen hours and thirty minutes. What should I do?
12:07 Martin Lewis? Well, it sounds like you've done exactly the right thing. I mean, you haven't said what the exceptional circumstances and that generally is the carve out. That it's not the airline's fault for the first delay was, but arguably, a technical fault on an airline. And I need to say, I use the word arguably specifically and deliberately. This is always something that somebody needs to adjudicate and it will be depend on case by case. But arguably, if the airline has a technical fault, then that is due to the airline not maintaining its planes adequately. So that they can't fly and it has an has a fault. So you would say that's the airline's fault. And the second delay, I think what you're saying is your first plane was delayed. So they put you on another flight and you had a second flight that was delayed. That second delay sounds like it was certainly the airline's fault.
12:52 Martin Lewis? And therefore, that's the one I would be arguing on. And you definitely arrived over three hours late. So I would, you've done exactly the right thing. The airline rejects you, you go to the alternative dispute resolution process, you put your case forward. And it may well be adjudicated in your favour. So you have done everything that you can do at this point.
13:11 Speaker 05 Harry, Sam's had a flight delayed by five hours. He said due to yobbish behaviour with the police involved. Well, is that the airline's fault? And it was booked through Tuoi, but it was an EasyJet flight. So who do we contact? Tuoi says EasyJet, says Easy, says EasyJet, says it's EasyJet and sent forms to fill in. EasyJet says Tuoi and forms to fill in. You know, can it be any simpler this? Will there be compensation somewhere?
13:41 Martin Lewis? I doubt it, is my answer. It seems to me, and again, it's case by case. One would argue yobbish behaviour and the police being called and the police saying the plane can't take off would not be deemed as being the airline's fault. And they would be able to argue that it was not their fault. And that's probably fair that it wasn't their fault. It was the fault of the yobbish behaviour that was on the plane that needed the police to be called. And if it is not the airline's fault, you are not entitled to the fixed compensation. As for who you go to, well. Were it the airline's fault, so let's just go it so it helps everybody. Then even though you booked through a tour operator, you would generally complain to the airline.
14:23 Martin Lewis? Because this is derived from EU Regulation 261/2004 that's now been put into UK law. And that's about the airline. So you go to the airline. Were it not the airline's fault, which we think it isn't in your case, although I cannot adjudicate that because I only have a very, and I'm not a judge, I don't have that ability. Then you're probably looking at going to the package holiday directive for if it has any compensation due to your delayed flight. And therefore that would be with Tuoi because that's your tour operator under the package holiday. So you wouldn't be getting the compensation that I've been talking about under the specific airline regulation compensation. But you might want to make a complaint under the package holiday directive that the holiday was not as you wanted. But that again is, it is a purely case by case thing.
15:06 Martin Lewis? I mean, what I would always do, once you're, once we're on the soft ground of grey areas as opposed to the hard ground of law. I would always sit there and think. What do I want? What is it that you want to come out of this? I think the fixed compensation under the specific act is unlikely. So work out what would I like to make this better for me? And then I would probably in this case, take it to the tour operator and request that they do that. It might be you want a voucher off a future holiday because of the disruption that you had, and that is of course cheaper for them than giving you actual cash. You have to make that decision for yourself, but always one complaining. It always amazes me when some people get in touch with me about complaining and they say the complaint letter, and they've sent a complaint letter, but they've not put in
15:51 Martin Lewis? it the resolution that they want. And therefore you're giving that away to the firm. If you put the resolution that you want in, and that resolution is one that is not particularly painful for the firm, and they go, well, we could just slam dunk solve this by giving them that, and that's not that expensive to us, you're far more likely to have it sorted quickly. So always put what you want in however you're complaining. In this particular case, if it were under the specific rules that I gave you before, then you're entitled to fixed compensation. But as I think we're out of that, that's why I'm saying it.
16:20 Speaker 05 Okay. I see a couple of questions coming by text, interestingly. Somebody had a flight cancelled by BA, offered a new BA flight the following day, but needed to get home on that day, so couldn't wait. So booked an alternative flight with Ryanair. Will BA cover the cost of the Ryanair flight? Or do they have to? I suppose is the question.
16:45 Martin Lewis? BA, you should have told BA you want a refund for your original flight. So you should have got a refund for your original flight. Now, the question, what I don't know is if you're saying, does that refund cover the Ryanair flight? Or are you telling me that the Ryanair flight was more expensive than the BA flight? If it was, then you could have an argument that there's a consequential loss because you had to do this. But that is a much more difficult fight depending on circumstances. Remember though, if the delay...
17:14 Martin Lewis? And the alternative flight that you get due to the cancellation falls into the criteria that you would have got there later, which it would, you're probably entitled to fix compensation if it was the airline's fault. So there's a lot missing in the question for me to be able to answer it, but hopefully that gives you an idea.
17:30 Speaker 05 And just finally, on this business with flights being booked through an EU airline, BA is obviously classed as EU, but Lee in the eye of what-
17:40 Martin Lewis? It's actually UK or EU.
17:42 Speaker 05 UK or EU, yeah. He booked a BA flight, but it sounds like it was American Airlines code share. But it's booked through BA, so does that count as BA even though it's American Airlines?
17:55 Martin Lewis? No, it's generally the airline operating the flight that counts. So you have to be slightly careful on code shares. And let me just give a wider point. What I have given you is the UK slash EU regulations that count for most flights from the UK or most flights coming to the, all flights from the UK or flights coming into the UK through UK/EU airlines. Other countries may have their own rules. So what it means if it's American Airlines is you have to look at the American compensation system and to see what you're entitled to under the American compensation system. Though I have to say, the UK/EU one is particularly strong. So you're generally better to go under that one.
18:39 Speaker 05 On energy bills then, we got the new energy price cap announced last week, it's going to go up 2% in October. I suppose we need to do our, how often is this, is this every quarter, is it?
18:51 Martin Lewis? Yeah, it's quarterly, yes.
18:52 Speaker 05 Okay, your quarterly reminder on what the energy price cap basically isn't.
18:59 Martin Lewis? Well, the energy price cap is a pants cap, as I like to say. So the energy price cap is the price that you are on if you are on your energy firms, your energy retailers' standard tariff, the do nothing tariff, the tariff if you are not on a fix or you are not on a special deal or you have come off a fix and you have not done anything. If you're on that, then you are on the energy price cap, just to really- Ramp this home and to be really specific on this of the big companies. British Gas is called its standard variable tariff. E D F is its standard variable. Eon Next is the next flex. Octopus is the flexible octopus. And OVO is the simply simpler energy and Scottish Power is the standard tariff.
19:44 Martin Lewis? If you were on one of those or any other company's standard tariff, then the price you pay is dictated by the regulator of Gen. And it is technically the maximum amount that they are allowed to charge you on the standard tariff. But the vast majority of firms charge you the exact maximum. Now, while we talk about and while these lots of figures are banded around, what's actually happening is in each region for each payment type. There is a maximum amount for the standing charge, the daily charge that we pay just for the facility of having gas and electricity. And a maximum amount for the unit rate. That's the cost for each kilowatt hour, which is the measure of energy that you use, that you use in total.
20:28 Martin Lewis? So there's a standing charge and a unit charge and it's capped. I'm going to give you now, because people do like these, what's happened to the direct debit average over the UK. Though remember it is regional.
20:42 Martin Lewis? On the first of October, for electricity, the standing charge, the daily charge will rise four and a half percent. From around fifty one and a half pence to just over fifty three and a half pence. The electricity unit rate will rise from twenty five point seven per unit up to twenty six point three per unit, which is a rise of two point four percent. On gas, the standing charge has risen enormously in percentage terms. It's going up from twenty nine point eight P to thirty four P, which is a rise of fourteen percent. Though the unit rate on gas has dropped from six point three three P to six point two nine pence.
21:24 Martin Lewis? So for someone who has gas and electricity and uses not too much gas, but has gas as a facility. They're going to see a bigger rise than the average two percent rise. And you know, there's all types of combinations for someone who is electricity only, they're going to see around. For someone who uses a lot of gas, they're going to see a lower rise. So it all is a little bit complicated, but the average rise we're seeing is two percent.
21:51 Martin Lewis? And that that is happening, and let me carry on. So that is, and that is, you're on that if you are on the price cap. That if you are on one of those tariffs, you are on that amount. Oh, I'm out of, can you tell I'm out of shape? I've been off for a few weeks and I'm just, I'm not quite as sharp as normal. Forgive me, everybody. I'm going to try and get back into it. Yes.
22:09 Speaker 05 Um, why the, Bill says, why are the price cap prices always quoted as an average household? It's meaningless. It'd be more to the point to quote it as a maximum per kilowatt hour.
22:19 Martin Lewis? Well, that's
22:20 Speaker 05 To enable meaningful comparisons.
22:22 Martin Lewis? That's exactly what I've just done, but it it wouldn't be more relevant to quote it as a maximum per kilowatt hour, because unfortunately, it is about the interrelation between the standing charge and the unit rate that dictates it. Now, what Ofgem has traditionally done is it has given us this typical use figure, which it has this year said, as this time has said, from July is rising from one thousand seven hundred and twenty pounds a year to one thousand seven hundred and fifty five pounds a year for the October price cap. So a rise of thirty five pounds per year. But I have complained that that is an absolute load of nonsense for two reasons. One, nobody is on the typical use figure. You know, if you actually went, who is on exactly the typical use amount? You know, you're probably finding there may be one or two people out there, but almost
23:07 Martin Lewis? everybody else isn't on a typical use figure. But far more importantly, this is a three month price cap, and they quote an annual usage. So to say the price cap is rising from one thousand seven hundred and twenty pounds a year to one thousand seven hundred and fifty five pounds a year, but it's only at that price for three months. What you would actually have to say is, if we were to extrapolate this and that price were to stay over the entire year, even though it won't, it'll only last for three months, then the price you would pay at that rate would go from one thousand seven hundred and twenty to one thousand seven hundred and fifty five pounds. Which is why I have always, when I've done this and done my analysis, I have always relied on using the percentage change figure. So for me, the best way to think about this is the price cap is rising
23:52 Martin Lewis? by an average two percent in October. So for every hundred pounds you are paying for energy now, typically in October, you will pay £102. And what was very interesting, for the first time in Ofgem's press release this year, they led on that 2% figure, mainly because every time they've announced this for the last two years, I bash them around the head verbally, by just saying it's a nonsense to do it that way. And they have actually, they've backed down on the typical use figure. Although, there are times it is interesting. And so, maybe I'll put it into context for you. If I want to tell you what's happening to prices over the next year, what is predicted to happen,
24:34 Martin Lewis? I could explain it by saying, the current price lasts till the 1st of October, then it will go up 2%, it's then predicted to go down 1.8% in January, up 5.4% in April, and up 0.8% in July. Now, the problem with that is when you quote percentages and you're looking at them cognitively as they're moving across, it's quite difficult to work out what's going on. If I do the same thing now by quoting typical use figures,
25:03 Martin Lewis? while of course that's irrelevant because, you know, it's only lasting three months and nobody's on the typical use, I think it does actually paint a better picture of what is going to happen to prices. So currently, on typical use, over a year, if we were to be on that for a year, you're paying £1,720. From October, it would be £1,755. It's then predicted to drop back to £1,720 in January, but then to go up to £1,816 in April, and up to £1,830 next July. Of course, the further out you go, the more crystal ball gazing it is. So in that specific context, I think it is quite useful because it helps you see,
25:47 Martin Lewis? you know, that the prediction is, this time next July, you will be paying, currently paying £1,720, you'll be paying £1,830 if those predictions were to come true.
25:58 Martin Lewis? That was a long answer for that question.
25:59 Speaker 05 It was, it was. What should people be doing now ahead of the price cap increasing?
26:04 Martin Lewis? Not very much unless if you're on a price cap tariff, you want to get off a price cap tariff. I mean, that's the simple answer. I talked before, I went through what's going to be happening to people on the price cap, which is basically we now know the price until the end of the year. So it's going to go up on the first of October and then in January, which where it gets less certain. The current prediction is it will come down a smidge, then it will go up again in April and up again next July, although that's crystal ball gazing. Contrast that to the cheapest fixes on the market where you lock in the rate that you pay. So you lock in the standing charge and the unit rate for at least a year. The cheapest fixes on the market right now are 13% less than the October price cap. So you can right now shift to a tariff if you go and do a whole of market comparison,
26:49 Martin Lewis? where you can lock in a rate at 13% less than the October price cap. So that's about 11% less than you'll be paying until October, 13% less from October till December. And then if those predictions are right, still going to be around 11% less from January to April and then maybe 15% less from April onwards. Now, the predictions could be wrong, but for them to be wrong, we would need to see such a substantial world event that massively brought down the cost of wholesale rates in order for you to lose out by fixing at 13% cheaper. Because remember, we know you will be saving until the end of the year because we know the rates till the end of the year.
27:32 Martin Lewis? So for that not to be worthwhile for you, you would then have to see that really covered by a rate that's so much substantially cheaper by the fix from January onwards. Remembering that the key use periods are of course October to December and January to April. They're the key price cap periods, that it's virtually unthinkable. Nothing's impossible. It could happen. I can't predict world events. You know, we might have peace in Ukraine and everything go on in the Middle East that brings down prices. But generally, by far the safest thing for most people to do is to go onto a comparison site, find their cheapest fix, which depends on where you live and what you use, and lock into a cheap fix.
28:10 Martin Lewis? If you are doing that and you are worried what if prices were to move, well just look at the exit penalties. In the worst case, if things got really, really cheap, so you can get a much cheaper deal elsewhere, you pay the 50 quid odd exit penalties, you get out and you'd move to a cheaper tariff. But it's absolutely worth doing that in order to to secure yourself a cheap deal.
28:29 Speaker 05 Okay. Caroline, my fix with British Gas ends in October. What should I do?
28:33 Martin Lewis? A key rule with fixes is you cannot be charged early exit penalties within the last 49 days of your tariff. So you say it ends in October, unless it's ending in the, what is it? I'm just thinking where we are now. Unless it's ending in probably the last 10 days of October, you are free to ditch and switch or ditch and fix now. But this is what I would do. I would go and do a comparison. If the fix you are currently on is cheaper than the cheapest fix you can get, you may as well stick with it until the date that your fix ends. If you can fix now at a cheaper rate than you are currently fixed, then I would ditch it right now, assuming that you're within the last 49 days, so that you do not
29:17 Martin Lewis? need to pay, as you don't need to pay early exit penalties, and you may as well get on the cheaper rate straight away. Of course, you know, fix rates moved all the time. I can't guarantee whether, I don't know whether prices, if you fix at the end of October, will be cheaper. The cheapest fixes available will be cheaper and more expensive than they are now. It's literally an unknowable. But if I were on a cheaper tariff than I could fix it right now, I would stay on that as long as possible and I'd look to fix again at that point.
29:44 Speaker 05 What about Abigail? I just switched gas electricity. The price per kilowatt hour is pretty much the same, but the standing charge was considerably lower and I'll be saving £120 a year. Yes, use your price comparison tool. Thank you. I mean, why is this so? Surely standing charges should be capped and or done away with. In summer, I'll spend more on the standing charge than I do on the energy.
30:04 Martin Lewis? Well, regular listeners will know I've been campaigning about the moral hazard that is a standing charge for many years. There is a little chink in the armour that they are talking about mandating firms to have a low or no standing tariff option. That will hopefully be coming in at the beginning of next year. It was originally meant to be a price cap option. They are now looking at having it as a non-price cap option, which I disagree with, but we'll get on with that. Every firm should be able to offer low on no standing charge tariff, but that will only actually benefit lower users. If you're a higher user, you'll be better off keeping on the existing tariffs. As for the fact that the standing charge varies, it is very important for people to
30:45 Martin Lewis? remember this. We have a quasi-regulated pricing system. Two-thirds of homes in the UK are on a price capped tariff. If you're on a price cap tariff, there is a maximum standing charge and a maximum unit rate. Firms can go lower than the maximums, but they don't. If you are not on a price cap tariff, so you are not on the firm's standard, its default tariff, then there are no rules about what firms can charge. Firms are free now to offer no standing charge tariffs and put all the cost on the unit rate. In fact, there is one that does it, but it tends not to work out that way unless you have virtually
31:28 Martin Lewis? no usage at all. So the idea that the standing charge should be the same whatever tariff you're on doesn't fit within the model. So you basically have regulated pricing if you're on a standard tariff. If you're not on a standard tariff, it's an open market pricing. And if firms want to get a competitive advantage by having a lower or higher standing charge, you know, so you could have, it doesn't exist. There was a tariff that did this a long time ago that just had fixed charges, that it charged you a fixed amount no matter how much gas and electricity you used, based on a pre-evaluation of your previous years. They are free to do all of that. But it's only on the price cap where there is regulation about what they can or can't charge, but two thirds of homes are on the price cap. And that's the real problem here.
32:11 Martin Lewis? When the price cap was brought in, it was meant to be a backstop mechanism to protect those who do not switch. But through the energy crisis, it effectively became the default that virtually everyone is on, and still far too many people are on that. It's not the vulnerable person backstop it used to be, which is what it should be, which is why I say things like the price cap is a pants cap, and if you can get off the price cap, do, which virtually anybody can get off the price cap unless you're on an old school non-smart prepayment meter. So I think that's the philosophical thing people have to understand is all the press is about the move in the price cap. But there are this whole range of other tariffs, some quite innovative, like Octopus's tracker
32:53 Martin Lewis? and agile tariffs, or some tracker tariffs which will give you a discount on the standing charge or a discount on the unit rates, because they're not price capped. They can charge whatever they like, and that's up to the provider to make its own competitive advantage to decide what it wants to charge you.
33:09 Speaker 05 David's fixed octopus deal ends in December. No option on the website to fix on a deal today. Will one of today's fixes be cheaper than one in December?
33:20 Martin Lewis? I don't know. So this is where we have to start to understand the timing that is at play within energy bills. The October price cap, the reason we know what it will be already is because the price cap is based on a time lag. The assessment for the October period was actually prices from, where was it, mid-May to mid-August. So that was primarily based on the wholesale rates averaged over that three monthly period. And one of the reasons it's higher is because there was a spike on the back of when President Trump announced tariffs that put worldwide gas prices up. And that spike fed into the average over the three month period.
34:03 Martin Lewis? Without that, we'd have probably seen a slight drop when the price cap was announced. So. The price cap is time lagged. The rate at which fixes are set depends more on wholesale rates at the point at which you're getting the fix. Now, it tends to last for a couple of weeks or a week or two, but they move all the time. So if wholesale energy rates were to drop between now and December, you would be able to fix at a cheaper price than you can fix right now. If they were to rise between now and December, then the rate that you could fix at would be more expensive. But clearly wholesale energy rates are an international market and based on a whole, like any other market, like the stock market or currency rates, you know, nobody can predict
34:47 Martin Lewis? what is going to happen on those fixed rates. So that's why fixes are based on current prices, price caps are based on time lags. So there's almost an arbitrage between the two. The reason you can fix cheaper is partly competitive reasons and also because wholesale rates now are lower than the average of wholesale rates that dictated that past three month price cap for October, if you see what I mean.
35:11 Martin Lewis? Let's do some tellers for now because I love this week's tellers. It was really fascinating. The tellers was, what's the best quid you've spent in the last five years? What one pound or less gave you the most joy, happiness or financial return and why? And we've got a whole mix. Why don't you start?
35:26 Speaker 05 Colette, got a cellar tape dispenser from Poundland. Absolute game changer. I know what you mean with things like that.
35:32 Martin Lewis? Oh, I love little things like that. Yes.
35:35 Speaker 05 All your life you've been scratching away trying to find the end of the cellar tape.
35:39 Martin Lewis? Lisa, Lisa said, I spent £24.50 on groceries in Tesco and the checkout operator told me if I spent over £25, I'd get £5 off. So I went and grabbed a glass tumbler for a quid and my bill was reduced to £20.50p. Every time I drink out of that glass, I smile because it cost me minus £4. Love it.
36:01 Speaker 05 Andrew, teabag squeezer from a pound shop. Game changer, game changer. No more burnt fingers trying to fish out the teabag and it can reduce brew time by one minute as the strong squeeze gets out the last bit of goodness from the bag. I estimate this gives me back one half day a year. Blimey, you're drinking a lot of tea.
36:21 Martin Lewis? It's a lot of tea going there. Joe, a few years ago on holiday in Venice Beach, a guy was sitting beside the path with a sign that said, terrible advice for $1.
36:32 Martin Lewis? Of course, I paid. I can't remember what the advice was, but the whole thing made me laugh so much, I've never forgotten it. I'm not sure that counts, but we'll let that one in.
36:40 Speaker 05 Somebody's, uh, Stockport, I think it is, um, I've just got a Twitter handle, but, uh, an espresso machine says that may or may not be working, it said on the description from an online auction house, and for all of one pound, it worked fine, so that's good.
36:57 Martin Lewis? Do you know what I'd pay a pound for?
36:59 Speaker 05 Go on.
37:00 Martin Lewis? I would pay a pound for you to read these out in the order that they were sent.
37:03 Speaker 05 I'm sorry.
37:03 Martin Lewis? Because I spent about 20 minutes ordering them to get a nice narrative of the tellers last night. For example, you've missed Saturn saying, "One pound to open a junior ISA", which you were meant to read, so I could then talk about why one pound to open a junior ISA is a good idea.
37:16 Speaker 05 Okay, I've got one here.
37:17 Martin Lewis? Can we remember this for next week, please? I spent all that time, you're just picking your favourites. There's a narrative here, Adrian, there's a narrative.
37:25 Speaker 05 It's just like my favourite teacher at school suddenly getting exasperated with me, I can't bear it, I'm sorry. Saturn sent a, um, uh, contribution, it's a one pound she spent opening a junior ISA.
37:37 Martin Lewis? Well, I'm very pleased that we mentioned that one, because that is one of my tips. So Saturn is obviously a, a, a money saver. Now, I have a confession to make, the person did write junior ISA, but in my head, I autocorrected it without realising it to a lifetime ISA, because the trick is putting one pound in a lifetime ISA, not putting one pound in a junior ISA, and I think they're probably talking about putting one pound in a lifetime ISA, but I didn't state that in the programme. I then went on to talk about the importance of putting one pound in a lifetime ISA. Now, I do have the power of edit in the podcast. The person said junior ISA, but I think they meant lifetime ISA. What's really important for people aged 18 to 39, and you can get a 25% boost on the
38:22 Martin Lewis? money you save towards a deposit towards your first house, so you put four grand in, um, a year, per tax year, and you can get a thousand pounds free added on top. Remember though, the quiet house has to be one under £450,000, which can price even some first time buyers out in the south east of England, but if you're, you're not there, then this is an incredible Saving opportunity. So why put a pound in and why is that a good idea? Because to get the bonus, the extra 25% bonus, it needs to have been open for a year. So my advice is for anyone aged 18 to 39 who's not bought a house and doesn't have a lifetime ISA. Is putting one pound in a lifetime ISA and then you start the clock ticking. Tick tock, tick tock, tick tock. And then if you want to use it later, suddenly you've had it open for a year.
39:06 Martin Lewis? So then if you put your four grand in in a future tax year, you could instantly be eligible for the thousand pound bonus in order to buy your first house. So anybody aged 18 to 39 who's not bought a house, a best use of your quid you can do is get a quid in a lifetime ISA, just in case.
39:22 Speaker 05 We've got Robert in Liverpool with a quick call. Robert, your one pound, what did you spend it on?
39:28 Speaker 00 I bought a train, a full-size, three-car electric train.
39:34 Martin Lewis? Did you buy the tracks as well?
39:37 Speaker 00 Uh, no, unfortunately we didn't get the tracks with it, but.
39:41 Speaker 05 Where was this?
39:42 Speaker 00 So this was, this was up in Liverpool. So basically a couple of years ago, they were on a big project to take the old trains that have been working up there for decades, take them out of service, replace them with new trains. And as a railway enthusiast, I was, I was really excited at first, like, oh, shiny new trains. And then I suddenly realised these old trains that I grew up with were coming out of service. And I, I suddenly felt rather sad about it. So I approached the owners of the trains and it took a little bit of convincing that I was serious. But once they realised I was, they said, well, we can give one of these old class 507 trains to you for a nominal sum of one pound.
40:25 Speaker 05 Wow. And what happened to it then?
40:28 Speaker 00 Uh, well, the catch was we sort of had to find somewhere to, to keep it and pay for the transport costs, which came to over 10,000 pounds. So it maybe wasn't as big of a bargain as it first seemed.
40:38 Speaker 05 Right, but you didn't, so you just left it there, but.
40:42 Speaker 00 Well, what we do, we, we, no, we, we actually managed to raise the funds and
40:46 Speaker 05 Oh, did you? So where does it sit now then? Where is it?
40:49 Speaker 00 So at the moment, it's living in Derby at the big railway works that belong to Alstom, the engineering company, the rolling stock manufacturers.
40:59 Speaker 05 It's a shame you haven't got a big garden and just put it in there.
41:02 Martin Lewis? What's your dream with it?
41:04 Speaker 00 Well, I mean, we've just been at the greatest gathering, which was a massive exhibition that was held at Alstom to celebrate 200 years of railways. So we were able to have people on board and to show off its people, which was great. But at Alstom, they've been using it for demonstrators, apprentices and stuff. So it's been used as a learning tool. It's been, it's been really good. And the long term goal, hopefully, it's an electric train, which is a bit of a problem because, you know, you need to have electric third rail to run it. But we're hoping eventually to put batteries on it and we'll be able to run it. So you might go to a steam railway in the future and it won't be a steam train
41:46 Speaker 00 that turns up. It'll be, it'll be our class 507 electric train from Liverpool.
41:52 Speaker 05 That is excellent.
41:53 Martin Lewis? You so win the bragging rights on who's got the best train set, don't you?
41:56 Speaker 05 Well, who's got the best spend for a pound as well? I mean, the sell a tape dispenser is one thing, but a train is, is another.
42:06 Speaker 05 Is it, is it time for you know what, Martin?
42:08 Martin Lewis? It is time. Play the theme tune.
42:16 Martin Lewis? Yes, welcome back to Money Mastermind. The current score in this three option multiple choices, Adrian has got 10 right and 21 wrong, worse than random chance, Adrian. But don't worry for Adrian, everybody, because Adrian is very excited. A few years ago, he bought shares in Black Country Bants, a firm with him as its poster boy that planned to use AI to overdub Hollywood voices in West Midlands accents to make them grittier and more realistic. I've come here to chew bubblegum and kick ass and I'm all out of bubblegum. And you should now have one appearing on your screen for you to do, Adrian. Here you go.
42:57 Speaker 05 I know what you're thinking. Did he fire six shots or only five? Well, to tell you the truth, in all this excitement, I kind of lost track of myself. But being this is a forty four Magnum, the most powerful handcon in the world and would blow your head clean off, you've got to ask yourself one question. Do I feel lucky? Well, do you, punk?
43:20 Martin Lewis? So as you can see, unsurprisingly, he didn't do for Bance what Ryan Reynolds did for Wrexham, but luckily the firm ditched his advert, pivoted to the Peaky Blinders theme, and it exploded. Adrian's ten thousand pounds of shares are now worth fifteen thousand pounds, a five grand gain, which means there would be capital gains tax if you sold them. Capital gains tax is a tax on the gains you make on such things. So Adrian, the question is, as you are allowed to make three grands of tax-free gains, capital gains, each tax year, could you sell half of your shares now?
43:58 Speaker 05 How long have I had the investment?
43:59 Martin Lewis? Five years. Could you sell half of, it's irrelevant, could you sell half of them now, crystallize the gain, so selling half of them, the gain you crystallize would be two and a half thousand pounds, and then buy them back, assuming they're roughly the same price in a week? Do you understand the question?
44:17 Speaker 05 Yes, I do.
44:18 Martin Lewis? So A, yes, no, B, no you'd need to wait at least a month to buy them back, or C, no you'd have to wait until the start of the new tax year, so April, to buy them back? So the idea is you want to sell half the shares to crystallize the gain, to use your tax-free capital gains tax allowance, but you still want to own the shares, so you're going to go buy them back in a week, and we're assuming it'll be roughly the same price?
44:44 Speaker 05 I mean, that's a hell of a loophole if you can do it. And I couldn't have thought you'd have, it's still a loophole if you have to wait a month, so I would say the next tax year.
44:57 Martin Lewis? You'd have to wait until the start of the new tax year to buy those shares back?
45:02 Speaker 05 Although the new tax year could be.
45:04 Martin Lewis? Well, it's no six of April, well, it could be, I mean, so that under that one, if you were doing, you could wait until the fourth of April to sell them, then buy them on the sixth of April, couldn't you?
45:16 Speaker 05 So that doesn't matter, none of them makes it. I'll go for the middle, I'll go for B.
45:20 Martin Lewis? You'd need to wait at least a month to buy them back. Okay. So until 1998, this was known as bed and breakfasting. And what you could do then is you could sell your shares, you could buy them back, and that would count to crystallize your capital gains tax gain or loss. Some people might want to crystallize a loss to write off against other gains that they have made. But the bread and breakfast rule was changed in 1998, or sorry, there was a rule introduced in 1998, which said, you must now wait 30 days to buy an asset back and claim a capital gains tax exclusion. Play the hallelujah.
46:03 Martin Lewis? So what that means in practice is if you were to sell your shares, you were to wait a month. After the month, it would count as a new transaction and you would be able to rebuy those shares. Now, of course, you've got a month that you're waiting and anything could have happened to the share price in between. But this is particularly important because your tax-free capital gains tax allowance, the amount that you're allowed to learn in capital gains, you know, from selling a second house or from selling shares, has dropped quite substantially in recent years. In 2022-23 tax year, it was £12,300 a year. In the 2023-24 tax year, it was £6,000. Since 2425, it's only been £3,000. So many more people are paying capital gains tax.
46:46 Martin Lewis? The main rate is 18% if you're a basic rate income taxpayer. For higher and additional rate taxpayers, you pay 24% tax on your gains above your tax-free allowance. Now, what's really interesting, and I have to thank my uncle Tony, who relatively recently retired accountant for going through this in detail with me so I understood it, is what happens if you were to sell within 30 days? Are you ready for this? Because this is a bit complicated.
47:12 Speaker 05 Yeah.
47:13 Martin Lewis? So let's say you sell seven and a half thousand pounds of shares. You make a gain, you think in your head, of two and a half thousand pounds on those seven and a half grand of shares because you bought them originally at 5,000. You then buy the shares back after a week and you buy them back at 8,000 pounds. So you sold them for seven and a half thousand, you buy them at 8,000 pounds because the price has gone up in that week. What actually happens if you sell the shares within thirty days? Then what counts is you are deemed to have bought the shares at the price you bought them within that thirty days and sold them at the price you sold them. So even though you bought the shares after you sold them, you are deemed to have bought
47:55 Martin Lewis? the shares at eight thousand pounds and sold them at seven and a half thousand pounds. So you were trying to crystallise a gain of two and a half thousand. You've actually crystallised a loss of five hundred because those two pairs are matched if they're within thirty days. The buying and the selling are matched within thirty days and count as a single transaction. So even though the buy was after the sell, it counts as you made a gain. If the share price had dropped in the meantime, it would count, it counts as if you made a loss. If the share price had dropped in the meantime, so that you would sold them at seven and a half thousand and bought them back at seven thousand pounds, then you would have made a gain of five hundred. But you would not have been able to crystallise your initial gain, having bought them at five thousand and sold them at seven and a half thousand. I hope you understood that.
48:39 Speaker 05 I've got it and I thank you, I thank you very much indeed, Martin. What are you doing the rest of the day? Something nice?
48:45 Martin Lewis? Well, I'm going to be doing, recording some podcast extra stuff and then I am actually. I'm, I'm going to play Scrabble for Scrabble magazine and talk about my love of Scrabble. I've got all my two letter words memorised. I'm all ready. I want to score over four hundred. That's me average.
48:58 Speaker 05 I wish you a very happy triple word scoring kind of, kind of afternoon.
49:07 Martin Lewis? Ah, now sadly, the time on the Five Live clock ran off before I could explain what happened to me recently at Scrabble and I'm just going to tell you because I was quite pleased. I don't get these very often, but I got a double treble word score. Now Scrabble payers will know that's where you get an eight letter word. So you're losing one word that's already on the board and that enables you to cross two different treble word scores. So if you do three times three, you do nine times the score. The word I had was favourite, the American spelling, no U, which is allowed. The O was a blank and it connected with another seven I'd already put down, soldier, that was coming down. So the R.
49:47 Martin Lewis? Was already on the board and I think it scored me from memory 167 points in one go. And yes, I am showing off. Hello, Matt. Producer Matt is with us. We're not really here to talk about Scrabble. And Matt, you've got lots more energy questions for me, I believe.
50:02 Speaker 06 Yes, I do. I just want to say as well, you completely lost me there with the Scrabble thing.
50:06 Martin Lewis? Do you play Scrabble?
50:07 Speaker 06 I haven't played it for years, but...
50:09 Martin Lewis? You know there's a treble word score, the red ones that everybody wants to get?
50:11 Speaker 06 Yes.
50:12 Martin Lewis? They are eight letters apart. You only have seven letters in your rack. So to get an eight-letter word, you need to have one other letter down on the board. But if you have a letter down on the board in the right place, it happens rarely, you can do a word that goes across two treble word scores. So you get three times your word score and then three times that, which is nine times your score. So 167 points in one go, including the 50 bonus points for a bingo. Did that make it any more simple?
50:38 Speaker 06 I'm just gonna say yes, and let's do some energy questions.
50:40 Martin Lewis? Good, all right.
50:41 Speaker 06 Okay, shall we go with Noel's question? It's quite a long one, so bear with me. Noel is currently on So Energy Tomato, one year that ends on the 19th of January next year. There's a £50 per fuel early exit fee. They use, or he uses, 10,276.7 kilowatt-hours a year for electricity and 14,316.2 kilowatt-hours a year for gas. It's a four-bed detached house, four-kilowatt solar array, a Nissan Leaf electric car that does 18,000 miles a year. What's my best move? Would we benefit from a night time tariff for car charging? Do we stick with the So?
51:27 Speaker 06 Or pay the exit to fix earlier? He says his head hurts. I think mine does too.
51:32 Martin Lewis? I can't answer whether you should pay the exit penalty for fixing earlier because I do not know which fix you are on. There are a number of different fixes that that could be. So that just simply depends on, is the fix that you are on cheaper than the fix that you are able to get at the moment? If it is, you probably want to stick on that and ride it out and not pay the exit penalties. If it isn't, then whether it's worth fixing or not depends how much cheaper the new fix is than the current one. But I think what's more interesting in your question, and you've actually missed out one of the options, is your solar panels. You have both solar panels and you have an EV car. So let me deal with both of those because I think this is really interesting for many people. Those who have solar panels already,
52:15 Martin Lewis? depending when you get them, you may well be able to switch to a new energy tariff that gives you a better solar panel rate. So here's how it works with solar panels in general. If you got your solar panels before March 2019, you're on the feed-in tariff, the FIT system, which is where you get paid for generating energy even if you use it. You get paid for energy you export to the grid and the rate that you get is locked in for 20 to 25 years regardless of the provider. And that can be very generous. If you got your solar panels after around the middle of 2019, and there are some variances there, then you could be on the smart export guarantee tariff.
53:00 Martin Lewis? That's where you don't get paid for generating electricity that you use yourself. You only get paid for energy that you export to the grid and the rate is a market-based rate depending on which provider that you go for. Now, even if you are on the feed-in tariff, you are able to keep your locked-in rate for the feed-in tariff, but the smart export guarantee element, the element that you get paid for shifting to the grid, you may be able to switch to a different provider and get a specific rate. So if you're on solar panels, there then turn out to be four different types of solar panel tariff effectively. The first type, the one that pays the best, is where the energy firm fitted your solar panels. So that's not something that you can switch to if you don't have it.
53:45 Martin Lewis? And you tend to get with some of those firms a really good rate for the energy that you generate. The second type, the next best rate, are complex tariffs where you must be with the same firm for solar export and your energy supply and have a solar battery. You don't, so it doesn't count to you, but they can be good. The third type, which is possible for you, is where you must be with the same firm for the solar export and your energy supplier. And the final type is where you just get a standalone tariff. Now, to put it in context, if you have a standalone tariff, they vary between you being paid between one and six pence per kilowatt hour to for the energy that you're generating.
54:26 Martin Lewis? But if you have one of the tariffs where your energy retail supply is linked with your solar export tariff, then instead of one p to six p, you're talking between five pence and sixteen and a half pence. And there are places online you can work out which will list all the different tariffs for you, so you can find out who the best is. Now, having done some number crunching, it works out that if you export more than eighteen percent of the electricity you use, then you will generally be better off to choose your rate based on your solar export tariff rather than your energy supply. You still want the cheapest energy supply with the solar export tariff, but that the solar export tariff fees become more important than what you're paying for your energy usage. So let's call it around twenty percent.
55:10 Martin Lewis? If more than a fifth of your electricity that you generate is being sent back into the grid, then you'll want to look at when you come to renewal your solar export tariff. If not, you probably just want to focus on what is the cheapest energy tariff for you. So let's move on to the next part. It's a big one, this, Matt, isn't it? So let's move on to the next part. You have an electric car, an electric vehicle, and that too has an impact in what you're choosing. There are two different types of electric vehicle tariffs. There are add-on tariffs, which is where you get a special cheap rate, but only for charging your car. Now, these are typically offered by OVO and Scottish Power. You get a very cheap overnight rate for charging your car, but only charging your car.
55:55 Martin Lewis? All other electrical use in your home will be charged at your normal rate. The other type of tariffs are what are called two tariff rates, which are most of these, where you get five to seven off-peak hours, typically midnight to five AM, around that type of point, where you're charged five to ten p a kilowatt hour for your electricity, rather than the normal cost of around twenty-five to thirty p for your electricity. So far cheaper, and you can charge all your electrical appliances on that. Now, the benefit for that is that if you can shift your electric vehicle and any other usage to those overnight hours, then that can be really cheap. But the rest of the time, you'll tend to be paying typical price cap rates. The benefit of the add-on tariff, the OVO and Scottish Power, where you only get the
56:39 Martin Lewis? cheap rate for your car, is they can sometimes, they don't really have at the moment, have cheap fixes. So you might get a cheap fix with OVO and then get its EV tariff for charging your electric vehicle. So you've sort of got the best of both worlds. There aren't any at the moment, but when you come to your renewal in January, there may well be. And if none of those are particularly adding up for you, then you just want to focus on getting yourself the cheapest deal when the fix comes to an end. So this is all a bit complicated because what we don't have at the moment is a calculator that factors in the solar export charge and factors in the electric vehicle charge for you particularly. No one has built that yet. It is on my list of things to do. But hopefully that gives you a rough idea of the dilemma and the options that are available for you. That was a big one, Matt.
57:24 Martin Lewis? Have you got an easier one for me now?
57:25 Speaker 06 I do. Ian is asking if Fuse Energy are any good.
57:29 Martin Lewis? So Fuse Energy are one of the relatively new firms out there. There aren't many after, obviously, many firms went bust during the energy crisis and we've not seen as many new entrants in the market. We used to see a new one launching all the time. I believed they were set up, I'm doing this from memory, so apologies if I've wrong, by two of the guys who were in at the early days of setting up Revolut. And I presume they've got some form of private equity backing behind them. They are very price competitive at the moment. They're up there without fox and marketers regularly trying to be top of the best buy tables to try and build their market share. Are they any good? A bit too early for me to have any feedback on them, but they are, you know, the tests that firms have to pass now to get an energy licence. I mean, I was involved in suggesting what they should be. If I remember what I suggested, it should be, you know, financial solvency, ability
58:14 Martin Lewis? to deal with customer service issues and fit and proper person tests. The tests that the regulator puts in now are much tougher than it used to be when one man and his dog can open up an energy firm. So hopefully the tests are tough enough and they are a legitimate firm that are going to be able to help people. I can't vouch more than that, but they are certainly trying. The reason you'll be asking is they're trying to push out some cheap tariffs at the moment.
58:36 Speaker 06 Francis, it's more of a statement than a question. Pay for what you use each month. It's much simpler and you don't have to worry about it.
58:42 Martin Lewis? It is much simpler, it's also much more expensive. And that's very important for you to understand. It is not for me to tell you how you work it. But it is important that you understand that if you pay in receipt of bills, which is what that payment method is, then from memory, I think it is on average around seven percent more expensive than paying by direct debit. For if you, energy bills are two thousand pounds a year, they're going to be two thousand one hundred and forty pounds a year if you're in pay of receipt of bills and there are less competitive tariffs available. What I would strongly suggest you look at if you do want the system where you're, remember, let's go back to basics. Most people pay energy by monthly direct debit.
59:23 Martin Lewis? What that means is the energy firm estimates roughly what you will use a year and how much you would pay for that, divides it by twelve and that's what you pay each month. Now, if that didn't exist, it's the type of thing I would be campaigning for because it helps people with cash flow so that, you know, in the cold winter months where you're using more, you're not suddenly having to find a lot more money than you do in the summer and it helps people with budgeting. But it isn't for everyone. And there are problems in if a firm misestimates what you use. So giving regular meter reading, if you're not on a working smart meter, is always very important and keeping your eye on not keeping too much of your credit. You will generally want to build up credit and be in credit when you go into the winter.
1:00:04 Martin Lewis? So right now you want to have, but this time of year you will be building up credit and many people should be in credit, maybe even a month, a month and a half's worth of direct debit in credit at this time of the year. And then you'll use that up over the winter and in March is when you should be at the bottom period, you may be in energy debt. If you don't want to be on that system, and many people don't, then I would suggest you look for a variable direct debit. A variable direct debit system is where you, each month, a direct debit is automatically taken from your account to pay for the energy you have used in that month. It is at the same price as monthly direct debit, though it is not offered in every case. If you use that system, you get the benefits of the cheaper price and more competitive tariffs available, but.
1:00:49 Martin Lewis? If you go to payment in receipt of bills, which is literally where you get a bill and you pay it, which is what most people are on when they tell me I just, I just pay for what I use, then you're going to pay more. So I'm not the biggest fan of it, but it's your choice.
1:01:03 Speaker 06 Question from Mabel. I'm due to fix my electricity this month. I'm a low energy user and tariff gives a £25 discount on standing charge and variable for usage. Was going to fix but wondered about changes. Are either standing charge that are due? Will I get any standing charge discounts applied if I've already fixed?
1:01:21 Martin Lewis? No, there is no standing charge discount that is due to come out. What is due to come out if firms are to be mandated that they must offer a low or no standing charge tariff, probably from sometime in January. Now, if you are a very low user, so I'm talking somebody whose total energy bills are under around £80 a month, that may well benefit you. Having said that, what I can't do until we know the rates of those tariffs is work out whether that will be cheaper than fixing. My intuition would be that if you're going to be able to get a fix now at 13% cheaper than the price cap, which is what you will move on to when, I'm guessing you're on the EDF tracker tariff or maybe the E.ON tracker tariff. That's one of those where you pay the price cap rates and unit rates, but you
1:02:05 Martin Lewis? get £25 a year per electricity, £25 a year on electricity and £25 a year on gas, standing charge is reduced. My intuition would be I would, I would go for the bird in the hand, lock in your cheap fix now with energy prices going up and then you could wait for the end of that year's fix, see where we are with the low or no standing tariffs in a year's time, because we just don't know when they're going to be coming in. So I'd probably, I'd probably play safe and fix now.
1:02:32 Speaker 06 Okay, one more from Peter.
1:02:33 Martin Lewis? Yeah.
1:02:34 Speaker 06 Just been able to take advantage of a lower fixed deal with my existing energy supplier, having only renewed a couple of weeks ago. I didn't realise that you could do this and I wonder if this is not common knowledge.
1:02:44 Martin Lewis? Yeah, it's always worth noting, many firms, not all firms and there's no rule on it, will allow you to switch to one of their fixes with no early exit penalties, not to another firm. So if you've got a fix and you, and you're leaving it, you'll normally have an exit penalty of £25 or £50 per fuel. So if you're on dual fuel, £50 or £100 in total if you leave it early. And early is any time earlier than 49 days before the fix ends. But they will wipe that early exit penalty fee if you're switching to one of their own fixes. So it is always worth looking at if there is a particularly cheap fix being offered by your existing company and that's cheaper than the fix that you're on now, you may as well go for it. Simple as that.
1:03:29 Martin Lewis? And yeah, very good tip. Like that one. Thank you very much.
1:03:32 Speaker 06 Oh, Martin, just before we go, we've had a message from Vicky. She says, thanks to you. She was listening about the energy rates just now. She took her lunch, sat in front of the computer, compared, switched and saved £57 a month. Thank you very much.
1:03:44 Martin Lewis? Wow. They're getting on for £700 a year. She must have had big bills to start with. It shows you it is worth getting on and sorting this. Get off the pants cap, folks. It's pants.
1:03:59 Martin Lewis? That's it for this week. Sorry if I was a little bit ring rusty. If you've enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. We tend to put a new episode out every Thursday. Do subscribe to keep up to date and your pockets will be pleased with you. If you've not enjoyed it. Your own fault for listening this long.
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1:06:27 Speaker 07 Welcome to The Haunted Library. Join me, Colin Morgan, as I read Frankenstein by Mary Shelley.
1:06:37 Speaker 07 A story of science and ambition, loneliness and longing, and what it truly means to be human.
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