Pod Insights The Martin Lewis Podcast Car Insurance Prices DROPPING… a perverse warning | Base rate cut help About this episode Martin explains why you should still shop around for the best deal, even if your car insurance renewal is lower than last year. Plus reaction to the interest rates cut, the latest on April's energy cap price change and you tell us what your job has taught you about money. To get in touch with the podcast email [email protected] mailto:[email protected] .
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0:42 Martin Lewis? Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's all going to be about. Now, usually much of it comes from my BBC Radio Five live show with Adrian Charles, but don't worry, there's bonus money saving tips just for you lucky, lucky podcast listeners. In today's pod, the big story, an important but somewhat perverse warning for anyone who pays car insurance. The Bank of England cut UK base rates by 0.25 percentage points live during the Five Live show, rather convenient of them. So what does that mean for mortgage holders, savers, credit card customers and loan holders or getters? This week's tellers is all about what did you learn at work that you now use in your own finances?
1:27 Martin Lewis? We hear from builders, credit controllers, debt counselors, retail staff and more, including one social worker with fascinating views on money and social mobility. Really is worth a listen, that one. In quick tips, there's an update on energy prices. It's not good news, you really do need to look at fixing now, a tax saving loophole for electric vehicle drivers and a warning for Sky TV customers. And this week's mastermind question, if you pay online but collect in store, do you get the normal online purchase protections? You'll find out soon. Play the theme tune.
2:21 Speaker 05 Do you know, I think you're a rather good mover, Martin.
2:24 Martin Lewis? I did, I used to dance.
2:26 Speaker 05 Did you?
2:27 Martin Lewis? It's a secret.
2:27 Speaker 05 When did you start?
2:28 Martin Lewis? When I got married.
2:29 Speaker 05 Yeah.
2:30 Martin Lewis? I used to go at dancing a lot. I used to have two dance partners who used to do quite a lot of proper dancing.
2:34 Speaker 05 Oh, you mean proper dancing?
2:35 Martin Lewis? Proper dancing, yeah. No, I used to dance about 10, 15 hours a week, which is amazing for fitness.
2:39 Speaker 05 All right.
2:40 Martin Lewis? I'm very good when you were single, but we shouldn't get into that.
2:42 Speaker 05 What's your take on the, on the interest rate news, a quarter point cut?
2:46 Martin Lewis? Well, I've just been speed reading it. The first thing to say is the vote was seven to two, but not necessarily the way you expect. Seven were in favour of a quarter of a percent cut, the two were in favour of a half a percent cut. Now, that in itself is a signal of a downward trend coming in future. The markets have been predicting about another percentage point off interest rates over the next year. I think reading this, and they write it in such a turgid Bank of England type way. Based on the committee's evolving view of the medium term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary polity saint is appropriate. I still think that means interest rates are probably coming down over the next year, and there's a whole lot more of that in there. So it's a quarter of a percent rate cut.
3:26 Martin Lewis? I would expect more rate cuts to come over 2025, maybe at this time next year will be 3.75% or 3.5%. In practical terms, what that means for people's personal finances, which is of course my side of this. Let's do mortgages first of all. If you are on a fixed rate mortgage, nothing happens. And nothing will happen until your fixed rate ends. That's the definition of a fix. Most people are still on fixed rates. If you're on a variable rate mortgage, which could be a tracker, it could be a discount, it could be a variable, it could be the standard variable rate, which is a very expensive rate, and if you're on that, you want to get off it. Then your rate is likely to drop by around a quarter of a percent, and it can take up to a month for it to do so.
4:07 Martin Lewis? A quarter of a percent means that your mortgage repayment will drop by about £15 a month per £100,000 of mortgage. So you have a £200,000 mortgage, that would be £30 a month. If we move on to savings. Well, savers again, if you've got a fixed rate saving, nothing will happen. If you've got easy access savings or variable rate savings, which many people do, the standard where you can put money in or take it out, expect a rate cut. I would expect those rates cuts to be coming within two to four weeks. Again, you're going to drop about a quarter of a percent of interest, although we have seen a lot of competition in the easy access cash ISA market at the moment that has kept rates up even though Bank of England base rates have gone down.
4:51 Martin Lewis? Trading 212 is still paying 5.16%, even though the base rate was 4.75%. It's also worth noting, there could be a sweet spot today if you want to fix your savings rates, that I suspect fixed rate savings will come down a little bit more. Some of the cut has already been factored in, but they tend to do it in tranches of savings. So what I say, what that means is they'll say, we want to get in £20 million worth of savings at this rate. Once that's gone, that's gone. So you might still be able to get a fix now before the rates start to drop. I won't see that bigger saving coming in it. Credit card rates will hardly change because they're so much above Bank of England base rates anyway, 25% average. Personal loans, as they're a fixed rate and the long-term look of interest rates is dropping,
5:34 Martin Lewis? we might see personal loan rates shave off a little bit. But that is the panoply of personal finances and what the impact of the base rate is on them.
5:45 Speaker 05 If I might make an observation, Martin, we're starting to dress similarly.
5:49 Martin Lewis? That's not good.
5:50 Speaker 05 No, we've got, we've got, what do you call this? What's that neck called? Not a V-neck, a...
5:55 Martin Lewis? We've got a round neck with a, well, you've got a collared shirt, I've got a collared T-shirt, I've got a, you know, a polo shirt on.
6:01 Speaker 05 So we've got a round neck with a collar underneath it.
6:03 Martin Lewis? Yeah, I don't know, it's because I'm on a non-telly day, so I'm sort of casual because I'm just running about and I've got jeans, you've not got jeans and trainers.
6:12 Speaker 05 Yeah, and trainers. Similar, similar. We're getting there. Actually, an interesting phenomenon, I really do pay attention to what you're saying on this programme about various matters. And then I get home and I have to make a decision about exactly what we've been talking about and I don't know what to do. So... Here it is, I can go on a fix sixteen month contract, I'm not asking you to advise me, I'm just telling you. I felt ashamed that I didn't know what I should do, I said you can go on, it's for energy. A sixteen month contract, slightly lower than what I'm paying now. Or I can go to one that is guaranteed to be fifty pounds below the price cap for the next twelve months. So, I thought, I looked at it and it was just a load of words and numbers.
6:52 Martin Lewis? So you're with Eon Next then, are you?
6:53 Speaker 05 Yeah, whatever, yeah, yes, that, I get, yeah.
6:57 Martin Lewis? Yeah, because I recognise the fifty pound tariff. Um, well, first of all, why are you sticking with your own supplier? Why are you only making choices from the person, the company that you're with at the moment?
7:06 Speaker 05 Well, I think the market's been explored, I think.
7:08 Martin Lewis? Okay, all right, so let's, let's just go, let's go into the basics of why I'm doing an update today. So, the, the energy price cap that affects eighty percent of homes in England, Scotland and Wales, it's the tariff you run if you've done nothing. If you haven't fixed or your fix has ended or you haven't made a decision. Changes every three months, the next change is coming on the first of April, it went up about a percent in January, it went up ten percent in October. Now, the assessment period for the price cap. Because it's assessed based on an average of wholesale rates, that's the main underlying factor, there are other factors too. Over three months, ends in just under two weeks. So we're ten twelfths or five six, if you prefer me to simplify the fraction. Five six of the way through the assessment period.
7:52 Speaker 05 Right.
7:53 Martin Lewis? Now, what has happened in this assessment period is, week by week, I get predictions from lots of the big firms who come out. Because it's a published algorithm and it's, the underlying rates are known of what's going to be happening. And week by week, they've crept up. But over the last week, they've jumped up. So, a couple of months ago, I was saying it was going to go up one to two percent in April, then I was saying three percent until a week or two ago. Now, EDF is predicting a five percent rise in April. British Gas is predicting a five point seven percent rise in April. Eon Next is predicting a six point three percent rise in April. And that is a pretty firm prediction because we are five six of the way through. I mean, think how much energy prices would have to crash for two weeks worth of low energy prices to, to be able to factor in, it's not going to happen.
8:38 Martin Lewis? Are going up, the only question is how much and it's looking like we're going to see another 5% rise in April. And then if we keep the crystal ball gout, but it gets much hazier the further out you go because we're not in an assessment period. Then it's looking like in July, it will probably go up a little bit and stay about the same as that in October. So if you take your question, should I fix? You are being given a contrast on a fix to today's price. But it is very likely in April, if you stay on the price cap, your price will be 5% higher than it is today. And then higher again in July and then about that level in October.
9:18 Martin Lewis? So if you can fix and lock in to save your price now at a lower rate than you're currently paying. Well, then it will almost certainly, because these predictions are almost certainly locked in, be substantially cheaper than what you would be paying in April. Now, the cheapest fix on the market at the moment is 6%, on average, is 6% less than the current price cap. So if you think about it, 6% less than the current price cap, if the price cap goes up by 5%, that's about 10% less than the April price cap. And it's looking to stay that way until about January. After that, it gets very hazy, the crystal ball. So it is absolutely for anyone who values price certainty, it is a virtual no brainer to be fixing at the moment.
10:00 Martin Lewis? So I would, now, the way I would fix is I'd go onto a whole of market by default comparison site. Most comparison sites, what they do is they hide tariffs that don't pay them. So you only see the ones they have a commercial relationship with. There are some, which I can't name, and you can probably work out why, that are whole of market by default, automatically show you all the tariffs, even those they don't have a commercial relationship with. And I think it's important you're looking across the whole of the market. You asked me, I'm going to go back to your initial question on this. Your question was effectively, should I go for a tracker tariff, which is £50 cheaper always than the price cap? Or should I go for, or should I go for a fix?
10:39 Speaker 05 Yeah.
10:39 Martin Lewis? Well, 3% cheaper than the current price cap. You can fix it that lower anyway and the price cap is going to go up. I would not be doing the tracker right now. The only tracker I might look at is if I were a very low user, under around £135 a month, which I'm guessing you're not. If you're under around £135 a month, Eon Net, no, EDF, has a tracker that discounts the standing charge by £100. So for low users, that's very good. So I'd look at that one, but for everyone else, I'd either be looking at fixing. I would get yourself off the price cap, or as I have renamed it, the pants cap. It's a pants cap. It's not a good price. You shouldn't be on the pants cap. Get yourself off the price cap by doing a comparison.
11:23 Martin Lewis? Or if you're more sophisticated, you can have a look at the octopus time of use tariffs or the tomato time of use tariffs. And there are some more sophisticated tariffs out there. But if you're not, if you, if you don't know, just get, just go and get yourself the cheapest fix you can get with a company you're going to trust.
11:36 Speaker 05 I'll be just, the, the language is so important here, like Leanne.
11:40 Martin Lewis? Pants cap, you mean?
11:40 Speaker 05 Yeah, the pants cap, yes. But Leanne has said, well, I mean, on one level, it's a daft question. On the other level, I can, I'm absolutely with her. I can see why this, on this arises.
11:50 Martin Lewis? There's no daft questions agents, some daft answers in mastermind, but there are no daft questions.
11:54 Speaker 05 But why is it called, why is it called a price cap when it's always rising? You can kind of see how that.
12:00 Martin Lewis? Because it's a three month rolling price cap. I mean, look, there's lots of problems with the price cap because it's actually a rate cap, not a price cap. There is no cap on the total cost that you pay for energy. What happens each time is the regulator comes out with, depending on the region, it varies by region and payment method, it comes out by a maximum standing charge. That's the daily charge you pay and a maximum unit rate. So of course, the more you use, the more you pay because the unit rate is fixed for your area. Now firms can go lower than the price cap, which is why it's called a cap, not a fix. But none of them do. And the perverse energy system we have in the UK right now is the entire model has for decades been set up on a competitive market.
12:43 Martin Lewis? It's been set upon this idea that you can move around and if you, if you shop around, you can get a cheaper deal. Well, you, you can't get that much of a cheaper deal at the moment. The other way to do energy is to have regulated pricing. So, and we'd have that because 80% of people are on, it's the regulator. You know, when I tweeted about this the other day, it was massive, went viral, got about four million views. And lots of people are saying, when are you going to call out energy companies profiteering by putting their prices up? It's not the energy companies, it's the regulator. The regulator sets the price cap. Yes, firms are pricing to the max because what we've effectively done, we've taken away competition. There's no competition in the market. They're sitting on their oligopoly customers that they can sit on top of at the price cap rate and bring the money in.
13:25 Martin Lewis? I mean, we have to be honest, we privatized our energy market, we sold it. So, an energy firm's job is to make money for its shareholders. Its job is not to keep us warm, its job is not to keep our prices down. The people whose job is to keep us warm and our prices down are the regulator and the government. So, getting mad at energy companies for making profits, which when they're shareholder based companies, that's literally what their task we're doing. We perhaps need to look at why is our energy market so broken? Why is the regulator not intervening more? Why hasn't it got the power to intervene more? And why is government of all shades over the past decade or so done absolutely diddly squat to really look at what's going on with the consumer energy market? So, yeah, and the price cap itself was something I was never in favor of.
14:10 Martin Lewis? I was always in favor of a social tariff initially when it came in.
14:16 Speaker 05 Car insurance then?
14:17 Martin Lewis? Yes.
14:18 Speaker 05 Well, what do we need to know about?
14:19 Martin Lewis? Okay, so I have a perverse warning on car insurance. This is it. Car insurance prices have dropped. They have gone down. After year after year rises on car insurance, now we finally have the opposite. So, 16% down year on year is a pretty consistent figure across lots of different people who are monitoring this. Some say it's up to 20% down, but that's on the back of huge rises. So, we're nearly 60% up on the 2021 price, but we're down 16% on last year's price with an average price of 834. So, what is my perverse warning? It's this. When you get your renewal.
15:05 Martin Lewis? If your price is the same, because everybody has been so used to year on year rises, people going, oh, my renewal hasn't gone up. Great, they're finally giving me a decent deal. No. If your price is the same, then you are still paying too much because the market has dropped by 16%. My perverse warning is a warning against complacency. The market has come down. This year, on average, you should be paying 16% less than last year. If your price hasn't come down by about 16%, then what you need to go and do is make sure you are checking across the market to see if you are still overpaying. So you understand
15:47 Martin Lewis? the nature of the warning. The nature of the warning says, when you get your renewal this year, don't think, great, I'm paying 800 quid, I'm now paying 790, they brought it down. Because if you're paying 800 quid, you should be paying, you know, over a hundred pounds less this year. And so that's a really important message I want to get out on car insurance. Markets come down, your price should be coming down. If it's not coming down substantially, make sure you check out whether you can get a cheaper deal.
16:11 Speaker 05 Is your advice, is your advice to reinsure a month ahead for renewal of car policies?
16:18 Martin Lewis? 26 days.
16:20 Speaker 05 Go on.
16:20 Martin Lewis? Okay, so, we've done, this is an analysis of about 18 million quotes. I mean, I can actually show you the graph, Adrian. I'm going to, can't show that, but, so I've got a graph here that says days till renewal. I'm showing it to Adrian now. Now, if you start on 30 days to renewal and the car insurance price is a thousand pounds, when you get to, a slightly old graphic, it's now 26 days, when you get to 26 days, the price is around 800 pounds. By the time you get to zero days, the price is up to around 1300 pounds. Now, what is happening here, this isn't your renewal price, this isn't the date that you renew with your existing company, this is the date which you get quotes for a new company. So you always want to be getting quotes around 26 days before you want the new policy to
17:05 Martin Lewis? start. Now, I need to be honest, if it's anything between about 18 days and 28 days, you're pretty fine. 26 is the sweet spot, but I wouldn't worry 18. Why does this happen is the obvious question. Why on earth is it cheaper depending on when you do it?
17:22 Speaker 05 This is you having said the day on which you need the re- the.
17:25 Martin Lewis? No, no, so, so let's say your, your, your renewal, your insurance is up on the first of March.
17:30 Speaker 05 Right.
17:30 Martin Lewis? Right. So the day you should be getting quotes across the market, your insurer is going to send you a renewal note. It might be two weeks before, it might be a month before.
17:37 Speaker 05 Yeah.
17:38 Martin Lewis? That's, that's your renewal. That price is irrelevant of when they send it you. It's about the price when you go and get quotes across the market. When you go onto a comparison site.
17:47 Speaker 05 Yeah.
17:47 Martin Lewis? That's the 26 day date. Okay.
17:50 Speaker 05 Right, okay. So you must be declaring when you want the insurance to start.
17:54 Martin Lewis? Well, yeah, you want it to start the day that your current policy ends.
17:56 Speaker 05 Right, okay, yes.
17:57 Martin Lewis? So that's, that's what you need to put in your diary. So here's how it works. Insurance pricing is about actuarial risk. It's literally risk tables of millions and millions of cases, looking at how people behave. And how much they generally have to pay out on the back of that. And what insurance data shows is the people who renew on the last day are riskier. That's it. You're riskier if you are reshoeing, insuring at the last minute, and you can sort of understand why that behavioural trend works, can't you? Because people insure at the last minute, haven't put that much practice in and aren't, aren't as prepared and aren't as organised as everything else. And that translates to actuarial risk. It translates to the amount of claims. So what you have to do is shift yourself into the risk category where people are the lowest risk. And the lowest risk is around three to four weeks before renewal.
18:42 Martin Lewis? If you're getting quotes then, those are the people who claim least, so get the best prices. And this can actually make a 50% difference. And I've got, I can't tell you how many successes I've had over this year. I mean, thousands of people are like, I can't believe it. I renewed earlier and my price is just so much cheaper. So you need to put in your diary around 25, 26 days before your policy ends. And that is the date you need to get quotes. I'll give you an email from Ian. Ian emailed, brilliant advice, best price, about 21 days before expiry date, was 340 day, 340 quid. But he checked the day before expiry to see if this was true. Same company, 637 pounds.
19:21 Speaker 05 Kevin points out he only gets his reminder about the renewal quote from his existing provider 14 days.
19:27 Martin Lewis? I don't need your excuses Kevin. Kevin, I want you to do now, you've taken enough oomph to get into such a through the programme. Go and check when your car and your insurance renewal policy ends. Go and put in your diary 26 days before that, or maybe four weeks before that, so you give yourself a couple of days in case you're busy, that it's time to go and get your quotes. Send yourself a delayed send email. That is my new organisational system. I do it all the time. I send myself emails and reminders, like I'm doing a programme on something in six weeks' time, two days before. A reminder not to forget something. I've got about 200 emails waiting to be sent in my outbox. Do whatever it is that you take. Of course, they're not going to send you the renewal till 14 days. They want to send you the renewal date, so you go, oh, I'd better just renew. I'd better not go and check the market. They want to disrupt organisational process because it keeps you an incumbent customer.
20:12 Martin Lewis? We need to disrupt it so that you're going to go and check the cheapest way. Now, just a quick one on comparing when it comes to car insurance. The most important thing to understand is comparison sites aren't comparison sites in car insurance. They're marketplaces. Because, and this changed about five, six, seven years ago. The rules change, so car insurance comparison sites can have their own prices as long as it is not more than going direct. So you should never get a price that's higher than if you went direct to an insurer, but you can get a price that's lower. And they can negotiate with the individual insurers to be cheaper. So the reason I would always do two or three comparison sites is firstly, they don't all cover the same insurers and brokers.
20:55 Martin Lewis? And secondly, even when they do cover the same insurers and brokers, they don't all have the same prices. So if one of those car insurance comparison sites has a good deal on with a company whose underwriting matches your criteria, so it's cheap. You may find yourself getting a much better price on one comparison site than other comparison sites. So always do two or three. Don't rely on one. And that's my secondary message today. Today is make sure you're comparing. Don't just auto-renew, even if it's gone down a little bit. Because at the moment, on average, it should be going down more. So, car insurance prices have gone down 16%. That means many people, and they've gone down quite rapidly in the last six months or so. So, many people are overpaying right now.
21:39 Martin Lewis? Now, a lot of people only do their car insurance quotes at renewal. If you're particularly on top of your finances and wanted to do a check now, even if your renewal was in six months' time, that's not a bad thing to do. I would get yourself onto a car insurance comparison site. I would put in the date you want your policy to start to be 26 days in the future, because that's the sweet spot and that gives you the cheapest price, because most of them won't let you say, "I want it to start in six months' time." It has to be more soon, so put 26 days in the future. If you, this is only for people who haven't claimed this year. If you haven't claimed this year and you find you can get car insurance now substantially cheaper than you're currently paying, it also means you're locking in for a year ahead, that price.
22:24 Martin Lewis? Well, you are entitled to cancel your existing car insurance, get a pro rata refund for the rest of the year, and most will charge you an admin fee of around 50 quid for doing so. Now, I would always check what the admin fee is before doing this. I'd always make sure you've checked all the details before you actually cancel. And then, you get your new insurance and you cancel your old insurance and it can be a lot cheaper. This is especially useful for anyone whose major circumstances have changed. Say you've changed car or you've moved house. At those points, those are really important to be doing a mid-year check. Anyway, I know you've got loads of questions.
22:58 Speaker 05 John Ryan, quickly, are multi-car policies worth it?
23:03 Martin Lewis? Yes and no.
23:06 Martin Lewis? Here's my general rule of thumb. If you're on a multi-car policy, check separate policies to see if you can save. If you're on a separate policies, check multi-car. Often, it's the opposite to what you're on because of the legacy pricing models that tends to be the cheapest way around. So, what is multi-car? Multi-car is where, and there are, it's Admiral, LV, Aviva, Elephant and Diamond have those policies. A lot of people don't do them because their car renewals aren't at the same time. Actually, they all have systems that you can work through that on. It is worth checking those. The problem with multi-car is you can't do it on a comparison site. So you need to check your separate comparison sites for individual cars and then you need to get your multi-car quotes doing it that way. But it can be, I have, I have lots of people getting in touch saying, I can't believe people aren't on multi-car.
23:50 Martin Lewis? I've saved 800 quid by insuring all my cars together. And other people who say, oh, I was on multi-car and I've just found it's 800 quid cheaper getting them all separate. It's elbow grease for that one. Worth noting, as well as multi-car, AXA, Direct Line, Churchill and Privilege all offer discounts for multiple cars. So if you've got separate insurance policies with the same firm, even though they're not on one policy, they will give you a discount for having, so, you know, for example, if you're doing a comparison and one of the cars in your household is already with one of those firms, it's worth checking those firms because the discount might bring it cheaper at the comparison. And finally, while I'm on it, if you've got home or other insurance with a firm, Direct Line especially tends to give discounts of 10% or more.
24:34 Martin Lewis? So if that were cheap and you finding it had a cheap price and you had your home insurance with it, that may be able to save you. But multi-car policies are always worth checking if you have two or more cars in the household, but they won't always win.
24:47 Speaker 05 I like the way Debbie's worded this. Why does my car insurance increase if I remove my husband? I mean, she means remove them from the insurance. I take it, she means.
24:56 Martin Lewis? Well, it's very important that that does and doesn't, does happen and people understand. So what happens in car insurance, there tends to be average of risk rather than a cumulative risk. So Adrian, shall we get married again? We do most times. So Adrian and I have just got married, or maybe we're cohabiting this time. Maybe we're not quite so sure in our relationship, but we cohabit and we have our own cars. Now, what happens in car insurance, you're insured on your car.
25:23 Speaker 05 Yeah.
25:24 Martin Lewis? And you decide you want to add me as a second driver. Now, you may think that what happens is, well, there's a second person who could drive it, that's upping the risk. But actually, because only one of us can ever be driving it at one time, it's actually averaging the risk between the two of us. So if I am deemed to be a lower risk driver than you, then I may bring our price down because our average risk is lower in combination.
25:47 Speaker 05 But how does the actuaries? Know how often you drive, you might drive in it once a year or three hundred and sixty four days.
25:53 Martin Lewis? It's statistical average, it's statistical average based on profession and all the differences between you. It's not, I mean, unless you've got a black box, which can be very good for young drivers, which is measuring the way you drive. It's based on the statistical difference between us. And actually, as we both, I mean, it depends what you put yourself down is your occupation, occupation have a big impact. By the way, tweet your job details. Just check and there are tools out there available online where you can check your job description now. I'd never lie, only you should only ever call yourself something that a reasonable person would say is true, true. But bar staff or bar steward or bar manager or P A or secretary. All of those nuanced differences can actually change the price. So it's worth finding out what the best job title for you is. Now, so going back to it, in this case, who, what's the name of the person? Sorry.
26:36 Speaker 05 Uh, that was Debbie Smith who's.
26:38 Martin Lewis? And Debbie, removing her husband, it sounds like her husband statistically is a lower risk driver. So when you remove your husband, you're effectively increasing your risk as he was bringing down the risk average. So how do we utilise this information? This is incredibly important, especially for young drivers.
26:56 Speaker 05 Yes, yeah. This is from Jenny, twenty two year old daughter, just passed a driving test and it's costing a fortune. Also, uh, someone else trying to get, uh, a twenty year old boy recently passed test trying to get insured and his parents can't be quoting nearly four thousand pounds.
27:12 Martin Lewis? Now, again, we're in an elbow grease situation because different insurers look at different things differently. The first thing to try is adding an older responsible driver to the insurance, someone who could legitimately drive the car as a second driver. Possibly even adding a second and third driver, you know, so dad and mum, for example, would be obvious ways to go forward in the case of a young driver. Put them a second and third driver on the car insurance and see the impact on price. And do that at a number of different insurers because each one can look at it, it's work. You know, you can do it via a comparison site as well. Try different ones on a comparison site to go forward. That can has a massive impact on the driving. Dad may be better than mum, mum may be better than dad, the two of them together may in combination be able to bring the price down.
27:55 Martin Lewis? Because of that risk averaging, a very important warning, I actually, someone I, who shouldn't have gave advice the wrong on this. Let me be very plain on this. If it's your daughter's car and she's the prime driver, you should not put yourself as prime driver to bring the price down. That is known as fronting. It is illegal.
28:18 Martin Lewis? It's potentially fraud and it can invalidate your insurance. It is perfectly legitimate to put someone down as a second or third driver who may plausibly drive the car, but it is not legitimate to put them down as a first driver when they are not the first driver. So that's what I'm talking about, adding a second or potentially third responsible driver. In terms of the, the young person, bizarrely, which is cheaper, Adrian, it's not a mastermind question, but it could be, which is cheaper, third party insurance or comprehensive insurance?
28:49 Speaker 05 One would assume it's comprehensive insurance.
28:52 Martin Lewis? Really?
28:53 Speaker 05 Oh, cheaper, sorry.
28:53 Martin Lewis? Cheaper.
28:54 Speaker 05 More expensive to comprehend, yeah.
28:55 Martin Lewis? I mean, you would assume naturally third party covers a lot less comprehensive.
28:58 Speaker 05 I've told you can't even get third party now.
29:00 Martin Lewis? You, you can still sometimes get third party and many people looking for cheap prices look for third party. Again, a bit like doing it on the right date, in some cases, the fact that you choose comprehensive lowers your risk profile by more than the fact it's a higher form of cover increases it, so can bring your price down. So look, let's just go through, looking at your job description is important and what you're going through, comprehensive can beat third party, all trial and error. None of these are, none of these are hard, these are all soft. Adding a second or potentially third driver, paying annually, not monthly, that's pretty fixed. If you pay insurance annually, what is happening, they, if you pay insurance monthly, they are getting you a loan to pay it monthly and charging you an APR afterwards.
29:45 Martin Lewis? Those APRs can be 40%. You always, if you possibly can, want to pay annually. There are a couple who have 0% interest, but most don't. If not, if you have a passable credit score, putting it on a 0% credit card and making sure you pay it off within the year, within the 12 months, don't leave it longer or you're going to be paying double car insurance for next year as well, will be cheaper if you can do so. And potentially, if the APR is so high, it's, you know, it's 30%, even putting it on a normal high street credit card at 25% APR would be cheaper than paying for it by the month. Paying car insurance monthly is a loan, it is not a monthly policy, it is a loan and it affects your credit file.
30:28 Martin Lewis? So be very careful on that. Again, for the young people, I'd be looking at black boxes, which monitor the way that you drive or the time that you drive and go in the car and they can bring your prices down or you can even have, they're even pay as you go, so you only pay as you drive going in there. Those are all the type of things I'd be looking at. Yes, that isn't the end of car insurance. You've got lots more questions and I will be doing some more of them and I might even give answers to later on in the show.
30:57 Martin Lewis? So this week's tell us very simply scrolling to the top of my page, I can remember the exact text. What has your job taught you about money? What do you did you do? And what was the lesson that you've brought into your own finances? Have you got one to read out to start?
31:10 Speaker 05 Yes, Rav Roberts on Twitter, working capital management. Specifically, collect payments as early as possible and pay bills as late as possible, close to the due date. Amazing how many companies don't do this basic thing. It's not really cricket though, is it?
31:23 Martin Lewis? Well, if it's legal, it's legal. I mean, it's basically, but we can, the place that I would always put that one into is anyone who's overdrawn, you should be moving your direct debit so they're paid the day before you paid. That way you'll be overdrawn for a lesser amount across the month. It will reduce your overdraft costs and help you get out of debt. Gail on Facebook, I'm a quantity surveyor. My job has taught me, you can always negotiate a better price. Never pay for anything upfront. Have a budget, track as it as you go. If you go over budget somewhere, you must reduce it somewhere else.
31:57 Speaker 05 The Densky on X, being a roofer, being a roofer on price, you tend to look at what you yearn earn yearly rather than week to week due to less hours of daylight and weather. So I do the same for everything. It also helps you to cut down when you realise that Greg's every morning is the price of a holiday over the year. Okay, I get the Greg's every morning. I'm not quite sure.
32:19 Martin Lewis? Let me give you a quick test. You ready Adrian?
32:21 Speaker 05 Yeah.
32:22 Martin Lewis? There are some golden numbers when it comes to saving money and reducing your spending. 12.
32:28 Speaker 05 Yeah.
32:29 Martin Lewis? 52. 365.
32:31 Speaker 05 Yeah.
32:32 Martin Lewis? 250. What are they all?
32:35 Speaker 05 It's 250 working days.
32:37 Martin Lewis? That's it. That's 250 is working days. So if you buy a Greg every day at work and it costs you two quid, that's £500 a year. That's what those golden numbers are. Three, six, five every day, fifty-two every week. I mean, you might have some weeks on holiday and twelve every month, but there's a very easy little bit of maths to do in your head. Let's do Amy. I'm a debt advisor for a charity. My job has taught me lots of obvious things about money, but the less obvious thing is talk, talk, talk. Be honest and open about money. Teach your kids about budgets and get them involved from a young age in managing the household budget. Amen, Amy. Torture your partner. Tell your friends how much you earn. Stop being unashamed and embarrassed about money. Ask for help. Oh, Amy, I so agree. And it's obvious you're a debt counselor
33:20 Martin Lewis? because you see the similar things that I do. One of my messages when I do my debt programs on the telly is actually, we need to be honest with our friends when we're struggling with our finances. So they don't put peer pressure. Oh, come out. Oh, it's only a dinner. It's a you're actually saying, look, I'm struggling. I'm trying to pay off my debts at the moment. Can we do something else? Honest and upfront can take the pressure off.
33:40 Speaker 05 We've got a caller. Neil, so you worked at the Official Receivers Office? It seems like a lifetime away. But at the start of my career, I was at the Official Receivers Office, now known as the Insolvency Service, interviewing people that have been made bankrupt and directors of companies that have been put into liquidation. And yeah, some of the stories and the people that I met have informed my opinion on finance, my own personal situation. Essentially, what it'll mean is that my, my risk reward level is, is very much on the risk side of things. So I'll never be a millionaire because I won't take those risks. Similarly, seeing people come through the door who'd got themselves into a whirlwind of debt through high APRs, but also those individuals that were able
34:22 Speaker 05 to, to, to stomach so much more risk and just play the system, they tend to win in the long run, unfortunately.
34:29 Martin Lewis? So you're saying it's made you higher risk or lower risk?
34:32 Speaker 05 Oh, no, much lower risk, much more.
34:34 Speaker 03 Prudent in terms of my own personal finances.
34:36 Martin Lewis? So you you've decided you you to be the tortoise, not the hare. Slow and steady.
34:40 Speaker 03 Yeah.
34:41 Martin Lewis? Right, and.
34:41 Speaker 03 Absolutely.
34:42 Martin Lewis? Yeah, and and I think, you know, that's prudent for most people. It doesn't mean it's wrong. I mean, gearing, which is is all about high risk, if it pays, you know. Uh, let me explain gearing very briefly in a in a sensible way, you'll understand this. So let's say you buy a house, but it's not for you, you're renting the house out. And you buy a house, we've you put a ten thousand pound deposit. And you got a ninety thousand pound mortgage, we'll call it a hundred thousand pound house, let's pretend that those are easily available these days. Gearing means if the house goes up fifty percent in value, you've effectively made. If we ignore the interest cost just for simple sums, you've made fifty grand on ten grand, woo hoo, five times your money. Because you were borrowing the money to to invest it, effectively. But if the house tries price halves in value.
35:25 Martin Lewis? Well, you've lost fifty grand on your initial ten grand investment. So gearing accelerates the rewards if it goes well, and accelerates the losses if it goes wrong. Now, that doesn't mean good or bad, but exactly as we're discussing here. It means you need to be aware of your risk tolerance, and in the UK, we'd actually tend to have quite low risk tolerance compared to the States. Fascinating.
35:47 Speaker 05 But did you? But another lesson you could have taken away is that some. Some people get away with it. I know why the laws on on limited companies exist, but, you know, there are companies that. Just go bankrupt, leave a load of creditors that owed money, and they just start up again somewhere else. You know, that's.
36:06 Speaker 03 Agreed. It tends it tends to be us, because often the the petitioner was always HMRC. So it's the taxman that loses out in the long run, and some of that been in the news recently with. You know, Lord Mayor or Mayor of London, applicants, things like that. You've got HMRC that that sits there with a huge debt for corporation tax, PAYE, VAT, you name it. And they were the ones that missed out, and that's that's you and I.
36:29 Speaker 05 Okay, Neil, thanks.
36:31 Martin Lewis? Thank you, Neil.
36:32 Speaker 05 Very much for, uh, thanks very much for joining us.
36:35 Speaker 03 My pleasure. Thank you.
36:37 Martin Lewis? Thank you, Neil, and I find these fascinating Claire on Facebook. I've worked in retail, in stores and various head office roles. What's it taught me? Own brand products are usually just as good, sometimes better than the branded equivalent and a lot cheaper. Sometimes it's exactly the same product with a different label. I used to have a list of where people who worked in factories told me when they were making the same product the same way and just putting different packages on it. It got quite litigious. It got quite tricky to do because what they'd often do is they'd have slightly different sugar or salt content. So you couldn't say it was exactly the same thing. They would just, you know, if it's a food or something.
37:14 Speaker 05 Painkillers, I remember doing with you.
37:16 Martin Lewis? Oh, well, painkillers is, painkillers you have approved. So if you're buying, obviously it's the active ingredient on painkillers that matters. So, you know, ibuprofen is ibuprofen, whether it's in Euraphene or whether it's in generic ibuprofen. But more, on the side of all pharmaceuticals and some cosmetics, there's a thing called a PL code. A PL code is a long number. I don't know. It's probably 10, 12 digits long. If a product, if two packets have the same PL code, and you'll often see this with allergy medication, well, you'll have an expensive branded one and a generic one. If it's got the same PL code, then unlike where I was just saying, you know, ibuprofen's ibuprofen, it's the same active ingredients, but the other stuff and how quickly affecting and whether it's sugar coated can be different. Same PL code, it's exactly the same thing. I mean, exactly the
37:59 Martin Lewis? same thing. And you can find two old PL codes on products where there's, you know, one is less than half the price of another. So watching PL codes. Now, go on with Claire. Best before dates are just a guide. I like these people. And food is still safe to eat after this date. Use the sniff and smell test. Some products may have artificially short dates to get you to dispose and replace of. And she says NB, as I was about to say myself, but I'll let Claire do it. Used by dates should be taken seriously. Used by are a health thing. Best before are just the store's view of optimum quality. Then she says, if you see a brand advertising, e.g. on TV, remember this will be paid for in the product price. More expensive isn't always a better product. Yes, retail snobbery. Don't buy things you don't need. If you buy something and then decide you
38:43 Martin Lewis? don't need it, take us back as soon as you can, assuming you're within the refund policy. And compare price per 100 grams. Bigger packets aren't always better value. Well done, Claire. Love it. Love it.
38:53 Speaker 05 Olivia Finuchin worked in retail and that people will buy literally anything if they think it's on sale or that they're getting a bargain. Taught me to be more careful and only buy things that I need.
39:04 Martin Lewis? This is a bit, I'm going to do this one. I debated whether I was going to do this one or not. This is Carrie Ancognito. I'm a social worker and I've learned that money is social and cultural capital. Money gives access to things that poor people need to access for social mobility. Without money, social mobility is restricted and people stay poor. Telling people they can climb their way out of poverty is said by people who didn't understand their own privilege. For example, I grew up in a poor family, but I'm naturally academic, studious and quiet. That gave me the foundations I needed for social mobility. If someone is born poor and doesn't have a mitigating factor, then they don't have anyone recognise their natural talent or help them develop it, that will restrict their potential.
39:48 Martin Lewis? So I've learned that the ability to acquire money requires either money or talent in the first place. I don't buy into the emotive rhetoric about giving children a leg up in life. If I can give my children a leg up, you can bet your last dime I'll be doing it. I give them opportunities, access to clubs, to develop their skills and broaden their social circles. If I have a pot of money when they're adults, I'll give it to them. Because I know money isn't really about having money. It's social mobility, social and cultural capital, reaching your potential, evening staving off poor health. I thought that was interesting.
40:17 Speaker 05 Very interesting.
40:18 Martin Lewis? There's some very interesting stats, probably going off subject, but I'll do it quickly. I need to say, I'm going to semi-make them up because I can't remember the exact numbers, but that they're scale of magnitude correct, if not exactly right. And it came from Professor Nick Barr at the LSE. They did some look and they talked about developmental issues. And they took the top 10% affluent households and the bottom 10% affluent households. And they took the lowest non-mental capacity issue children from the top households, the top bottom, bottom 10% from the top households and the top 10% from the bottom households. By the age of 10, the performance was equal.
40:58 Martin Lewis? By the age of 18, the affluent household's least able children was massively outperforming the most able children from the least affluent households.
41:08 Speaker 05 So there's a divergence.
41:09 Martin Lewis? Massively. It was all about affluence. Now, what was interesting is when you look at university entrance diagrams and you look at equality, if you take the kids from the poorest backgrounds who get good grades, 98% of them go to university compared to 98, 9% from the highest affluent back households. The issue is, very, very few kids from low affluent backgrounds get the grades in the first place. So if you want to look at equality of opportunity, you start it, well, you start it prenatal, but you start it from the age of naught to two is when it matters most and when you can change it round. And that's not it for the tellers, I've got more coming later.
41:49 Martin Lewis? Welcome to Money Mastermind. The current score is Adrian has got seven right and nine wrong, which isn't that bad in a three option multiple choice. It's not good, but it's just not that bad. So, let's get straight on with the question. Now, recently, after getting some TV image consultancy from Radio 2's own, the lovely Ryland Clark, Adrian decided it was time to make a change. His number one priority was getting teeth so white they... Every time he smiles. Try it Adrian, give us a smile.
42:26 Martin Lewis? Now, the reason for Adrian's fail is he went online and ordered and paid for the Tony Blair Tooth Whitening Kit, which included the added... He selected in-store pickup, collected it, took the package home, and then he panicked that the purchase would break the BBC producers' guidelines on political neutrality, so decided he needed to return it. Your question Adrian, what are your statutory return rights in this case? To reiterate, you ordered and paid for the item online, but you opted for in-store pickup rather than delivery. You took it home before you opened it and decided it isn't your cup of tea, though it isn't faulty. What are your statutory rights? A,
43:11 Martin Lewis? it's an online purchase, so you have 14 days to notify them and 14 days after that to return. B, it's a store purchase, as you picked it up there, and therefore you have no return rights unless it's faulty, same as any store-bought goods. Or C, you could have rejected it at pickup because it was ordered online, as until that point acceptance wasn't deemed, but as you took it home and it's not faulty, you've got no rights.
43:35 Speaker 05 Um, well, option C is so Byzantine. I think that must be the, that must be the right, that must be the right answer. But I know there's a legal difference in an online and in store.
43:47 Martin Lewis? There is a legal difference in online and in store. Which is this?
43:49 Speaker 05 I've learnt from you. So which is this? Well, the answer is I don't know, but I suspect, I suspect that's the wrinkle, that you went and picked it up. So at that point, you don't have the protection, if you like, of it being an online purchase. I would think it's C.
44:05 Martin Lewis? So final answer is C?
44:07 Speaker 05 Mm-hmm.
44:08 Martin Lewis? So let me just go through. And just may I just say before I do that, everybody at home, say your answer now out loud, so you're locked in. Well done. So now, correct online purchases, 14 days to notify them and 14 days after to return, as long as the net personalised or perishable, which this wasn't. Store purchase, you have no return rights. C, you could have rejected and picked it up. You ordered this online, but the crucial point is you paid for it online. Therefore, you have no obligation to check online purchase at pickup, though it is advisable in cases of damage and you later dispute whether it damaged when you picked it up or not, especially if it was a used item, but you have no obligation.
44:49 Martin Lewis? This counts as an online purchase. Therefore, I'm sorry, you got it wrong. Play the uh-uh. Now, option C was fascinating because...
44:58 Speaker 05 If I'd paid for it when I went in, sorry.
44:59 Martin Lewis? No, yeah. If you had reserved it online, but paid for it, once you got into the store, option C would have been correct. Then you could have rejected it at pickup. So that's what option C came from, but you didn't. You paid for it online. So you've already bought it. Your acceptance isn't deemed. It's deemed to be. The fact that you collect it yourself does not change the fact that you're under the, under the online regulations. And store bought purchases, unless it's faulty, you have no right of return anyway.
45:27 Speaker 05 From a public service information point of view, I'm almost proud to have got it wrong.
45:31 Martin Lewis? But, yeah, but from a mastermind point of view, that's good. It means seven right and 10 wrong.
45:40 Martin Lewis? Now, let's get back to your car insurance questions. And I've got podcast producer Megan, who's standing in this week at late notice. Thank you very much for doing so. What questions have you got for me, Megan?
45:49 Speaker 01 Jackie Mole on Facebook says, my husband is 55, has been driving professionally for 35 years, never made a claim yet, insurance is going up each year, why?
46:00 Martin Lewis? Well, making a claim, of course, is always a factor in whether your claim goes up. But ultimately, this is the underlying cost of insurance. Now, some of this is because of genuine inflationary rises that we've seen. I mean, obviously, we're doing this in the context that the insurance has gone down in the last year, but why did it, are we still 60% higher than we were in 2021? You know, the 16% drop is on the back of really high rises in the past. Much of that is due to general inflationary factors, but more specifically, the huge hike in the cost of used cars, which meant that insurance companies, the replacement value that they're having to pay to get similar type of cars and bringing all that up, has gone up. I mean, and so much so, I'm not here to defend the insurance industry and I wouldn't do
46:43 Martin Lewis? it, but we have certainly had some big insurers, you know, being in financial trouble and producing losses in their results. So while it's easy to argue it's always profiteering, this is, tends to have been about underlying factors pushing costs up, rather than necessarily just continued growth in profits from insurance companies. It's just, it's just a bit frustrating, really, isn't it? But, you know, it's difficult to bring it round. What else do we have?
47:08 Speaker 01 So Christine Map on Twitter slash X says, why do no-fault claims still seem to push up the price of your policy by so much?
47:16 Martin Lewis? Well, I always revert to the same answer that I'm giving for everything else. This is all about actuarial risk. This is about looking at millions and millions of cases and saying, if you're in this situation, what is your risk? Now, it's as simple as the fact that if you've been in a position where you've had a no-fault claim, then statistically insurers calculate that you're more likely to be in a position where you will have a claim in future, therefore, you're a higher risk than someone who has never been involved in a no-fault claim. And you can actually see the logic in that, much as it makes you want to grind your teeth. But you're asking me for why, I'm not justifying it, I'm explaining it. That's why. That's why.
47:58 Martin Lewis? And of course, it's worth remembering, when people talk about, you know, no-fault and no, and no-claims bonus, I'll just move it on to that for a second. The same thing happens. People who have a no claims discount or a no claims bonus, you have a discount of your price. So if your underlying car insurance price for simple numbers is a thousand pounds and you have a 20% discount, you pay 800 pounds. Now, let's say that you have a claim, you have a no claims discount protection, you have a claim. The fact that you've had a claim puts up your actuarial risk. Let's say you're now paying 1,200 pounds. You keep your 20% discount, 20% off 1,200 pounds
48:37 Martin Lewis? is 240. So you're now paying 960 quid. The fact that you had a no claims discount doesn't mean they can't increase your cost. It means you get the same discount. And people are often confused by that and very frustrated by no claims discounts within that context.
48:54 Speaker 01 And there's another one here from Andrew James on X. He says, cars are so much safer every year and the introduction of 20 mile per hour speed limits has significantly reduced accidents. So why on earth is car insurance increasing significantly year after year? As no claims are accrued, the policy costs only ever rise. It just doesn't add up.
49:13 Martin Lewis? Well, it isn't year after year. It has gone down this year. And I think I've already explained that. It's worth remembering. It's not just about the good drivers doing good things. It's also about the bad drivers doing bad things and often uninsured, all of which factor into the entire market.
49:27 Speaker 01 And one final one here from Dennis Meadhurst on Twitter slash X. He says, my wife, who's 80, is a driver as I'm disabled. Are there any car insurance deals which allow for pensioners with low annual mileage, just over around 2,000 miles a year?
49:42 Martin Lewis? Well, the lower your mileage when you're doing a claim, generally the lower your cost. And I think everything else would look pretty safe in there. They can discriminate on age. And I have to say, I haven't looked at the age profiles of over 80s to know whether they put the price up. I wouldn't be surprised if they did. You could look at a pay as you go insurance policy. Two thousand miles is on the cusp of whether that can be worthwhile. So you're literally, you just pay, and there are some out there where you just pay based on how much you drive and how far you drive. And that may work out cheaper in your case, but it's a question of doing the calculations. But what I would always do as my start point is go back to where I began. Go on to two or three different comparison sites, put your situation in and see what the cheapest you can find is.
50:26 Martin Lewis? I mean, that's always the start point. I don't know whether you're comparing across the market or just renewing with your existing insurer. It doesn't say. Auto renewal is a money-saving sin. I need to be clear, auto renewal. I'm not saying there won't be circumstances where renewing is good for you, but it's automatically renewing without checking whether you can get a deal cheaper elsewhere. And I suppose I'm going to just fill this in and go a bit of a riff on this because I've talked to, I've actually done it in a mastermind question before. One of the confusions is, a few years ago, we got these new rules that came into place in insurance, which said, effectively, they were, they were sold as, existing customers mustn't pay more than new customers. The loyalty penalty has gone. Price walking has ended.
51:10 Martin Lewis? Now, what price walking is, is what it meant is, before this rule came in, it meant each year, you would go sign up to insurance company and each year it would walk the price up slightly. So just imagine, I've got my fingers walking on my arm now, and it's on an incline, and it's going up slightly each year, twenty pounds, thirty pounds, fifty pounds, sixty pounds, seventy pounds. So that by you've been with the same insurer for five years, you're probably paying fifty percent more than the new customer. Now, the laws came in to end that penalty, and many people now think, ah, I can't be charged more as an existing customer than I can as a new customer. Ah, ah, to use the mastermind nomenclature. That's wrong because the rules are channel-specific.
51:52 Martin Lewis? So let's say you go through the Megan Car Insurance Comparison Site, and that's where you originally got your car insurance. Or you went direct. Either way, the rules say that as an existing customer, you can't be charged more if you went from the Megan Car Insurance Comparison Site than a new customer going through the Megan Car Insurance Comparison Site for the same firm. Or if you got it direct, you can't be charged more than somebody who went direct. What that doesn't mean is you can't be charged more than somebody on a different comparison site if you went for the Megan Comparison Site. And as I talked about earlier, there's a marketplace. Different insurers have different prices. So they can actually work it in a way that by having various prices across different
52:36 Martin Lewis? places, they can put prices up for existing customers. Which is why I still get messages from people today who told me, you know, "I've just got my car insurance renewal. I've been onto a comparison site and found that my same insurer is 300 quid cheaper via the comparison site. I thought that was banned." Now, my question would be, did you go through that same comparison site when you originally signed up? The answer is invariably no. So it isn't banned. It is legit. It is legal. These things still happen. You still have to be on the ball. You still have to be checking across the market.
53:08 Martin Lewis? Now, I'd like to get back to our tellers. I genuinely found it fascinating this week, and I learnt so much from your experiences. The tellers is, what has your job taught you about money? What work do you or did you do? And what lesson did it teach you about your own personal finances? We've already had some fascinating ones on this. I've got the Facebook ones. Megan's got the X ones that came in. "Emma, I'm a former VAT inspector for Her Majesty's Customers and Exis. I met so many business owners that had little knowledge of some key financial areas, couldn't interpret annual accounts, little knowledge about pensions, paying tax and national insurance, some even didn't know how compound interest works. Rapid growth always left these people in a mess.
53:53 Martin Lewis? They outgrew their records, lost control of cash flow, and when their staff or accountant lawyer made glaring mistakes, they were the last to know. We know it's dull, but so is mowing the lawn or brushing your teeth. Learn the basics, watch the budget, and stay solvent."
54:09 Martin Lewis? Thanks Emma.
54:09 Speaker 01 Bola on X says, "Working in social care, I now manage my finances the same way I do an in-trust account. Always get receipts, audit monthly, annual review of finances, three quotes for all work required at home, apply spending limit, anything above the limit is need versus want, and budget accordingly."
54:30 Martin Lewis? Well, that's fascinating. So what he's saying is, when somebody else manages our money, to make sure they're doing it properly and fairly, there are principles put in place of the way that you should operate. And he's putting those principles in place to protect himself from himself. I think that's fascinating. I actually think it's really good advice. I've not heard something like that before. Let me do Simon. "I started out as a driving instructor nearly 20 years ago after about 15 years in paid employment. Being self-employed has taught me to plan. I don't know for certain how much money is coming in next week. There could be cancellations, there could be new students. I just have to know that bills are covered, then the rest can go to savings. It's taught me to take my music more seriously and treat it as a business, as I have two income streams to cover for one another."
55:15 Martin Lewis? Ah, so he does music as well as driving instructor. Well, look, always really important, anyone who's self-employed, and when you first start, remember, for every £100 you paid, on average about 25 quid of it, isn't your money. You didn't earn it, it goes to tax. If you're employed, it would have automatically gone to tax. So you have to impose that same fiscal discipline on yourself that an employee would. I would always, for every £100 paid, I would always siphon off £25 into your tax account. If you siphoned off too much at the end of the year, hurrah, bingo, bonza, you've got extra money. But far better that than not putting the money aside and not being able to pay it. You know all those stories of young celebrities and pop stars who go bust? It's almost always because they just didn't realise that their income stream might dry
55:59 Martin Lewis? up, and they'd never bother to separate the money out for tax.
56:03 Speaker 01 Well, this one relates to that. Joe on Twitter says, "I'm an accountant and I learned, people who have money don't show it. Those who look rich often are in eye-watering debt. Don't be so eager to keep up. Oh," she adds, "I have budgets for everything too."
56:17 Martin Lewis? Quite right. Alison Spence, "I work in adult social care. People tend to think power of attorney is only required for finance. The health and welfare one is equally, if not more, important." Well, you'll know I'm a huge fan of power of attorney, but I do tend to focus on the financial one for obvious reasons, it's my job. I mention the health and welfare one. Maybe... Maybe we need someone in that sector who comes out and vocalises the importance of power of attorney. You're just putting it in my head, Alison. I've got a power of attorney, I'm going to be doing it for my TV show. And I'm just going to, do you know what? Let's do it as I'm here. I'm going to send myself a note to get someone to do one minute on health and welfare. One minute health and welfare, power, power of attorney, because it's outside my area, but I should do it in show.
57:02 Martin Lewis? So there you go. Maybe we've helped people get it because I might try and get that message across. What have you got next? Let's do a couple more. I love these.
57:09 Speaker 01 So Liz on X says, work in banking, use credit cards over debit for major purchases for S75 protections. Never give away your security credentials in full because the bank will never ask for these.
57:22 Martin Lewis? Quite right. Too many scams out there. Seamus on Facebook, in construction for 40 years, I'd watched fellow workers spend pounds for food on lunch, but I'd make my own. Also, they'd be gambling in the breaks. Lads would lose all their wages in one hand.
57:35 Speaker 01 Oh, gosh.
57:36 Martin Lewis? Well, hopefully Seamus is out there and just been giving them a little bit of, you know, calm down. It's not all there. I'd like to go on, two more. I'm enjoying it.
57:43 Speaker 01 All right. Victoria says, she learnt that your health is what's important. She's a nurse. So always have money put aside for emergencies. Practically speaking, two to three months' salary is a good idea. Ooh, that seems quite a lot to me.
57:55 Martin Lewis? What, two to three months' salary for emergency?
57:57 Speaker 01 Yeah.
57:58 Martin Lewis? No, it's absolute, I say three to six months.
57:59 Speaker 01 Wow.
58:00 Martin Lewis? Three to six months of money put aside if you possibly can in liquid savings for an emergency, always, so that you can get yourself over the humps. And to finish, Stephanie on Facebook, my first job was in a bank. I saw staff tasked with chasing overdrawn customers and advising them what they could and couldn't spend their money on whilst owing the bank money, and charging them for every bounced cheque or direct debit. I resolved to never go overdrawn. And I'll tell you what's interesting, I read some other messages from people who worked in banks, and they were told they were not allowed to be overdrawn as bank staff. I thought it was fascinating that banks told their own staff, you can't be overdrawn. And yet still, and certainly if this was 10, 15 years ago, still let many, many customers
58:44 Martin Lewis? go overdrawn and charge them bank charges for doing so, and structured an entire system to trap people into the scheme of bank charges, but clearly knew it wasn't so good because they wouldn't let their staff do it. Anyway, I just want to say thank you to everybody who got in touch from all different walks of life on that one. I found it absolutely fascinating. Thank you so much.
59:05 Martin Lewis? Okay, you lucky, lucky podcast listeners. It's that time in the show where I give extra tips just for you. I should go, go, how exciting. I've got a couple of them for you. First of all, do you own an electric vehicle, an EV? If so, there is a trick to save you some money on tax. Electric vehicle owners are exempt from paying car tax until April 2025. But after that point, you're going to pay. And for most, it will be £195 a year. However, while EVs are currently still exempt, you can renew your electric vehicle for another year. And you can do this even if your renewal isn't due. So let's say you renewed six months ago.
59:48 Martin Lewis? Well, from now onwards up to April, just renew again for another year. And that will give you another year, taking you past April 2025, where you're not paying any tax on it. Because if you renew until the date they start charging, that will last a year. So don't feel you have to wait. I mean, the best thing to do would get it in your diary and probably do it early March just to be safe so that you know you've done it and then you're all sorted. But I wanted to give you advance warning. So have a go and renew your EV now and you'll delay having the start of electric vehicle taxes. Now, my second tip, while it's more an information piece, is for Sky TV customers. It's just announced there's a 6.2% price hike coming in April, and that will apply mid-contract. Understandably, many people have been saying, hold on,
1:00:33 Martin Lewis? you said inflation-linked mid-contract price hikes and mid-contract price hikes were banned unless they told you upfront in pounds and pence what they're going to be for new customers. So does that apply to Sky? The answer is no and yes, but even the yes is likely a no. And I want to try and explain it to you. So the rules about new contracts and mid-contract price hikes were explicitly for broadband, landline and mobile services.
1:01:05 Martin Lewis? Online streaming services were specifically excluded, so that's Netflix, Amazon Prime and Disney Plus, but Sky Stream and Sky Glass work through the internet, so they're counted as content services, so they're excluded. The grey area is satellite paid for TV, which isn't explicitly mentioned either way. Ofcom thinks it should be included and therefore the ban on inflation-linked mid-contract price hikes should work there, which means that Sky should be telling you the pound and pence figure when you sign up for a new contract of how much it will rise in April. However, there is a legal spat currently about Sky Q customers.
1:01:49 Martin Lewis? Because Sky's satellite television services don't just provide content, they also involve the transmission of satellite signals. As a result, Sky argues they are not regulated by Ofcom as telecoms. Ofcom disagrees. There's a legal dispute which arose when Ofcom tried to enforce its requirement for providers to send end-of-contract notifications and Sky refused. In a judgment in November 2023, the Competition Appeal Tribunal sided with Ofcom. Since then, there've been other hearings which Sky also lost, most recently in December 2024, but Sky is still looking to appeal, so it remains an open question.
1:02:29 Martin Lewis? So for now, at least, even if you're a Sky Satellite TV customer, I'm afraid it doesn't currently look like the inflation-linked mid-contract price hike ban applies to you. But watch this space. And that is it for this week. I hope you've enjoyed it. If you have, do tell your friends that you've been listening to the Martin Lewis podcast and tell them why don't you have a listen too? If you've not enjoyed it, see you next week.
1:03:06 Speaker 01 Martin Lewis is the founder of MoneySavingExpert.com, but other consumer and price comparison websites are available. You can get in touch with Martin's podcast team by emailing [email protected] . The offers and rates mentioned in the podcast are correct at the time of recording. However, if you're listening on demand, it's worth double checking as the details can date.
1:03:44 Speaker 01 BBC Sounds, music, radio, podcasts.
1:03:51 Speaker 04 The real-life dramas of one of Italy's most prominent dynasties, Fiat's Agnelli family.
1:03:58 Speaker 02 Fiat was so important in Italy's economy.
1:04:01 Speaker 03 Italy was Fiat, and Fiat was Italy.
1:04:04 Speaker 04 Inheritance Fiat from the BBC World Service.
1:04:08 Speaker 03 It's about money.
1:04:10 Speaker 02 Power, the succession story.
1:04:12 Speaker 04 Listen on BBC.com, the BBC app, or wherever you get your BBC podcasts.
Previous Holiday hacks: cheapest way to spend abroad, car hire, insurance, 18 days off for 9 days leave, passports, GHIC… Next Pensions Special: Double your investment, how to start one, are workplace pensions good, consolidation & more Page updated November 4, 2026 · transcript and summary are machine-generated