Pod Insights The Martin Lewis Podcast Question Time: How to deal with mounting debt? What happens to ISAs when I die? Is student loan paid before or after tax? About this episode In our Question Time podcast, Martin Lewis gives you answers on anything and everything, including: how do I deal with my mounting debt? Is student loan paid before or after tax (and should I set up a direct debit if I’m close to paying it off)? Can someone take over my ISA allowance when I die? Plus, we have a student loan success story, and just how does Martin manage to do 26,000 steps a day?
If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!) – so if you’ve always wanted to know his favourite seaside town, if he’d ever go to space, or have a very complicated question about your personal finances, email it to [email protected] mailto:[email protected] .
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 This BBC podcast is supported by ads outside the UK.
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1:22 Speaker 02 Coffee?
1:23 Speaker 03 Love a cup of tea. I'll have tea too.
1:25 Speaker 02 Tea for me, please.
1:32 Martin Lewis? People sometimes think my philosophy is for people to spend, not spend anything. It's not. It's for you to have the best possible life that you can.
1:38 Speaker 06 I had an email a couple of days later to say that I'd received a refund of £790.
1:43 Martin Lewis? Did I sound mad? I mean, yeah. I've never had that question before. Couldn't have said it better myself.
1:48 Speaker 07 Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is the Question Time pod in which I answer your questions about absolutely anything and everything within reason. This week, you asked me, how do I deal with my mounting debts? Do you pay your student loan before or after tax? Can someone take over my ISA allowance when I die? Charlotte then told us her story of an easy student loan reclaiming success. And finally, you asked me, how do I manage to do 26,000 steps a day? Play the theme tune.
2:38 Martin Lewis? Hello everybody and welcome to this week's Question Time pod. And I know what you're waiting for. You're waiting for the man himself, the curator of questions, the podcast producer, he who puts everything together and orders it. Yes, ladies and gentlemen, big build-up time. Please welcome podcast producer Matt Burnham. Matt, please add clapping sound.
3:04 Speaker 07 Will do. Thank you very much for that intro. I love that.
3:06 Martin Lewis? There you go.
3:07 Speaker 07 Thank you.
3:07 Martin Lewis? You only get that once. That's your Christmas present. Done.
3:10 Speaker 07 Oh, I thought you were going to give me something else.
3:11 Martin Lewis? There we are. Oh, what more could anyone get than a claim on this podcast?
3:16 Speaker 07 I was gonna...
3:16 Martin Lewis? There's nothing better.
3:17 Speaker 07 Also, all the advice you've given me. I do listen. Everyone gets the advice. I get the advice too.
3:23 Martin Lewis? Thanks, Matt. You see, everybody, we do like each other really, but please put me at the start when you're addressing your emails. Right, what's the first question?
3:31 Speaker 07 We will start from one from Instagram. Claire King is asking, "The best way to deal with mounting debt?"
3:39 Martin Lewis? It's a really interesting question and you're unspecific, so we have to think about what's going on. The first thing is, you know, debt is a symptom. It's not the problem in its own right. It's a symptom of the fact that you're spending more than you earn. So the place that you start is you do a money makeover. You go through everything that you spend money on in the first place and see, can I get the same and pay less for it? You know, that's my stocking trade. It's what I do. I'm sure you'll be able to work out good information resources on the internet. They'll be able to help you do that, that I'm not allowed to mention. Then, once you've done that, I would go and do a budget. Once you've cut down everything so that you're paying less and getting the same and see, are you still spending more than you earn? If you are, then the next stage is that you need to cut back. So in a way, I tend to think about the first lot as pain-free savings.
4:24 Martin Lewis? You know, if you're just changing your gas and electricity supplier, so you pay £200 a year less, there's no pain in that. There's a bit of hassle in organising it, but there's no pain. But if you're having to cut back and not do something that you like doing, then they are painful savings. But if you're still overspending, then you need to do those painful because ultimately, when we look at life as a happiness recipe... Being in debt and having debts mounting up is a massive unhappiness thing. And therefore, missing out on something you enjoy a little bit in order not to be in debt will generally give you a bigger totality of happiness than it would have done otherwise. Does that make sense? You know what I mean about happiness? I know it sounds strange for me to talk about it, but we have to be honest. People sometimes think my philosophy is for people to spend, not spend anything.
5:07 Martin Lewis? It's not. It's for you to have the best possible life that you can. And struggling with debt is a huge recipe for unhappiness, you know. I chair the Money and Mental Health Policy Institute. The statistics, if you have mental health issues, you're over three times more likely to be in crisis debt than everybody else. And the clinical treatment time for depression for people who have crisis debts is exacerbated by up to 18 months. And the number of people who have suicidal ideation because of their debts is huge. This is not, you know, it's not a trivial thing, but it's not just money. That's why actually, you know, the idea that take it on and you have to cut a bit back to stop the debts mounting up is really important. And it's really important to deal with it. When I used to, years ago, I started my career and I used to do money makeovers, which I never thought was the best format for me, but TV people did.
5:52 Martin Lewis? And you'd go into someone's house and they were in debt. And you'd add it up and they'd never bother to add up how much debt they were in. And I would, as part of it, because obviously you want to know what the situation is and you'd tell them and their faces would drop and they would go grow. And the point I always made, and this is really important, is you feel like you're in a worse position than you thought you were in. But in practice, you're in a much better position than you were in because now we're dealing with it. The nature of the problem hasn't changed. The problem was always there, but until now, we weren't looking at how to tackle it and how to improve it. So it's just going to get worse. This is a good moment, not a bad moment. This is the moment when you're going to start to change your finances for the better.
6:36 Martin Lewis? And that's what I'd encourage. Don't put it off. The longer you put it off, like anything, the more it festers, the worse it will get. If you've got financial problems, the sooner you deal with them, the quicker you'll be out of them, the more you'll move on to happiness in life. So let's go on to the practicals of debt. It tends to split into two different camps. There are those who are within the system. And so the three questions I'd normally give you are. Question number one, are you failing to repay your minimum repayments on any of your debts? Question number two. Are your total debts, not counting mortgage or student loans, bigger than a year's salary? Question number three.
7:18 Martin Lewis? Are you struggling to sleep at night or having other mental health issues because of worries over your debt? If the answer to any of those questions is yes, then I would say you don't want to go within the system, you need to go and get debt help. If you answered no to all of those, then the first thing to look at is staying within the system. Staying within the system means going through all the methods of how you can cut the cost of your debts. If you've got credit cards, can you do a balance transfer to shift the debt to a cheaper place? If you've got a loan, can you rebroke a new loan so that it's cheaper or go to a money transfer credit card? It's complicated, go do some reading on that one. Are you repaying the right way? Repaying the right way means you should list all your debts in order of the interest rate and repay the most expensive one first, just paying the minimums on all the others
8:03 Martin Lewis? because the most expensive one is the one that's growing more quickly. And hopefully, having done a budget, you'll have more money to be able to free those debts up. Have you looked at your overdraft? Overdrafts are often 40%, more than double the cost of many high street credit cards or about double the cost of many high street credit cards. So actually, many people pay their credit cards off using their bank account, but they're overdrawn, the bank account's more expensive. You should be paying the minimum on your credit card and leaving more money in your bank account. All of those things are important to look at. And then, after a year or two and focused and hopefully you've done your budget, if you're within the system, you can get rid of those debts, your credit score won't be affected by it and you should be in a much better position, but it takes work and it takes discipline.
8:45 Martin Lewis? If you were in the other camp, if you're in the camp where you said yes to any of those questions, then don't listen to anything I've just said. It's a totally different solution and what I would do then is I'd go and speak to one of the non-profit debt counselling agencies. National Debt Line, Citizens Advice Bureau, Step Change and if you want emotional help too, CAP Christians Against Poverty.
9:09 Martin Lewis? They are Christians who do it. They do it because they're Christians, rather than saying that you have to be a Christian to do it, and that's part of the solution. Although some of the people there, you know, they often are praying and stuff, but they are brilliant for the emotional support if you need that too. And if you want someone who's actually going to hold your hand through this because you can't even cope with dealing with it. The others are good at dealing with it. They're good at helping you deal with deal with it. That's how I differentiate them. And you want to go and see them. They might put you into a debt management plan. They might look at solutions like an IVA. They might talk to your creditors for you. They'll give you breathing space to stop the creditors dealing with you. And the biggest message I get from people who've been to nonprofit debt counselling agencies is I finally slept last night. So really, which way you deal with your debts
9:52 Martin Lewis? depends on you. Always try and look at, are you spending too much on things? Always try and do a budget and check that you're not still spending more than you earn. Whether you then try and work debt within the system, or you do it outside the system, depends on what you feel most comfortable with. And if you're really not sure, and you're in panic, and you don't know, well then hedge towards going to one of the nonprofit debt counselling agencies. They're free, they're not judgmental. Do not sit there thinking, I just don't want to tell anyone they're going to tell me. They're not going to tell you off. They are there to help and support you through the journey to rehabilitating your finances, which will hopefully give you a better life.
10:27 Martin Lewis? Matt, at this point in the show, it's a caller, isn't it?
10:30 Speaker 07 Of course. Michael in Andover is our first caller. Hi, Michael. Good afternoon. Hello.
10:36 Martin Lewis? Hello, Michael. What can I do for you? It's Martin here.
10:39 Speaker 07 Hello, Martin. I am within 12 months of finishing my, paying off my student loan, and the student loans company has, oh, thank you. The student loans company has given me the option of switching to paying by direct debit instead of it coming out of my salary.
10:53 Martin Lewis? Yeah.
10:54 Speaker 07 I want to know, is because it comes out of my salary before tax, I believe, is it better to stay on the, ah.
11:00 Martin Lewis? Carry on then.
11:01 Speaker 07 It's a very quick answer. Is it better to stay as it is, or switch to direct debit and avoid overpaying?
11:07 Martin Lewis? So this is a common misunderstanding. The amount you pay is calculated from your before-tax income, but you pay from your after-tax income. Does that make sense?
11:22 Speaker 07 That does.
11:22 Martin Lewis? So, for example, which plan are you on? Just so I know, you're Plan Two or?
11:27 Speaker 07 Plan One.
11:28 Speaker 00 The before 2012.
11:30 Martin Lewis? Oh, okay. So the Plan One threshold is currently £26,000. I think it's going to shift to around £27,000 from April. So we'll use that figure. Let's say you earn £30,000. I'm sure you earn more and you wouldn't be clearing off the student loan at this point, but we'll go because it's nice, easy maths. £30,000 is what they would calculate your repayments on. That's £3,000 above the threshold. You pay 9% of the £3,000. So you pay £270 a year roughly, although it does depend on what you earn a month, but we won't go into that. However, the £270 is taken off your salary once tax and national insurance have already been removed. So you're paying it from your after-tax, not your before-tax salary. Therefore, you are not at any disadvantage when you get into the last two-year period,
12:15 Martin Lewis? where you can shift to paying by direct debit rather than paying off the payroll. And for those who don't know, the reason you'd shift to paying by direct debit is because the complication between student loans company and HMRC doesn't often tell employers when to stop taking the student loan payment in time. So people end up overpaying and then have to get the money back. Whereas in the last two years of paying off, if you switch to direct debit, it means you will only pay the student loan company what you owe the student loan company and won't have to claim any back. Does that answer your question?
12:44 Speaker 00 That does. Can I ask a follow-up question?
12:46 Martin Lewis? You can. You're allowed. That's the advantage of being a caller. You see, all those of you who just write your questions in, you can't ask a follow-up question, but you called Michael, so you get to ask a follow-up question. I'm not saying I'll answer it, but I can ask it.
12:59 Speaker 00 Thank you. If I switch to the direct debit, and if I get a pay rise over the next whilst I'm paying it off, am I obliged to increase my repayments or can I keep repaying at my current, in your example, £270 a year?
13:14 Martin Lewis? So I think that you're asking me, are you obliged? I've never had that question before, but you will have an obligation to keep the student loan company informed of your financial situation. So as you're asking me this in a podcast, official capacity, the only answer I could give you is that you should inform the student loan company.
13:35 Speaker 06 Understood. Thank you.
13:36 Martin Lewis? Cool. Yeah, I mean, and ultimately, the truth be told, so on a Plan One loan, your interest rate is set at the rate of inflation. Yep. So unlike those people on Plan Two loans, so that actually, you know, once you get rid of this, you've got rid of it. I mean, ultimately, you could argue the rate of inflation is lower than you could earn in savings. So you could put some money in savings to slightly offset it rather, and it would be beneficial to you. But you're going to be talking a few pence, and you may as well just get rid of this and then get on with your life, I think. Yeah. And how old are you? May I ask how old you are, Michael?
14:08 Speaker 06 I'm thirty six.
14:10 Martin Lewis? So you're thirty six. So you've actually repaid it pretty reasonably, pretty quickly. And we've often discussed when I do in the main podcast, was university worth it for you? So here you are at the point where you're nearly going to pay off the student loan. Looking back, was university the right decision for you?
14:28 Speaker 06 It was. It led me to get a graduate job. My degree directly led to a job. And I've enjoyed my time at university. I enjoyed my job since. And I haven't noticed, really, I haven't really noticed my student loan repayments because it's just been another tax on my payslip.
14:46 Martin Lewis? Couldn't have said it better myself. Thank you so much for calling.
14:49 Speaker 06 Thank you for your time. Thank you for answering my question.
14:54 Martin Lewis? Okay, so Matt, this has to be you reading out a question at this point.
15:00 Speaker 07 Yes.
15:00 Martin Lewis? The custodian of questions, he has his fixed route. He is a great man and he likes structure and order. So you're going to read me a question, I can tell.
15:10 Speaker 07 He does, and he also likes when he is mentioned in an email.
15:14 Martin Lewis? Okay.
15:14 Speaker 07 So that's why I picked this one. No, it's not. So it starts with.
15:18 Martin Lewis? I bet it is though. By the way, if you want more chance of getting on air, clearly Matt is the one who selects the questions. So putting him in there will help. But if you want chances of getting a good answer, then make sure I'm first. Simple rules should work with life.
15:32 Speaker 07 So you should like this one because it's from Lindsay and Lindsay has started with good morning, Martin, in brackets, and Matt.
15:39 Martin Lewis? I think that's a perfectly appropriate and right way to do it, Lindsay.
15:41 Speaker 07 Yeah, maybe. Don't need the brackets, but anyway.
15:43 Martin Lewis? I think the brackets are fine.
15:44 Speaker 07 Let's carry on. Firstly, let me say what a great podcast you present. It's very informative and entertaining.
15:50 Martin Lewis? The great podcast you present is addressing Martin and Matt. That's that's slightly worrying.
15:56 Speaker 07 Would you not say it's double headed?
15:59 Martin Lewis? No, I think it's one and a half.
16:01 Speaker 07 Okay, okay, that's fine, that's fine. I'll take that, I'll take that. He says that your podcast is very informative and entertaining and saves him money as well.
16:09 Martin Lewis? Nice. Sorry, I'm still laughing at getting stuck over, "Oh my word, what do I say? How do I say this? I'm not a prat."
16:17 Speaker 07 Do you want me to carry on reading this bit?
16:18 Martin Lewis? Yes, carry on, carry on.
16:19 Speaker 07 In my view, one of the best podcasts on radio.
16:22 Martin Lewis? Quite right.
16:23 Speaker 07 Having Matt C of Q as your comedic foil works really well and makes for some lighthearted relief amongst some of the more serious discussions.
16:30 Martin Lewis? How meta is it that we're laughing at the description of us doing what Lindsay likes us doing?
16:36 Speaker 07 We're doing it right now.
16:37 Martin Lewis? That's very meta. Carry on, yes.
16:39 Speaker 07 So here's-
16:39 Martin Lewis? I feel like we're Ellis and John. I mean, it's, oh, whoa, carry on.
16:42 Speaker 07 Okay, here's his question. Let's actually get to that.
16:45 Martin Lewis? Okay.
16:45 Speaker 07 If both himself and his wife have a relatively large sum of money in cash ISAs, each under their own name, what happens to the ISA wrapper when one of them dies and ownership of the sum transfers to the remaining spouse? He goes and says, "If we had, say, £250,000 in an ISA and I die, would my wife then have £500,000 in an ISA under her name or would she have to find an alternative place to invest and each year transfer a sum into the ISA wrapper in line with the current allowance at that time?" They're both just into their 60s. He's in the 40% tax bracket and his wife is in the 20% tax bracket.
17:23 Martin Lewis? Wow, well done on that, Lindsay. I should, that's a lot in cash ISAs, always worth, remember, you've still got a long time to go looking at whether some of it should be in investments and in the shares ISA as well. But let me answer the actual straight question here. So the rules are quite interesting. You can effectively leave your ISA allowance to your spouse. Spouse means married or civil partner. It doesn't mean common law partner. And what happens when you do? Well, yeah, I mean, in practical terms, in most cases, you'd sort of leave them, you'd leave them your ISA and then they would get the ISA and it would be in, and they get, they get what's called an additional ISA allowance. So technically, what could actually happen is you could leave the assets in your ISA to somebody different, but your spouse would still get an in-
18:09 Martin Lewis? Increased ISA allowance by the size of your ISA, which would be called that additional ISA allowance. Though in practice, you're probably going to leave the assets in your ISA to your spouse, and it will just all be relatively simple. So what you're concerned about is, if I leave the money, will my wife suddenly have to pay tax on the money that was in an ISA? No, she wouldn't. If you left it to anyone other than your wife, then yes, they would. And the ISA would be frozen, but then after a time once all the probate went through, it would no longer have ISA status. At that point, it would come out of the ISA status. But as you're leaving it to your spouse, then yes, she would get it. Worth noting that money left in an ISA is still subject to inheritance tax, though. The ISA does not exempt it from inheritance tax.
18:52 Martin Lewis? So if you were due to pay inheritance tax, which you may well be with those type of money in ISAs, then it would still be inheritance tax. It counts as, you know, whether it's in or out of an ISA, it still counts as assets for inheritance tax reasons.
19:04 Speaker 07 That was a long one.
19:06 Martin Lewis? Yeah. Did it make sense?
19:08 Speaker 07 It made sense to me.
19:09 Martin Lewis? Good. Well, that'll do. I mean, that's a nice low bar. I'll take that. Now, mighty custodian of the questions, it's the fourth question in. This is the fun one. Have we actually got one from a listener this week, rather than the Matt question?
19:25 Speaker 07 Finally, I don't have to think of one on the spot.
19:27 Martin Lewis? Good. And by the way, if you do have any questions on anything or everything that we're talking about, that's always the promise of the podcast. Of course, most of them about money, but you can ask me other questions, too, and Matt will always select one each week. This is a little bit of skance on the side and not what we normally do. Then just get in touch to [email protected] . And as I always say, you can address it to Dear Martin, and then you can put in brackets "Matt", and that's fine.
19:51 Speaker 07 Or you can Dear Matt, because I am the one who reads it. Anyway, Daryl in Bristol has sent us in, Dear Martin, ever since your jaunt on the Taskmaster New Year's treat, I've followed your inspiration to keep moving.
20:01 Martin Lewis? Well done.
20:02 Speaker 07 So far, I'm on 300-plus days at 10,000 steps a day. However, I just cannot see how a busy person like you can achieve 20,000-plus a day. How did you achieve such movement for so many years?
20:15 Martin Lewis? Oh, Daryl, you've asked at such an interesting time, because my hope is this year I'm going to top 26,000 a day. As an average over the year and I I'm just currently averaging at the end of each day, I'm currently averaging twenty six thousand and seventy steps and I actually have a graph plotting what I need to do, how many steps a day I need to average to get over the twenty six thousand figure, which is currently as we're recording this about twenty four thousand nine hundred and fifty a day. If I can average that for the rest of the year, I'll hit over twenty six thousand and I am militantly on this so that, you know, if I'm not hitting that, I am walking around and my wife just looks at me like I'm crazy and she's probably right. I'm walking around at the end of the evening, going round and round to make sure that I'm hitting that minimum because I want to get, I've done twenty five and a half
20:59 Martin Lewis? thousand, never got over twenty six thousand and I'm so close. But if if we ignore the current complete lunacy of the way I'm doing it at the moment, the answer is you have to reframe your life. Now, I am a very busy person and I'm constantly work walking, but I'm also in the luxurious position that when I do meetings, I normally have someone with my team with me and I'm generally the person who's doing more talking than listening. That's just how it works because I run, I'm the head of an organisation and most people I tend to have meetings with, it's the way round. So I do, unless I actually need to see something, I do a lot of my meetings while walking. So for example, on the way walking to the studio for the podcast, producer Matt and I had a call about what's going
21:41 Martin Lewis? to be in because we we do both the podcasts at the same on the same day, what we're going to be talking about and we go through and we do our production meeting there, the same as I do a production meeting when I'm walking to the studio for my TV show. And then I had a call with a member of my team going through for about twenty minutes a meeting and all of my time, my rule is if I'm talking, I'm walking. So that means even if I'm sitting at my desk, if I make a phone call, instinctively, I don't even have to think about it anymore, I stand up and I start walking around the room when I'm making a phone call. And the walking talking thing really helps, as does the fact that I do fifty minutes of cardio every morning. So that means I'm already starting my day, once I've started my cardio on about, done my cardio on about six or seven thousand steps. And it basically just,
22:23 Martin Lewis? the real answer is, I realise as I'm saying this, is become obsessive and focus your entire life around your steps and it's easy.
22:30 Martin Lewis? Maybe I should stop next year.
22:32 Speaker 07 How are your knees?
22:33 Martin Lewis? My knees, it's the running that gets my knees and I run a lot. I use a cross trainer now. I only run once or twice a week and I do cross training is my cardio on the days I don't run because at 53, my knees just couldn't take that much running. But they're all right. Also, there are other things, tips like have two or three different pairs. I mean, I wear special shoes that can take walking. I'm not special, special, you know, I go out and buy normal branded ones, but ones that are good for walking. But don't wear the same shoes every day. Your feet are just and that can be dangerous, I've been told. So I wear different shoes on different days so that they're never quite the same and all that type of stuff. But yeah, where am I now? We're recording, it's not great today. I'm not going to tell you. It's, as we're recording this, it's 2:27pm and I'm only on 11,000 steps.
23:14 Martin Lewis? So I have a long way to go, but then I'll be walking home from the studio and then I'm going out for this evening. So I'll be walking out and walking back and it'll get there. Does I sound mad?
23:24 Speaker 07 I mean, yeah, but it's, you've always been.
23:28 Martin Lewis? I'll tell you the truth, the truth about the steps, and I need to be honest. It is an obsession and it's one I could stop, but it has had such materially, material benefits for my health. I'm thinner, I'm stronger, my back problems are much better from it, my shoulders work so much better. It gives me a little bit of a break. Sometimes I listen to my audiobook and it has benefits for mental health as well. That is an obsession I deliberately cultivate because I feel it's good for me. So there. Where are we moving to now?
23:59 Martin Lewis? Now, Matt, the other week I said it would be a caller at this point and you said, no, it's not a caller. It's a success story. So I'm now hedging my bets and going for that at this point it's either a caller or a success story.
24:12 Speaker 07 Okay, it's both, the caller with a success story.
24:16 Martin Lewis? Okay, good.
24:17 Speaker 07 We have Charlotte, she's in Reading and she's on the line. Hi, Charlotte.
24:22 Speaker 06 Hi, Matt. Hi, Martin.
24:23 Martin Lewis? Hello.
24:25 Speaker 06 Hello, how are you?
24:25 Martin Lewis? Good, nice to hear from you. I always like a success story. What have you got for me?
24:29 Speaker 06 Uh, well, I was listening to the podcast a couple of weeks ago, um, listening to you talk about, uh, people who may have overpaid their student loan, um. And it sort of got me thinking that I might have overpaid mine in twenty twenty three when I was on my maternity leave. So I went online. Um, I used a calculator and sort of worked out that it'd be unlikely that I'll, I'll ever pay it off in full.
24:50 Martin Lewis? Yeah.
24:51 Speaker 06 Um, so I thought it's worth requesting the refund. Um, so yeah, logged in, went to request a refund. It was a lot easier than, than I thought it would be. Took me no more than five minutes. Um, and then I had an email a couple of days later to say that I'd, um, get, receive a refund of seven hundred and ninety pound.
25:09 Martin Lewis? Wow, nice.
25:10 Speaker 06 So, yeah, so I just wanted to say a huge thank you, really. It's the, the easiest five minutes, you know, work I've ever done, so.
25:16 Martin Lewis? That's brilliant. Uh, well, I mean, it was your money, that's the point. So, uh, just to explain for people who don't know, so this is, this is the main reason most people have overpaid student loans. Is that there's a rule that says you only have to repay your student loan if you earn over the annual threshold in the tax year. So I'm guessing you're Plan Two, are you?
25:36 Speaker 06 Yes, I am, yeah.
25:37 Martin Lewis? So Plan Two, the threshold is around twenty nine thousand pounds. So if you don't earn around over twenty nine thousand pounds, you shouldn't repay anything. But the payroll, places you work, take the money based on your monthly income. So they divide the annual threshold, twenty nine thousand by twelve. What's it gonna be? It's gonna be somewhere around two thousand four hundred and seventy, two thousand four hundred and eighty a month. And you repay nine percent of everything you earn above that a month. So in your case, on maternity leave. I, I'm guessing, I don't know which way around it was, but I'm guessing it was, was it when you went on maternity leave or when you came back? Which year was it, if you see what I mean?
26:10 Speaker 06 Um, yeah, yeah, no, I know what you mean. It was when I sort of came back. Um, so it was, yeah, tax year twenty three, twenty four.
26:16 Martin Lewis? Okay, so, so you hadn't been working for, let's say, the first five months of the year, and then you were working for the rest of the year. So that in those months, because your salary was above the annual threshold, they would have taken payments from you, and quite substantial payments. But your total earnings were below the annual threshold and therefore you shouldn't have paid, and that's why you got the money back. And as you rightly say, uh, it's worth getting the money back if you wouldn't clear in full before the debt wipes, because, uh, that way, actually, taking the money back doesn't mean you'll repay anymore in future. And it is a total success, and how wonderful to hear it, Charlotte. Thank you so much.
26:49 Speaker 06 No, thank you. Yeah, just wanted to say a big thank you really. The best thing is I'm on my second maternity leave currently, so I'll be able to do it again, hopefully.
26:56 Martin Lewis? Oh, well done you.
26:57 Speaker 06 When the tax year ends, but yeah.
26:59 Martin Lewis? Have you had the baby?
27:01 Speaker 06 Yeah, yeah, I had the baby in May, so he's six months now.
27:03 Martin Lewis? Okay, lovely, nice. So you've got two. Yeah, okay. We should do the other question. Do you know, should I tell you the most terrible question that I say to new parents?
27:12 Speaker 06 Sure.
27:12 Martin Lewis? Okay. Have you thought about life insurance?
27:16 Speaker 06 I have, and I have life insurance. Me and my partner both have life insurance.
27:20 Martin Lewis? I'm delighted to hear. What parents always ask me is about children's savings. And I always flick it back and say, look, one of the biggest things you've got to worry about, you've got to worry about, heaven forbid, that something were to happen to you while your children were still, you know, in your care before they're 18, when they're dependents, then thinking about what would happen to the finances so it doesn't compound with the grief and who would look after them, heaven forbid you both went. It's the most morbid conversation. But as a child who lost a parent before I was 18, it's something that I'm always quite passionate about saying. So well done for getting everything ready. Of course you did. You listened to the pod. Of course you did have it. Thanks so much.
27:57 Speaker 06 I definitely heard that from you. Thank you.
27:59 Martin Lewis? Cheers. And I wish you, wish you and your family all joy and happiness in future.
28:02 Speaker 06 Thank you so much. Take care.
28:04 Martin Lewis? Bye bye.
28:07 Martin Lewis? That's it for this week's Question Time. Don't forget to subscribe so you know when we release a new episode. We put out a new Question Time every Monday alongside the regular podcast on a Thursday. Aren't you lucky? Two doses of money-saving tips and tricks a week. Make sure you do send in your questions. Just email [email protected] . Ta ta.
28:45 Martin Lewis? Martin Lewis is the founder of moneysavingexpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing
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