Millions can now reclaim student loans! | Savings safety limit to rise | Will energy prices go up?

Martin goes through the four different reasons why many university leavers in their 20s, 30s and 40s may be able to get £100s or even £1000s of student loan money back. Plus, what’s likely to happen when the new energy price cap is announced this Friday, Martin goes over the now bigger protection for people’s savings, you tell us the cheapest item you’ve ever taken back to a store to complain about, and Martin’s Money Mastermind is all about retail gift aid. 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 song, what he does in his spare time, or have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

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

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• 0:40Martin Lewis?

  This is something that you should only be considering if you're in the midst of repaying student loans.

• 0:45Speaker 02

  Gavlov!

• 0:45Martin Lewis?

  Gavlov!

• 0:46Speaker 02

  Yeah, but Gavlov, what I don't know, right?

• 0:48Martin Lewis?

  It's very likely you will save substantially by getting a fix.

• 0:51Speaker 02

  Do you need to pay a student loan to go abroad?

• 0:53Martin Lewis?

  Yes. Then expect for them to prosecute you over it.

• 0:56Speaker 02

  I should just stop accents, I don't know, I think.

• 0:58Martin Lewis?

  Well, let's be really blunt about this. You see why I say it's a philosophical conundrum?

• 1:02Speaker 02

  I do.

• 1:02Martin Lewis?

  Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Usually, much of it comes from our BBC Radio 5 Live show with Adrian Charles, but there's also bonus money-saving tips just for you, lucky, lucky podcast listeners. In today's pod, up to 5 million people have overpaid their student loans, hitting those who went to university who are now in their twenties, thirties and forties mainly. I'll talk you through the four reasons why, and how to get hundreds or possibly thousands of pounds back. The savings safety protection limit is to be increased from £85,000 to £120,000. I'll talk you through all you need to know on that.

• 1:44Martin Lewis?

  The new energy price cap will be announced this coming Friday, so I will be doing my mystic mag to predict what it'll be and talk you through what you need to do. This week's tellers is what's the cheapest thing you've ever returned to a shop? There are some very funny ones, including the handle broke on my 25p bag for life. I do. And this week's mastermind is all about charity shops, mate. Play the theme tune!

• 2:27Speaker 03

  So we'll start with the savings limit, it's going up, what's that mean in practice?

• 2:30Martin Lewis?

  Right, so on the 1st of December, the safe savings limit that we often talk about this £85,000 that you're protected per institution that you put your money in is going to increase to £120,000. It's been the first increase in a long time, it's not been going up with inflation. At the same time, the lifetime events limit, which is one most people don't know about, but this is if you were to have an inheritance or sell your house, you're actually currently protected up to a million pounds in any one institution for six months. So it's a sort of a temporary balances limit, that's going to go up to 1.4 million pounds. So what's it mean in practice? Well, for many people, nothing because they don't have that amount of savings. But for those people who do have the savings, whether temporarily or permanently, I always talk about, you know, the best way to mitigate risk is not

• 3:15Martin Lewis?

  to have more than £85,000 in any one individual institution. Well, from the 1st of December, that rule will be not to have more than £120,000 in any one individual institution. Because if in the unlikely event your bank were to go bust, you would get back at least £120,000. In practice, when we did see banks going bust in 2007 during the financial crash, what happened in virtually every case was they actually ported the book of savings from the bank that was going bust and they, to a new bank. So they didn't really pay it out in those circumstances, that you just kept your savings account and things carried on as normal. But this is just sort of the backstop protection, the government guarantee, if you like, is moving up from £85,000 to £120,000.

• 3:58Speaker 03

  Okay, and we've got a question from Rose Wetherell on this. Does the safe savings limit only cover one account per person?

• 4:06Martin Lewis?

  It's not about accounts. The £85,000, soon to be £120,000, is per person.

• 4:14Martin Lewis?

  Per financial institution. Now, the phraseology financial institution is important because some financial institutions are the same. So Marcus and Saga have the same underlying protection, for example, or, you know, that some of the big banks are joint banks. So you always need to check who your saving safety protection is shared with. But in general, the way to think of it is 85,000 per person, per financial institution. Now, that does interestingly mean going up to 120,000. If you have a joint account, so let's say right now you have 160,000 in a joint account, that's demarked to be half each. So you each have 80,000 pounds in that account. So you would be under the current safe savings limit. So it's not about, it's not about accounts.

• 4:58Martin Lewis?

  I just use the phrase accounts, I shouldn't. It's about institutions. Just to be really clear, let's do a simple example. You've got money in Lloyds, you've got money in their cash ISA, you've got an easy access savings account with them, you've got a fixed rate bond with them. They're all different accounts, but you would total all those together because it's your protection within Lloyds that is what counts as a limit.

• 5:21Speaker 03

  Let's go on to the energy price cap announcement for January. It's on Friday. Let's go back to the basics. This is where you call it the pants cap.

• 5:30Martin Lewis?

  I do call it the pants cap. So the energy price cap, two thirds of homes are on it. And this is what dictates the price that you will pay. It's set by the regulator OFGEM. It moves every three months and it's a cap on the standing charge and unit rate you'll pay. And we'll hear the new one for January will be announced on Friday. Now, what I do is I look at the predictions from the various different analysts that are out there and some of them update weekly, some of them update monthly, and I average them together. Based on the average prediction of British Gas, Eon and EDF at the moment, they are saying that on Friday, we're going to hear the energy price cap is coming down half a percent. Not very much. It's basically no change.

• 6:11Martin Lewis?

  Now, if you look at the range of predictions, just to be accurate, they range from literally one is predicting no change to Cornwall Insight, who's saying it will go down one and a quarter percent. Now, you might say, why aren't they more accurate now? The assessment period, because it's assessed on wholesale rates over three months, that assessment period is finished.

• 6:28Speaker 03

  So they're working on the same data.

• 6:29Martin Lewis?

  They're working on the same data. Why? Because. Well, let's be really blunt about this. Forty percent of the energy price is made up from wholesale rates. Some of the rest is retailers' profits and network costs, and a lot of it is policy. So, policy and taxes, if you like. So, policy coming from off-gen, policy coming from the government. That is a lot of what is on our energy bill. People will know, you know, whether it's the green levy, whether it's the warm home discount. So, some of the change, we saw last time, actually on wholesale rates, we wouldn't have seen a change. But because of changes to network costs, the moving electricity around, it went up by 2%. So, that's why, that's where the variance comes from, is what their assumption of what off-gen will do is. But, I mean, the big picture, in reality, is not going to change very much.

• 7:14Martin Lewis?

  It's going to stick roughly where it is. What's really interesting, though, is if we then look at the April predictions. Now, the predictions for the next price cap coming in April, again, were very early in terms of wholesale rates because it's only, that assessment period is only a couple of days into the three-month period. But there's big assumptions that coming next April, there are going to be quite big increases to those policy costs. So, the average prediction for April is up 5%, and then down in July. If you want this in numbers, I'm going to use the typical use number that I hate, but it just is a way to illustrate the scales of magnitude we're talking. So, for someone who is currently paying £1,755 a year, the average prediction is from the 1st of January, you'll be paying £1,748 a year.

• 7:59Martin Lewis?

  But none of these are actually per year. And then, from the 1st of April, it'll be £1,833 a year, and then it'll go down to £1,814 a year. So, basically, April and July are predicted to be substantially above where they are now. And the reason I say it's not a year is those are the, that's what you would pay if you were paying over a year, but these things only last three months. So, if we actually look at the maths of if it is half a percent on the typical use figure, that's £7 a year cheaper, but this is only for a quarter of the year, though it's a heavy use quarter of a year. So, this may be effectively a £2 or £3 reduction in your bills over that three months, which is why I'm effectively saying it's no change. The big message from that, though, is prices are not dropping if you stay on the price cap,

• 8:43Martin Lewis?

  and the cheapest fix is 10% cheaper than the price cap right now. So, if those predictions are right, it is an absolute no-brainer to get yourself onto a fixed tariff, and the price cap is still. A pants cap.

• 8:55Speaker 03

  Okay, got it. So Andy wants to know, is it worth fixing, especially for April when it shoots up, as you've, as you've just said. But presumably the fix reflects, whoever's setting the fixes is also aware that they're likely to go up in April.

• 9:12Martin Lewis?

  No, that, that, and that is a very common misunderstanding of the situation. So I'm quite glad you did it, Rob. I'm not having a go.

• 9:19Speaker 03

  No, please do. That's what I'm here for.

• 9:22Martin Lewis?

  We have to, we have to look at this. The price cap is set based on a time lag. So the wholesale rates that matter for the current price cap is September, October and November's prices effectively, roughly. It's the whole, the average of the prices over September, October and November. That is what will dictate what is going to happen on the first of January. What happens on the first of April is dictated by December, January and February's prices. So that time lag is very important. The rate at which fixes are set generally changed by the week based on the wholesale price at that moment. So I do not

• 10:04Martin Lewis?

  know what fixes will be in April. I can only tell you what fixes are now. And so what you tend to have is you, you tend to have a real disparity between the price cap and if you have a moment where the wholesale rate's gone down, fixes can be offered more cheaply, but the price cap could still be rising because it's gone down from when it was higher in the past. So the two are completely delinked. So you asked me, the, the questioner is asking, is it worth fixing now thinking about April? Well, it's worth fixing now thinking about now. In fact, the reason this is really interesting, of course, I need to say these are only predictions. We don't know what off jam is going to do on Friday, but it's going to be something close to this. I mean, I would, I would be gobsmacked if it wasn't between no change and down 2%. I'd be really gobsmacked. It could happen,

• 10:48Martin Lewis?

  but I'd be really gobsmacked. So let's just look at what we know. We know the price will stay as it is until the end of this year. So that's about, what, five weeks? We know that the price is going to stay roughly what it is until the end of March. So that's Four and a half months and the highest used period of the year, which is really important. We then think that unless something changes, and there could be a budget change, I'll talk about that in a moment. But unless something changes, it's going to go up in April and up in July. So we have a pretty good idea, even if I don't forget it's going up, we have a pretty good idea. Prices are staying where they are right now for the next nine months, including the high use period, which is over winter.

• 11:29Martin Lewis?

  And the cheapest fixes are 10% cheaper than the price cap and you can lock in and get that guaranteed rate. So on the very strong basis of probability, there are no guarantees because there is some crystal ball gazing. Fixing now is going to save you immediately. It's almost certainly going to save you until the end of March, but we'll know that for sure on Friday. So you might want to wait a few days. And it's very likely going to save you through April and through the July price cap. And then the next October, it starts to get a little bit crystal ball gazy, but that's only a couple of months left. So it's an absolute no brainer to fix. There are some other options. There's some other clever tariffs out there for people on EVs or people who want time of use tariffs. But the sort of simple solution is is to fix. If I mention the budget, because there's a lot of talk in the budget about the Chancellor.

• 12:11Martin Lewis?

  Well, the talk is about the Chancellor cutting VAT. I don't think that's what they're going to do. I think they are going to reduce energy bills. I think they will either do it via the standing rate or maybe cutting some of the renewable stuff that's on there. I think it'll be done by a different mechanism than VAT. And in fact, what I have said is if they do do those things, they must make sure it applies to all tariffs, not just the price cap. It should apply to fixes as well.

• 12:38Speaker 03

  Okay. Jen says my price fixed tariff ends in early Jan. Would you stick or shift before Friday? Your ideas like to get better nearer the time. Current quotes are between 15 and 25% more than I am paying.

• 12:49Martin Lewis?

  The most important thing you need to remember is you can't be charged exit penalties on a fix in the last 49 days. So work out when is 49 days from the end of your fix period and from that moment, you're free to do a comparison. If you do a comparison. And it is cheaper than your current tariff, which you're indicating to me it isn't. Then you may as well shift straight away because you may as well pay less straight away. If you're going to have to pay 20% more to fix, and we're talking over the high use period. And again, you'd pay 30% more in that case if you went on the price cap. So, you know, a fix is still cheaper than what you could get, even though it's more expensive than you've got right now. Then I think the risk of fixes going up very substantially by the end of July is relatively slim. I would probably stick with the devil that you know and stay on the cheapest price as long as you can.

• 13:32Martin Lewis?

  And only move to your new fix a couple of days before the existing fix ends because it'll take, it only takes five or six days to switch over.

• 13:40Speaker 03

  Brent from Sheffield asked the question I'd ask if I was sitting at home. Does anyone else get the feeling that this whole energy pricing system has been made far too complex by people on purpose? There's simply no need for this level of complexity or bills which you need a degree to read.

• 13:55Martin Lewis?

  I mean, I hope you don't need a degree to read bills. And look, the honest answer is you get yourself on a comparison site and a good comparison site will tell you what's likely to come and how much you can save. And that's the simple thing. Maybe it's my fault because I'd like to make sure people really understand what's happening. I could, I could, I mean, if we start this again, Martin, what's happening with energy prices? Oh, energy prices are going to say about the same, but you can save 10% by getting a fixed tariff that keeps your price still for the next year. And that looks like it's going to save you money. I mean, I could have just done that. And to be honest, that's what you tend to get in most other places. But I, my whole thing is I want to educate you of, understand why I'm saying what I'm saying. Now, the price cap, I mean, I was not in favor of the price cap when it came in. And I was very much not in favor of them doing a three monthly move system. They used to be six monthly so that we have to have this every three months.

• 14:39Martin Lewis?

  I mean, there is one advantage that it becomes a clarion call when prices are moving that people check and switch and change. The system, I mean, the whole standing charge unit rate interaction, yes. I mean, many companies would like us to get rid of the standing charge. That's regulator enforced on the price cap. Because ultimately, if we could just say, here's the unit rate. Here is what you pay for each unit of gas and electricity you use. Well, that would actually be quite simple. You wouldn't have to start doing comparisons and things like that. Although we're moving to time of use tariffs. So I don't think, I genuinely don't think it's deliberately to confuse people. I think there's a There's a policy element to try and make it fairer, but that adds a level of complexity. And the big problem is that the price cap moves, right? So you don't have consistency.

• 15:22Martin Lewis?

  So what we can't do, which we is say, here's what you're going to pay for the next year. Compare it to a different deal because nobody knows what you're going to pay for the next year. Because the price cap moves every three months and that frequency of moving is what adds to the complexity of the system.

• 15:37Martin Lewis?

  Well, that was fun.

• 15:37Speaker 03

  It was fun. Do you want to move on to student loans?

• 15:40Martin Lewis?

  Yes.

• 15:40Speaker 03

  So 1.1 million people overpaid on their student loans in the 2425 tax year. You've had loads of questions in about this. Darren Rhodes, how do you know you've overpaid and when can you claim?

• 15:57Martin Lewis?

  So let's just go back to basics. So this is for people who have left university and started repaying their student loan. You're generally going to be in your twenties, thirties and forties, but you could be older if you're a mature student. The new stats, and I've done this before, so lots of successes, I suspect, will come in because I do this. This is an annual piece of housekeeping for me that I do for people. And our 1.1 million people, but they're from information requests that we've put in in past years on the student loan company. There were at least four million people overpaid before that, and there is no deadline to back claiming. Now, there are four different reasons you may have overpaid. I'm going to talk you through each one in turn, but by far the biggest is reason one,

• 16:37Martin Lewis?

  which just in 2425 alone was 1,070,000 people overpaid due to reason one. So I'm going to take this slow because this is, this is the one that counts. So this is it, Adrian. Let me do the concept first before I do the detail. You only have to repay your student loan if you earn over the annual threshold within the tax year. So there is an annual threshold, but your student loan payments are taken through PAYE based on what you earn each month. So if you have uncertain income, the best example, and I'll go through it in more detail in a minute, but just so people get the concept.

• 17:19Martin Lewis?

  Let's say you weren't working for three months of the year. And then you've got a job for the remaining nine months of the year, which prorata was above the annual threshold. You would be earning enough each month to repay your student loan, but your total earnings in the tax year would not be over the annual threshold. So you should not have repaid the student loan. And that is the biggest reason. Now, the complexity is your annual threshold depends on which plan of student loan you are on. There are five plans. I won't talk about the fifth one because that's only for current students. And everybody on plan five is not yet repaying. So it's not relevant for this case.

• 18:03Martin Lewis?

  This is going to be a bit boring, but it's so important I need to do it. So you need to listen to which plan you are on. And then I'm going to talk to them in the now I'm going to call them plan one, plan two, plan three, plan four after that. Plan one is for people who went to university and started between 1998 and 2011 and are from, not where you studied, are from England and Wales. It is for Northern Irish post graduates from 1998 onwards as well. And the plan one threshold is you pay on earnings above £26,065 a year. Plan two, this is the big one. So I'm going to use this as my example throughout. This is the one that most people are on.

• 18:45Martin Lewis?

  It's for those who started in England, from England between 2012 and 2022. And all Welsh starters from 2012 onwards. You repay 9% of everything you earn above £28,470 a year. Plan three is England and Welsh post graduates. You repay above £21,000. And plan four is everybody from Scotland who has started university anywhere in the UK from 1998 onwards. And you repay above £32,745. You with me? So let me do an example now based on plan two.

• 19:28Martin Lewis?

  You don't work for three months of the year. You then get a job that pays you for ease of mass thirty six thousand pounds. So you earn three thousand pounds a month for the remaining years. Three thousand pounds is about, the monthly threshold is two thousand three hundred and seventy two quid. So it's about six hundred quid above the monthly threshold. So you pay nine percent of six hundred pounds, you're paying about fifty five quid a month. You get to the end of the year, because you only work for nine months, you earn twenty seven thousand pounds. The annual threshold is twenty eight thousand four hundred and seventy pounds. You earn less than the annual threshold, you should not have repaid your student loan.

• 20:11Martin Lewis?

  But taken from your payroll was five hundred and eight pounds of student loan repayments. You are entitled to the entire five hundred and eight pounds back. Make sense?

• 20:19Speaker 03

  Yes.

• 20:20Martin Lewis?

  The way that you get that money back, so who's it coming for? Anyone who's got, who only worked part year, it's coming for anyone on commission or with variable income, who had some big months, some small months and didn't earn over the annual amount. This is the easy one to get back. You either go through the app of the student loans company, or you use student loans company refund request form at gov.uk. And you can do this for every year except the current tax year. Because that's not finished yet, you can do it for every prior tax year.

• 20:48Speaker 03

  What is the do nothing option on this and the other ones? Would you ever see the money again?

• 20:53Martin Lewis?

  What's that?

• 20:54Speaker 03

  If you just didn't do anything, would they sort it out in the end?

• 20:57Martin Lewis?

  No, no.

• 20:58Speaker 03

  Incredible.

• 20:59Martin Lewis?

  Well, no, well, it isn't, and I was going to come to this later.

• 21:02Speaker 03

  Right, fine, okay.

• 21:03Martin Lewis?

  But let's do it now, because it makes sense. So this applies to all the other reasons I'm going to do, which is why I was going to do it later. The issue here is you have overpaid your student loan. Now, if we were talking about a normal loan, I would of course be encouraging you to overpay, because the quicker you repay a normal loan, the less amount of interest you repay in total, the less your total cost. The same is not always true on student loans, but it is sometimes true on student loans. So, on plan two, that's the big one. Remember, England, England starters between twenty twelve and twenty twenty two.

• 21:45Martin Lewis?

  Only one in three are predicted to pay their loan in full before it wipes after thirty years, due to the size of the loan and the fact that they have above inflation interest. So if you've overpaid by a thousand pounds, right, and you take that thousand pounds back now, if you were in that two thirds, you won't repay them full in the thirty years, the fact you've taken a thousand pounds back does not reduce what you will repay in future. You'll still repay the same in future, so it's better in your pocket. If however, you were a high earner, or you're on one of the other plans where more people are likely to repay in full because the interest rate is lower and the original borrowing is lower because tuition fees in Scotland, you don't repay them, you're only paying the maintenance loan, then the overpayments can be good because they reduce your interest.

• 22:29Martin Lewis?

  So that's why it's not an automatic default payback, although I would still say for all the other plans except Plan Two, the interest rate is set at the rate of inflation, which is currently for this year, three point two percent. That is cheaper than most commercial debt out there. It's certainly cheaper than most mortgages and it's got far better terms. So even in those circumstances, even if I was likely to clear the loan in full over that time period, I would probably take my money out now if I had other debts to reduce my other debts because they're priority over the student loan. So that's the reason why.

• 23:03Speaker 03

  Okay.

• 23:04Martin Lewis?

  Does that make sense?

• 23:05Speaker 03

  That does make sense. Mind you, I can hear Brent from Sheffield now saying, does this have to be so complicated? Just like he said about bills, but, but look.

• 23:13Martin Lewis?

  This is definitely way too complicated, something I've campaigned on for years, but this is how it works.

• 23:18Speaker 03

  Okay, we've had some successful claimants. If you like Stephen Major did it on a whim, they're refunding two hundred and fifty pounds. Joel did it very early on, requested it through Twitter, they told me how much I was owed, just four hundred pounds or so, and it sent to me a week later, very easy. I think it's because I work part time and got some bonuses some years, which put me into the bracket that month. Teza, retired halfway through the tax year and my total yearly income didn't meet my payment threshold, went online, claimed back by payments in my bank account with, within days.

• 23:47Martin Lewis?

  I've had masses of successes on this over the years, honestly. I mean, some have been in the thousands, I think three thousand is my biggest. So I mean, this can be really substantial money for some.

• 23:55Speaker 03

  And Ethan Baker says, claimed twice, once because I started taking money before the April after my graduation and didn't earn enough anyway. Second time I did earn over the threshold, I worked out I'd been charged thirteen percent, not nine percent. This is where I learned that it's worked out monthly, not annually, so no refund.

• 24:14Martin Lewis?

  Okay, so that last is very interesting. And that catches many people out. You heard my clear rule of reason one. If you earn under the annual threshold but paid disproportionate months, you can reclaim. But that does not work if you earn over the annual threshold. I will give you an example to try and explain what I'm talking about. So let's again go on to plan two, which is £28,470 a year. Imagine someone who earns in a typical month, £2,000. But they get a £5,000 bonus in December.

• 24:55Martin Lewis?

  So that means their total earnings now are £29,000, which is about £500 above the annual threshold. So you would think they repay 9% of £500 quid, which is what about £45. You'd think that would be their total earnings, but no. Because if you earn annual over the annual threshold, then you pay by the month. So if you're earning £2,000 in all the months except for December, you don't pay any student loan repayment in all of those months. But in December, your total earning is £7,000. £7,000 is well above the £2,370 monthly threshold.

• 25:36Martin Lewis?

  So you're going to be repaying on £4,600 worth of income. 9% of £4,600, well, we're getting on for about 400 quid there. So in December, you'll have £400 taken from your from the payroll. And because you're over the annual threshold, even though on the annual basis, you should be paying far less, it still counts as the month and you can't reclaim it. So you will still have to pay based on the monthly amount. Did you understand that?

• 26:06Speaker 03

  Yes.

• 26:07Martin Lewis?

  So by the year, you're only 500 quid above the threshold. It should be 45 quid. But because you've got it all in one month, you're actually going to have to pay 450 quid back. And you can't claim that difference back, which many people find quite unfair and frustrating. But those are the rules.

• 26:22Speaker 03

  This is what Tommy said. Here's the issue, Martin. Let's say you work and get paid weekly. One week you earn 2K, they take a chunk. The rest of the year, you earn nothing. You can't get that chunk back until around August the following year. One time I earned less than minimum wage, but paid one and a half thousand.

• 26:38Martin Lewis?

  That is an unfairness in the system, yes. As I said earlier, you cannot claim back the current year until the current tax year is over because they don't know your total earnings in the current year and that is the way that it works. And I can absolutely understand your frustration. Unfortunately, I don't have a way to fix it. Shall I move on to my next reason?

• 26:54Speaker 03

  Yeah.

• 26:55Martin Lewis?

  Let's go on to, and I'm going to do these ones quicker because there are far fewer people. The first one is that you're on the wrong student loan repayment plan. If your employer doesn't know which plan you're on, it must assume you're on plan one, which is where you repay above twenty six thousand and sixty five pounds a year. But the enormous number of people are on plan two or plan four, where the threshold is higher, so you shouldn't be repaying as much. If that happens to you, then you're going to have to call student loan company for a refund, but also talk to your firm's payroll and say, no, I'm not on plan one, I'm a plan two, and you should be taking it above.

• 27:29Speaker 03

  These are the things you wear finding out which plan you're on.

• 27:31Martin Lewis?

  They are absolutely strict. You know, if you were in, you started university and you're from England between twenty twelve and twenty twenty two, or Wales from twenty twelve onwards, you're on plan two. In Scotland, if you have been to, if you're from Scotland, you went to university, at any time, it's the year you started from nineteen ninety eight onwards, you're on plan four. Let me go to reason number three.

• 27:52Speaker 03

  I've got a question from Nicola Cassell. Graduated in ninety eight, started voluntarily paying back student loan two months later when started new employment. Is the reclaim, is the reclaim scenario applicable for me?

• 28:06Martin Lewis?

  That was the, my warning for a key word, voluntarily. If you choose to overpay your student loan, you cannot change your mind. Once you do it, it's a done deal. It's one of the reasons I always tell people to be very cautious about overpaying their student loan, because if something changes later when you wouldn't be repaying, you can't get it back. These are about non-deliberate overpayments.

• 28:29Speaker 03

  Well, it's counterintuitive, that, isn't it? When you think you're doing the right thing, the prudent thing, but anyway.

• 28:34Martin Lewis?

  I've spent ten years trying to communicate the dangers of it to people because, well, it seems like exactly the sensible thing. You know, you have to change your brain to understand how student loans work in a practical financial way.

• 28:43Speaker 03

  Okay, reason three.

• 28:45Martin Lewis?

  You started repaying the loan too early, dead simple, thirty six, thirty seven thousand people in the tax year twenty four, twenty five. So here's the rule. When you leave university, whether you graduate or you leave university, because some don't complete their courses, you do not have to start repaying your student loan until the April after leaving the course, until the start of the next tax year. So let's put this really plainly. If you do traditional graduation in July, you will not start repaying until the following April, nine months later. But if your employer has the wrong info about when you graduated, they can start taking payments too early. Again, to reclaim, call the student loan company on this one. The only one that you can do it easily for is the first one, where you can just simply go on to the app

• 29:30Martin Lewis?

  and sort it through. Call the student loans company. But it's quite common that people start repaying too soon, and you don't need to repay.

• 29:36Speaker 03

  Okay, Sessi said, I've just done one, but feel like they've only refunded my overpayment for the last year, not previous years. Can I go back and ask them to check?

• 29:45Martin Lewis?

  Absolutely. You have a right to go back as long as you like, or go and do the checks yourself through the app. Make sure that it's right and that you've got the material you're sorted on, and you can ask them to refund previous years too. Absolutely, yes.

• 29:56Speaker 03

  Have we done reason four?

• 29:57Martin Lewis?

  No, I'll do reason four. We'll probably get most complaints about this one, because this is one people realise is happening. This is when money is deducted after you've fully repaid your loan. Sixty thousand people in twenty four, twenty five. So the loan is wiped after thirty years. I say that slightly because it's not thirty years, it depends on the plan and when you started, and there's even more variance on thirty years. But let's say, after a set period, often thirty years, the loan is wiped, it depends on the plan. But PAYE takes time to catch up because they're not notified by the student loan company. If that happens to you and you keep paying too long, you will, this is the one where you are automatically repaid. So you don't have to reclaim. But a tip for you, if you're in the last couple of years, or it looks like you're in the last couple of years of repaying your

• 30:41Martin Lewis?

  loan, then you can go to the student loan company and you can request the repay by direct debit, rather than through the payroll. And that way, the moment you've repaid, no more money will be taken.

• 30:53Speaker 03

  Okay. Emily Hancock's received a let up earlier this year from the student loans company, telling her that she'd overpaid and received a refund. Does this mean I don't need to check as I've done it already?

• 31:04Martin Lewis?

  I mean, I don't know what the refund is for, I don't know what reason it was for. I would always, because I'm that type of person, do the checks myself as well. But... Possibly, it it will be a spurious waste of your time, but personally, I would prefer to know.

• 31:18Speaker 03

  Okay, Michelle, my son lives in Australia, only works part of the year to fund his travelling the rest of the time. He informs student finance when he moved abroad and tells them each time he works. He doesn't earn anywhere near the British threshold when he works, but each time he works, they send him a letter with an amount to pay every month while he is working. Is this because he's abroad or have they billed him incorrectly?

• 31:40Martin Lewis?

  So, I'm just trying to work through this. If I understand correctly, he's in Australia, he has irregular work.

• 31:48Speaker 03

  Yes.

• 31:49Martin Lewis?

  Now, the first thing, people always say, do you need to pay your student loan if you go abroad? Yes, you have a contractual relationship, you have to pay your student loan, but the thresholds are different. So not just what plan you're on, but which country has a different threshold.

• 32:01Speaker 03

  But how do they know?

• 32:02Martin Lewis?

  So the threshold is based on the cost of living in that country.

• 32:06Speaker 03

  But how do they know that you've been paid in Australia?

• 32:09Martin Lewis?

  Okay, can I come back to that and explain? But I'm happy to answer it, but I think, so in Australia, because it's quite a high cost of living country, the threshold might even be higher in equivalent Australian dollars for earnings than it is here. I I don't know, I would guess it is. If you went to a very poor country where the cost of living is lower, then you actually have to repay on a much lower level of income. That's how it works. But if he has, you saying to me he's got irregular income. So I think he may be a reason one issue because they may, I I'm guessing here, because this is overseas, it gets quite complicated. Because, remember, you have to pay by the month. So they may be trying to take money based on his monthly earnings, just like happens here,

• 32:51Martin Lewis?

  even though he's he's below the annual threshold, so he would have to reclaim it. I would ask them, I would simply say, this doesn't, why are you asking us when we're learning below the annual threshold? And maybe because they have to ask you for the money by the month, which takes us into your question, Adrian. How, the real issue is how do you enforce it? Well, first of all, I mean, the argument is you you. You have a contractual relationship with the UK state to repay this money and therefore you should notify them of their earnings and they set up methods how to pay. But absolutely right, in practical term, there are many people who have studied in this country and go abroad and do not repay their student loans. The real issue is if you come back to the UK. If you come back to the UK and you have not repaid when you were abroad, when you should have repaid abroad, then expect for them to prosecute you over it.

• 33:35Speaker 03

  Okay, but how do they know you've been working? Because there's some reciprocal arrangement.

• 33:39Martin Lewis?

  In some countries, there are reciprocal arrangements. In some countries, they aren't. They try to tighten it up within the European Union. There are a whole variety of different methods out there.

• 33:47Speaker 03

  Okay. It's something I don't understand. The student's loan company as a whole.

• 33:52Martin Lewis?

  Yep.

• 33:53Speaker 03

  What happens at the end of the day when a certain, you know, who knows how much of the loan isn't repaid to them?

• 34:02Martin Lewis?

  Okay. So we're going to get into sort of philosophical terms now. Because what people do is they think of a loan and they think it's a debt and they think therefore if it isn't repaid, it's losing money. Now, the first thing we need to go back to is I would rename this a graduate contribution system. What this system works and the equivalent systems in other countries are called graduate contribution systems. When you go to university, you have to contribute in proportion to your earnings afterwards. Now, the first thing to remember when you start to see the fallacy when we talk about the amount that is repaid is that is purely a function of interest. So let me give you an example. If we have the student loan as it now and every student went to university and the

• 34:44Martin Lewis?

  interest rate was set at zero percent, would more or less people than now repay with a lower interest rate before the loan wiped?

• 34:52Speaker 03

  More.

• 34:53Martin Lewis?

  More, because there's less interest, so they'd repay in full. Now, let's imagine the interest rate was set at a hundred percent a year. I mean, ludicrous. Would more or less people repay?

• 35:03Speaker 03

  Less.

• 35:04Martin Lewis?

  Now.

• 35:05Speaker 03

  Is this the mastermind?

• 35:06Martin Lewis?

  No, no, no, don't worry. You're doing very well. You understand and hopefully people at home understand. Now, let me ask you a question. If we set the interest rate to zero percent, would the state gain more or less money than it does right now?

• 35:17Speaker 03

  Uh, more.

• 35:20Martin Lewis?

  No, less. It's not charging interest.

• 35:22Speaker 03

  Oh, of course, yeah.

• 35:23Martin Lewis?

  And people are repaying more quickly. If we set the interest rate to a hundred percent, would the state gain more or less money than it does right now?

• 35:30Speaker 03

  Well, less, because no.

• 35:31Martin Lewis?

  More, it's charging a hundred percent.

• 35:32Speaker 03

  But nobody's gonna put.

• 35:33Martin Lewis?

  It's charging a hundred percent interest. Basically, it means everyone will repay nine percent of their earnings above the threshold for thirty years. It'll never wipe, or forty years under the new system, it'll never wipe.

• 35:42Speaker 03

  Right.

• 35:43Martin Lewis?

  Charge the interest to a hundred percent. So, if we reduce the interest to zero percent, more people would repay in full, but the state would get less money. If we increase the interest to a hundred percent, fewer people would repay in full, but the state would get more money. So this whole concept that there's this link between how much you repay of this nominal amount plus interest that you've borrowed, it isn't, it's a function of interest. Now, we go back to before we had student loans. The state paid the entire amount.

• 36:07Speaker 03

  Yeah.

• 36:07Martin Lewis?

  And nothing was claimed back. The student loan system was brought in so the state could reclaim some of the money from the people who were more financially successful. And over the years, what's happened is they've swung the pendulum more from the state contributing the most and the individual contributing some, to the state contributing fifty fifty, and under the new Plan Five loans, the state's contributing about twenty percent and the individual eighty percent. So, wh- what we're not doing is looking, what is the cost of the lending? We're only looking at what is the nominal interest rate.

• 36:35Speaker 03

  So is the student loan company a company, or a government-run company?

• 36:38Martin Lewis?

  The student loan company is a, is a, is not a company, it's a government-owned institution that manages student loan repayments. Some of the earlier loan books have been sold off to private companies. Did not the collection of it, but the actual underlying debt, under terms of the underlying debt. But I sort of go back again, when people say, all these people not repaying, who's gonna repay? You, you, you, you can't think the concept that this is a real thing. It's just a function, because the government chooses to set the interest rate to the government's interest rate. We could make, more people would repay if you just cut the interest rate, but then the state would get less money.

• 37:10Speaker 03

  There's, there's some good, there's some good.

• 37:11Martin Lewis?

  You see why I say it was a philosophical conundrum?

• 37:13Speaker 03

  I do, yes.

• 37:16Speaker 03

  Tell us, what's the cheapest thing you've ever taken back to a store to complain about? Sophie took a value, a value tin of beans that had been reduced because they were dented, but when I got back in the car and checked my receipt, I'd been charged full price. I went back in and got my refund.

• 37:30Martin Lewis?

  How much?

• 37:30Speaker 03

  13p.

• 37:31Martin Lewis?

  Well done. Lyn, I took a loaf of bread back once because I was, it was completely hollow. Presumably a large bubble formed during cooking. I was a student and every penny counted.

• 37:43Speaker 03

  Brian, a K-Tel record back in 1974 cost 1.99. The outer rim fell off. Ended up going to small claims with the help of a teacher from school as the retailer wouldn't refund. They didn't turn up to court, so I got rewarded, the refund plus cost. And Daniels is my favourite, love this.

• 37:59Martin Lewis?

  Go on.

• 37:59Speaker 03

  When the handle broke on my 25p bag, bag for life. Quite, quite right.

• 38:05Martin Lewis?

  It's nice.

• 38:05Speaker 03

  It was. I mean, they couldn't argue that, could they?

• 38:09Martin Lewis?

  No, no, I think, do the next one, I like that as well, go on.

• 38:11Speaker 03

  Okay. A Matalan carrier bags, as Jan Hooper, still in perfect condition, transported the clothes to my car, took, took bag back into the store.

• 38:21Martin Lewis?

  That's very interesting. Jan, you had no right to do that under the law. Anything you buy in store as opposed to online, unless it's faulty, you have no right of return. Jan, you could have gone back and the store could have legitimately, within its rights, depending on its published returns policy, said, no, Jan, this bag is in perfect condition. This bag is not faulty in any way, you have no right to return it.

• 38:40Speaker 03

  Matalan are coming for you, Jan.

• 38:41Martin Lewis?

  Therefore, Jan, whatever you paid for that carrier bag, you may have held the cost. Jan, you were lucky.

• 38:46Speaker 03

  Yes.

• 38:47Martin Lewis?

  You were lucky.

• 38:47Speaker 03

  Fortune favors the lucky, go on.

• 38:49Martin Lewis?

  Play the theme tune.

• 38:56Martin Lewis?

  Hello, welcome to Martin's Money Mastermind, where I put a three option, multiple choice to Adrian. The current score is Adrian has got 13 right.

• 39:04Speaker 03

  Just another.

• 39:05Martin Lewis?

  And 26 wrong.

• 39:07Speaker 03

  Right.

• 39:07Martin Lewis?

  Which means Adrian, I have a new sting for you. Which means Adrian, here you go.

• 39:16Martin Lewis?

  That's you, Adrian. No better than random chance. That's our new sting whenever you're in this position that you are now no better than random chance. You want to do that, tell us desperately, don't you? Go on.

• 39:26Speaker 03

  Sharon got a packet of crisps which just contained one large potato. I received a letter of apology and a box of 32 packets as a goodwill gesture.

• 39:38Speaker 03

  Brilliant, Sharon.

• 39:39Martin Lewis?

  Lovely. All right, let's get on with the mastermind. All right. So here you go. I'm walking around my house and I see a set of books lying around, mostly in pristine condition as no one has ever bothered to read them. There's one called "The Good Drinker: How I Learned to Love Drinking Less", which is a sobering title. There's one called "We Don't Know What We're Doing", which could have been written about this show. And finally, there's another one by the same author called "The Curious Columns of Adrian Charles", which was disappointing as there was neither a Doric nor an Ionic insight. Anyway, that was a little classical joke there. I was pleased with that one. Anyway, I decided to do some good and donate them to the local lost causes charity shop.

• 40:20Martin Lewis?

  It felt appropriate. The shopkeeper smiled with his crinkly eyes and said, "It's funny, I've never seen a copy of any of those books that hasn't been pristine". Luckily...

• 40:30Speaker 03

  Oh, can you stop, Bla? How much more stick you want to give? Go on, keep going.

• 40:35Martin Lewis?

  Luckily, he accepts them anyway and asks me to sign up at that point to the retail gift aid scheme, which last time we talked about charity you mentioned. So I know you know about it, so I'm giving you a question now.

• 40:47Speaker 03

  Well, I've signed it. I wouldn't say I knew about it.

• 40:49Martin Lewis?

  Now, normal gift aid, as you know, allows a charity to claim back the basic rate tax someone has paid on a donation. But when you're giving a product like books, not cash, what is the claim based on? Is it A) the estimated price you, the donator, paid for the book? B) charities are expected to calculate a fair valuation and claim based on that? Or C) the eventual price the charity sells the book for? So is it the price you paid, the price they estimate they'll get, or the actual price they get only after sale?

• 41:25Speaker 03

  Oh, I think it's got to be after sale, so I'll go C.

• 41:29Martin Lewis?

  Final answer?

• 41:30Speaker 03

  Yep.

• 41:31Martin Lewis?

  Play the hallelujah.

• 41:38Speaker 03

  Does that mean I lose that random chance thing?

• 41:40Martin Lewis?

  You mean you're off random chance until you go back to it? You can now get two wrong before you go back. Okay, so look, this is actually quite important to understand. The retail gift aid only kicks in when the charity actually sells your donated item, which means in the case of these books, there may never be any gift aid on the back of it. Now, in a way, you need to think that the charity is acting as your agent to sell the goods. And then when it does, it can claim gift aid of 25p per pound that you donated. And it will generally notify you at that point, which this is what people have to understand. The reason it will notify you at that point is you can only claim gift aid if you've actually paid that amount of tax. So if it's in future, it could even be in a future tax year, and you hadn't paid tax that year, and someone claims gift aid on your behalf, you would actually have to pay

• 42:25Martin Lewis?

  that extra gift aid in terms of tax, which is why there's sort of a sloth in this system that when you give a product, you might have to wait for notification of what it earned and then recheck that you gave the gift aid and you could then opt out at that point of the gift aid that came through, if that makes sense. But you sparked that question by mentioning it when we talked about it. So I did a little bit of research on it. I thought that was quite interesting. And now the score is 13, 14 right, 26 wrong, Adrian. Wow, well done you.

• 42:53Speaker 03

  I just want to get this one. Helen Meggitt.

• 42:56Martin Lewis?

  You love this teller.

• 42:57Speaker 03

  Took back a giant whoopee cushion. It wouldn't work until I got to the shop, but the woman was using brute force with her hands. I got my five pounds back. So if you sat on it, it wouldn't whoopee. But if the woman used brute force, I like that.

• 43:12Martin Lewis?

  Quite a serious one from Denise Roberts. My hubby bought 200 pounds of clothes a few years back and they offered him a paper carrier bag. On checking the receipt, I saw they charged him 5p. Plastic, single-use bag. We were still in the shopping centre, so I marched back to the shop and demanded either reimbursement of the 5p or I wanted a full return and refund on the clothes. The charge wasn't meant to be applied to paper reusable bags. The manager refused, but sarcastically got me five pence out of her handbag. If you need it that much, she said. So I took the 5p, stuck it in the charity pot, but she lost a repeat customer and the shop eventually closed down.

• 43:46Speaker 03

  Let it go Denise, let it go.

• 43:50Martin Lewis?

  Yes, go back to the whoopee cushion one.

• 43:54Martin Lewis?

  Okay, so that's the main pod done and I'm now with podcast producer Matt. Hello, Matt.

• 43:58Speaker 02

  Hello.

• 43:59Martin Lewis?

  Before, I know you've got energy questions and I think we've managed to get through all the student finance points. There is one final point I would like to make, though. When I'm talking about reclaiming your student loan, I'm talking for people who are still paying their loan off. If you have already paid your loan off in the last couple of months and you realise that you overpaid so you could get some money back, I would think quite carefully about that. Remember, when you reclaim, then the amount that you've overpaid, you get it in your pocket, but it goes back onto your student loan account. Well, clearly, if you have paid off your student loan, you're going to pay that anyway and you're going to pay interest on it and you're then going to have the hassle of suddenly having to reignite your student loan repayments.

• 44:42Martin Lewis?

  So for me, this is something that you should only be considering doing if you're in the midst of repaying student loans, not when you're at the very end of it. And I just wanted to make that clear because I'm not sure I made that completely clear. And again, that, just at that point, it goes back onto your loan account. So if you reclaim, you will see the amount you owe getting bigger. But as I explained with Adrian earlier, there are many people who won't clear what they owe in full before that student loan wipes. And therefore, even though your loan account is getting bigger, because what you repay is based solely on what you earn above the threshold and 9% of that, and then it wipes after a set period, let's say 30 years, although it does depend, you won't repay any more because of the fact that you reclaim some.

• 45:26Martin Lewis?

  Some people will, and in that case, it's a different decision, but that's where we're going. Oh, it's complicated. I'll stop there, Matt. We're moving to a different subject, aren't we?

• 45:34Speaker 02

  Yes. Shall we do a couple more energy questions?

• 45:37Martin Lewis?

  Of course. What have you got for me?

• 45:39Speaker 02

  Get to them all. First one from Farrell. Looks like this could be a decent time to lock into a 12-plus month fix. Am I right?

• 45:46Martin Lewis?

  Well, the plus is always the interesting question. Certainly 12 months or some of them go up to 15 months, that makes sense. What is always more difficult for me to answer, because I'll just reiterate so that you remember, we're expecting to see the energy price cap hardly move when it's announced on Friday for the 1st of January price cap. But then it's expected to go up again in April. So we're expecting static or slightly increased prices over the next year. And the cheapest fixes at the moment are 10% below the current cap. So based on all the predictions, it's very likely you will save substantially by getting a fix. What is more difficult to know is the longer you go out, the predictions available from the analysts only go up to a year.

• 46:27Martin Lewis?

  So once you start to go out beyond a year, we're in the mists of nobody knows. We don't know what energy policy will be. We don't know how things are going to move. We don't know what's going to go happen to the wholesale markets. At the same time, if you fix longer, then prices tend to be higher. The longer fixes aren't as cheap as cheaper fixes in general, occasionally there's an outlier. And the lock-in penalties, the early exit penalties, if you want to change a bigger. Now, of course, that's more important in a longer fix because on a short fix, you're probably going to keep it for the year. The price is pretty decent and if you had to leave 50 quid isn't too bad. But if you're paying a 200 pound early exit penalty to leave a longer fix

• 47:08Martin Lewis?

  because that fix no longer looks competitive, then that changes the maths, which is the reason why they put a bigger fix in because they know that's more likely to happen on a long fix. So if I go back to Farrell's question, which I think was, is this a decent time to lock in a 12 plus month fix? It's certainly a decent time to fix. It's certainly a decent time to lock in a 12 or 15 months fix. But I always struggle to answer for a time period longer than that, not because it isn't a decent time, just because I don't have any data to make that assumption on.

• 47:39Speaker 02

  Understood. How long is the longest fix you could get?

• 47:42Martin Lewis?

  Oh, I mean, we've seen in the past three or four years, I don't know what the longest on the market is at the moment. I'm sure there are some two-year out there. I don't know if there are any three-year at the moment.

• 47:51Speaker 02

  Okay. Another question, Georgie. If the 5% VAT is removed, as the budget has speculated, what chances there that the cap goes up by 5% by the energy companies to make more profit?

• 48:02Martin Lewis?

  None. Energy companies don't set the price cap. Two thirds of homes are on price cap tariffs. The price cap is set by the energy regulator OFGEM. So, and it is, it limits the amount that they can charge on their standard, their default tariffs, the tariffs that you're on if you've never switched, the tariffs that you're on if you're on a special tariff that comes to an end that you'll automatically be moved to. They're the do nothing tariffs. If you've done nothing, you're on the price cap, which is why two thirds of the country are on the price cap and it's a pence cap and you should get off it. But that price is set by OFGEM. If we take the example that 5% VAT is brought off, well, that would be, come straight off the price from the 1st of January, I would suspect. I don't know about the timings, that would be my guess.

• 48:44Martin Lewis?

  I think it is more likely we see a different mechanism for reducing energy bills. I'm expecting to see something. It could well be that they reduce a chunk off the standing charge, which is what I would like to see because then everybody benefits by the same amount. Or they reduce a chunk of the, like the, some of the green charges on the unit rate that you pay. So you might reduce your unit rate by two or three pence by getting rid of some of the green charges. In which case, it's not a flat amount that everybody gets. Higher users will gain more because you have a reduction in the unit rate. So, I would, I suspect if they do that, that would come in from either the 1st of January price cap or the 1st of April price cap. And the regulator would factor that into its prices. So if it is the 1st of January, because the budget's after the price cap announcement,

• 49:29Martin Lewis?

  because the budget's so late this year, they could always say, well, we're just changing that January price cap. That wouldn't be particularly difficult or onerous to do. Where it gets more interested is for the non-price regulated tariffs. So the fixes, the variable, the special tariffs that are outside the regulated price cap mechanism, the non-standard charges. Now here, there is a chance that there is some profiteering and whatever the reduction that comes, if there is a reduction in the budget, is then they regain or recoup some of it. I wouldn't expect to see that at a large scale though, because the market is effectively split. You have the do nothing people who are on the price cap. You know, and you're on the price cap because you've not done anything either ever or when

• 50:14Martin Lewis?

  your special deal ended. And you have the active churning customers who are the ones who pick the other tariffs. And the active churning customers tend to be more price sensitive. So there's a more competitive market for those people. So I don't think that firms will be able to get away quite as much as profiteering and taking some of that gain back on those tariffs than they would have done on the price cap, but the price cap is regulated. So I'm less sceptical than you, Georgie, but you never know.

• 50:40Speaker 02

  Gavlar has tweeted.

• 50:42Martin Lewis?

  Gavlar, is that Gavin and Stacey?

• 50:44Speaker 02

  Gavlar. Gavlar. Pretty sure I'll be hitting pension age by the time we get this £300 off your energy bills implemented.

• 50:52Martin Lewis?

  Yeah, but Gavlar, what I don't know, right? He didn't talk like that, did he?

• 50:55Speaker 02

  Yeah, yeah, yeah, Gavin did.

• 50:57Martin Lewis?

  He'd rather do it like this.

• 50:58Speaker 02

  No, Gavin was from Essex.

• 51:00Martin Lewis?

  I'm doing the other way. Now, maybe Gavlar, but I don't know. I should just stop accents, I don't know, I did. What I don't know is how old you are. I mean, you might get hit pension age in six weeks' time, for all I know. But however old you are, I think it will be quite a long time, if ever, before we get the £300 of energy bills. The latest independent reports out there is the investment that we need in our infrastructure, both in our infrastructure generally to get it up to scratch, but also if we're going to continue the government policy of renewables, is going to add more to our bills than it's going to save us until at least the mid 2030s. So I think there is a real question over that £300 off your energy bills promise. And we certainly haven't seen it delivered yet.

• 51:43Martin Lewis?

  But that's getting a little bit political for me, so I will leave it for others. But I don't, Gavlar, I don't think you're wrong.

• 51:48Speaker 02

  Don't think. I won't do it either. Final one from Mandy. She says the price cap should be scrapped. It's artificially keeping prices up. Energy firms go up to the limit, not down. They have a monopoly. Allow competition and prices will come down.

• 52:04Martin Lewis?

  Well, I said before I wasn't in favour of the price cap when it came in, and it's still, I call it a pants cap. But I actually disagree with your analysis, Mandy, I'm sorry. What the price cap was brought in to do was to be a backstop for those people who don't switch. And it was to be a backstop that the people who don't switch, many of those who are outside of the ability of being within the competitive market, at least will not be ripped off. Now, the relative prices of standard prices compared to other prices has come down because of the price cap. So, you know, your 93-year-old grandfather with onset dementia,

• 52:46Martin Lewis?

  who is not going to be going on to a comparison site and finding their cheapest prices, does get some protection from the price cap. The big problem with the price cap now is it was meant to just be a backstop for those people, but way too many people are on it and we don't have a competitive market. And one of the reasons I objected to the price cap in the first place was not because I didn't think it would limit prices for those people. It's because I thought there should be a social tariff for the people who are vulnerable and unable to switch for themselves, which would be substantially cheaper than the price cap. And then I would leave the rest to the open market. Because what you need to encourage people to switch is big differentials. You need to have big price differences and bigger savings. And therefore, what we've done is we've interfered within the market. We've got rid of some level of competition.

• 53:31Martin Lewis?

  We've regulated some form of prices. We haven't really protected that well, the most vulnerable in society. And it is all a bit of a pig's ear. So I sort of agree with you, but I wouldn't scrap the price cap without a form of social tariff. And I have to be fair, you're right that the price cap, they all price to the maximum. But if we didn't have a price cap, based on what was happening before we had one, they would, most of the big monopoly, old monopoly-type providers would be pricing even higher than that on their standard charges, in my view. That's based from intuition and having looked at it over the years. I haven't done a data find on it, but it's an opinion thing. Do you have any more for me? I don't. You're done. I'm done. Okay. Well, look, I think it's a really interesting show. Lots of different

• 54:13Martin Lewis?

  subjects in there. We'll be covering energy more because we'll know what that price cap announcement is this Friday, or maybe you're listening to the podcast after this Friday, in which case you know and I don't. And as for student finance, do me a favour, there are so many, it's over 1.1 million people who overpay just in the 24, 25 tax year alone. So if you know someone in their twenties, thirties and forties who is still paying off their student loan, why not suggest that they have a listen to this pod? Because it could be very lucrative for them.

• 54:42Martin Lewis?

  And that's it for this week. If you've enjoyed it, please do tell your friends you've been listening to the Martin Lewis podcast and why not subscribe? And then your pockets will be pleased with you. We tend to put out a new episode every Thursday and now on Mondays too, in the form of our Question Time podcast, where you can ask me absolutely anything and everything you want. If you've got a question for that, then just send it to [email protected]. And if you haven't enjoyed it, then ask yourself the question, turn the mirror on you. Why are you still listening after one hour if you haven't enjoyed it? You maybe need to look at your decision making skills. They're not working that well. There is a knob, you know. You can turn it off.

• 55:36Speaker 04

  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 [email protected]. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

• 56:17Speaker 00

  Welcome to The Haunted Library. Join me, Colin Morgan, as I read Frankenstein by Mary Shelley.

• 56:27Speaker 00

  A story of science and ambition, loneliness and longing, and what it truly means to be human.

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  Listen to The Haunted Library wherever you get your podcasts, or find us on YouTube.