Question Time: Best kids’ savings or investments? Pension at 50? Which mortgage to overpay? Snakes, or an angry gorilla?

In our Question Time podcast, Martin Lewis gives you answers on anything and everything, including: why do I pay interest even if I pay off my credit cards in full? Where’s the best place to save and invest for my young children who have pension income from my late husband? I’ve got two mortgages on my house, which should I overpay? What’s the best place for me to start a new pension aged 50? Plus, would Martin rather be locked in an empty shopping centre for 24 hours with 1000 snakes, or one angry gorilla? Listen to find out! 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 if he’s got a favourite marsupial, how many miles he could walk backwards, or have a very complicated question about your personal 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.

• 0:00Speaker 00

  This BBC podcast is supported by ads outside the UK.

• 0:06Speaker 01

  Cheers to fall savings at Whole Foods Market, home of higher ingredient standards. This Halloween, share chocolates and candies made without that spooky high fructose corn syrup. Throwing a party? Make it easy with a berry chantilly cake. Ready to cook pizza? No antibiotics ever chicken wings. And sushi made fresh daily. Fall gatherings never tasted better. Save through November 3rd at Whole Foods Market.

• 0:33Speaker 02

  Sometimes we all need an extra helping hand, especially with the tricky business problem you've been putting off. Claude is an AI for just that. It's a collaborator that understands your entire workflow and thinks with you, not for you. And Claude isn't just for quick questions. Hand it a whole task like turning a folder of scattered notes into a report, and it does the work and hands back something finished that you can open and edit. Claude can now draft a doc or deck right in front of you. And Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system, and it comes back in your own design language, ready to edit right on the canvas. It works with your files and the tools you already use, like Gmail and Slack.

• 1:17Speaker 02

  And whether you're debugging code at midnight, building a financial model, or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai/solve. That's claude.ai/solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. claude.ai/solve.

• 1:47Martin Lewis?

  Now, cash withdrawals on most cards, you have to pay interest for the month.

• 1:52Speaker 04

  Hello, Matt and Martin, Martin and Matt.

• 1:54Martin Lewis?

  I'd look at paying the one with the highest interest. Because that's the one that's growing faster. What's she doing? It's a body of a dragon, my face, breathing fire. But you may think it's not a good answer. Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our question time episode where you get to ask me your questions on absolutely anything and everything, brackets within reason, close brackets. This week, you asked me, why do I pay interest if I pay off my credit cards in full? Where's the best place to save and invest for my young children who have pension income from my late husband? I have two mortgages on my house. Which do I overpay? What's the best place for me to start a new pension aged 50?

• 2:35Martin Lewis?

  And, Martin, would you rather be locked in an empty shopping centre for 24 hours with a thousand snakes or an angry gorilla? Play the theme tune.

• 2:58Martin Lewis?

  Hello and welcome to our question time edition. Let me introduce he who must be obeyed, the curator of questions himself, Mr. Matthew Burnham Esquire.

• 3:11Speaker 05

  Full name in me. Do you know, not many people do that.

• 3:14Martin Lewis?

  Can I, can I check?

• 3:16Speaker 05

  Go on.

• 3:17Martin Lewis?

  Are you a property owner?

• 3:18Speaker 05

  I'm not, no.

• 3:19Martin Lewis?

  Can I, don't edit it, we'll just, I'll make an apology on air. Let's delete the Esquire.

• 3:23Speaker 05

  No, no, I like the Esquire.

• 3:24Martin Lewis?

  You can't have it. I believe to be an Esquire, you have to own property. Rosie, Rosie who's listening, Rosie, can you let me know and we'll do, we'll check whether I'm right or not about Esquire a little bit later in the podcast. But let's get on with the question.

• 3:37Speaker 05

  Before we get into it. You were talking on the podcast with Adrian about your walk into work and how something happened to you. Someone asked you, what was it, a poem?

• 3:45Martin Lewis?

  A poem.

• 3:46Speaker 05

  A poem. So I had something not very similar, but it was on my walk to work. As I was walking in, I was drinking my coffee. It's something I've started doing. I make my coffee and then drink it on the way. Tried to get the last bit of dregs from the bottom of the cup. So I tipped it up with a lot of fury to try and get it. And something from the cup. Went into my mouth and I don't know what it is. So I just spat it everywhere and unfortunately there was someone

• 4:10Martin Lewis?

  Oh Matt.

• 4:11Speaker 05

  In range who didn't get too much, but you know, had to jump out of the way. It was disgusting.

• 4:16Martin Lewis?

  Did you apologise profusely?

• 4:18Speaker 05

  Profusely, went really red, really embarrassed. And then was

• 4:22Martin Lewis?

  Were they alright?

• 4:23Speaker 05

  They were fired. I was voicing to all my friends to, you know, when you've just got to get it off your chest.

• 4:27Martin Lewis?

  Yeah, yeah, totally. Well, we'd like to, on behalf of

• 4:30Speaker 05

  Apologise, yeah.

• 4:31Martin Lewis?

  To the person in Matt spat in their face, he's a good boy really.

• 4:34Speaker 05

  On their shoes, but it's fine.

• 4:35Martin Lewis?

  Okay.

• 4:36Speaker 05

  Shall we go to a question? Right, I've got one from Maggie to start with.

• 4:40Martin Lewis?

  Okay.

• 4:40Speaker 05

  She has a simple one. She says, she pays off both her credit cards every month in full.

• 4:44Martin Lewis?

  In full!

• 4:45Speaker 05

  But she's still charged interest. Why is that?

• 4:50Martin Lewis?

  Could be a number of reasons. I think it's not likely to be because you have one of the very, very few credit cards. Lloyds used to have one. I don't know if it's still available, that does make you pay interest even if you clear in full. The vast majority don't. You're looking for, it's normally on the summary box, it's something like 56 day interest free period. But what I think is maybe happening, have you withdrawn cash?

• 5:14Martin Lewis?

  I think it may be cash withdrawals. Now, cash withdrawals on most cards, even if you pay off in full, you have to pay interest for the month. So the in full rule is if you clear a card in full with your spending, then there is no interest to be paid at all. But even if you miss it by a penny, so I always give the example, if you have a thousand pounds on a credit card, you pay off a thousand pounds, there's no interest if it's all from spending. If you have a thousand pounds on a credit card, you pay off 999 pounds and 99 pence. You don't just pay interest on the penny, you still pay interest on the entire thousand pounds. And that's why my rule is in full, not nearly in full, not close to in full, it's in full. But that rule tends not to work on cash withdrawals.

• 5:56Martin Lewis?

  So if you ever take cash out on a credit card, then you are paid the interest on the, what you've taken out on cash across the month. So my guess, without knowing more details, is it's probably a cash withdrawal.

• 6:10Martin Lewis?

  Okay, so all of you listening, you know his format. Let's say it all at once. Matt, is it a caller?

• 6:16Speaker 05

  Of course, it's Patricia. She's in Edgeware. Hi Patricia.

• 6:20Speaker 04

  Hello, Matt.

• 6:21Martin Lewis?

  Hello Patricia.

• 6:23Speaker 04

  Hello, Matt and Martin. Martin and Matt?

• 6:26Speaker 05

  Yay!

• 6:27Martin Lewis?

  You did say Matt first.

• 6:29Speaker 05

  It's always Matt and Martin.

• 6:30Martin Lewis?

  Never the best way to get a good answer Patricia, I'll be honest with you. It's, you know, who do you want? I mean, he puts you on air, but it's me who gives you the... Anyway. What can we do for you?

• 6:40Speaker 04

  Right, so my late husband left a dependance pension in 2024 and it's shared between our two children. And as the gross amount of their income is a bit over the tax threshold, they pay a small amount of income tax

• 6:54Martin Lewis?

  Yeah.

• 6:54Speaker 04

  on their pension earnings, but they end up with a net amount of just over, um, just over 1,100 monthly. So, this is, I mean, it's a low income for an adult, but it's actually a considerable amount for a child.

• 7:07Martin Lewis?

  How old are your children?

• 7:08Speaker 04

  They, they're almost 11.

• 7:11Martin Lewis?

  Okay, so they're still very young. They're still primary age, yeah.

• 7:14Speaker 04

  They are, yes, just about, yes. So, um...

• 7:16Martin Lewis?

  I'm so sorry for your, for your loss as well.

• 7:19Speaker 04

  Thank you very much. Hasn't been easy, but...

• 7:22Martin Lewis?

  No, well, I don't know if you know, but I, I lost my mother when I was 11.

• 7:26Speaker 04

  Oh, I didn't know that. She's the same age.

• 7:28Martin Lewis?

  I did, and it's a very difficult time in life and you've got a lot on you and so let's see what we can do to help you.

• 7:35Speaker 04

  Thank you. So I'm aware that they'd be taxed on interest over £100, I think, because the source is a parent and I'm assuming, I'm assuming that a pension still counts, their dad's pension counts as a parent's source.

• 7:50Martin Lewis?

  I need to be straight. I don't know that.

• 7:53Speaker 04

  Okay.

• 7:53Martin Lewis?

  I, I would have to check. It's a relatively rare situation for me. I would have to check. Because the money isn't from a parent, the money is from a pension.

• 8:02Speaker 04

  Right.

• 8:03Martin Lewis?

  And therefore, are they the pension recipient as if, as if it's straight tax? Um, I can't answer that now. I genuinely do not know the answer, but I don't think it's, I don't think it's as straightforward as you're saying. I certainly don't think it's a, it's a slam dunk that you'd have. And just let me explain to people who are listening. So there's a rule, if money given by a parent or stepparent to a child and put in savings, if more than £100 a year of interest is earned on it, this is only from a parent or stepparent, not grandparent, not auntie or uncle, uncle, then that savings is taxed at their parents' marginal tax rate. And so as I say that Patricia, I'm sorry, I need to be blunt and I hope I'm not saying because your husband isn't with us, he doesn't have a marginal tax rate.

• 8:48Speaker 04

  Right.

• 8:49Martin Lewis?

  So I would think, I think it's very difficult for it to work in that sense would be my assumption, but I'm only guessing.

• 8:55Speaker 04

  Okay, I just worked on the assumption that it would be. So what I did was I opened a cash junior ISA.

• 9:05Martin Lewis?

  Good, I, well, I think that's a good idea. I might question whether it should be cash or not, but I think it's a good idea.

• 9:09Speaker 04

  I'm coming to that. So the pensions are going to be paid to me for around another seven more years, but then they revert to their control, but for the time being, I'm the sole custodian of this money. Now.

• 9:21Martin Lewis?

  So just to check, you're the custodian of the money, but it's their income. So you're not taxed. Okay.

• 9:28Speaker 04

  That's right. So they're taxed actually.

• 9:31Martin Lewis?

  Yeah.

• 9:31Speaker 04

  They're taxed at source from the pension and then they receive, they receive the net amount, not the gross amount.

• 9:37Martin Lewis?

  Yeah.

• 9:38Speaker 04

  So there's a lot of information on managing money for adults, obviously, but there's actually a lot less for children because they're not usually significant earners. So that's why I appreciate some guidance. So this is what I've done so far. So my first intention was for them managing the money was to save in a tax efficient way because of what I thought about the £100.

• 10:00Martin Lewis?

  Yeah.

• 10:00Speaker 04

  And so they've reached a maximum of their second cash junior ISA now, which is a lot lower the threshold for a child than it is for an adult.

• 10:11Martin Lewis?

  But you can have, you can do it each year though.

• 10:13Speaker 04

  Yes, yes. So this is their second one. So it's the second year and that's they've maxed that out now. So I then I also opened a junior SIP.

• 10:23Martin Lewis?

  Good for you.

• 10:24Speaker 04

  Almost a year ago, because I, what I did was I used your half your age rule.

• 10:28Martin Lewis?

  Yeah, it's amazing.

• 10:29Speaker 04

  Calculated 5% of the gross pension to work out what monthly contribution I should put. And then obviously there's 20% the government adds. So to me that's free money. It's a no brainer.

• 10:39Martin Lewis?

  So just let me, just let me do this for those listening, not for you. So a SIP is a self-invested personal pension. You can put money into a pension for a child, even if they have no income of their own. You can put up to £3,600 a year in, costs you about £2,700 because effectively you get, you get as if they had paid income tax at 20% on it, gets put into your pension. The earlier you put money into a pension because of compound growth, generally the much better it is for you. So putting it in them at the age of nine, when they get to be old and wrinkly like me, this will be hugely beneficial. It will not make up for the reason that they have the money being paid to them. But at least it means that, that your husband is giving them a sound financial future. So I think that's a really

• 11:23Martin Lewis?

  good and sensible thing to do. And, you know, hopefully you've got a nice broad spread of investments that will work well for you over that period.

• 11:31Speaker 04

  Well, I just, I didn't know what to do. So I just did the recommended one, which is like a general world index.

• 11:39Martin Lewis?

  Okay, yeah, global, global index tracker. But I mean, I can't advise on investments, but it's not giving me any horror signs.

• 11:46Speaker 04

  Right. So the only thing with this, of course, is that if I put money into this, it does lock it away and they cannot access it, as you say, until they're 57, I think it is. So I don't want to put too much that, you know, that they might need in life. But I think the 5% of what they're earning at the moment is probably okay. So

• 12:08Martin Lewis?

  May I ask you a personal question just before we carry on? And I don't want to go too much into detail. Do you have enough funds to be able to look after their day-to-day needs?

• 12:18Speaker 04

  Yes.

• 12:19Martin Lewis?

  Right, okay. That would have changed, that would have changed the equation. Well, that, that's good. So then we're only looking about what we do that's best for them, not what's best for the family?

• 12:28Speaker 04

  No, no. I mean, this is, this is Um. The way I look at it is this is their money for their future. So it needs to be wisely looked after for them. So the lot, the, the next thing I did was, uh, once they'd maxed out their ISA this year, I brought some, bought some premium bonds, um, about one and a half thousand. Um, because that's tax free, the prizes, if you, and I understand the median return is zero.

• 12:56Martin Lewis?

  You knew where it was going, didn't you?

• 12:57Speaker 04

  I, I know exactly. And you're right, it is zero if you don't have a large amount of bonds. And of course, they don't. You need about probably thirty thousand or more to

• 13:06Martin Lewis?

  You're good, yes.

• 13:07Speaker 04

  start to, to make what you would in a, even just a savings account or, you know, let alone win a top prize. So I do understand that, you know, it's, it's zero, but it, it, it's not at risk, is it? So.

• 13:21Martin Lewis?

  No, but it wouldn't be, honestly, I think where everything else, so the, the, the, if I were to make a couple of points, this is your choice. I can't advise you on this. I could just give you some suggestions. I think I would probably be looking, when you're putting money away in a junior ISA, as you have, that you can save up to nine thousand pounds a year tax free for your cha- child. And there's no tax on that, even if money given by the parent, uh, and that money is locked away until they're eighteen. I, because it's being locked away for a long period, I'd be thinking about doing some form of investment in that too, rather than cash. So I'd be thinking, maybe in the next one, you do an investment ISA.

• 13:55Speaker 04

  Hmm.

• 13:56Martin Lewis?

  And, and you, again, just so that they'd have that cash could grow more quickly and that would be accessible to them at the age of eighteen. I think you may be slightly letting the tax tail wag the dog here. I mean, you're worried, I, I mean, if we just take, and I'm going to reduce it to absurdity, and we, of course, we don't know, you're saying to me, I've put fifteen hundred quid in premium bonds, even though the median return is likely to be zero because it prevents me from tax, protects me from tax. Well, you're not going to pay any tax on zero return anyway. You'd be better to pay that twenty percent tax on a four percent return than, um, no tax on a zero percent return.

• 14:29Speaker 04

  Yes, that does make sense.

• 14:31Martin Lewis?

  Yeah, so and of course you might win in premium bonds, but with typical luck you won't. So on that amount, I would probably be putting that into some more, you know, a nationwide flex saver at five percent interest or the Halifax regular saver that you could put money away for them in. That would be my instinct. There's no rights or wrong here on that particular amount. And we will do the check for you and find out and we will get in touch about what the situation is on the pension money as to whether you have that hundred pound cap. Because if there isn't, then there's no tax to pay anyway until they go over. Or no, because they've got their thousand pounds allowance and they've got their starting savings allowance. There wouldn't be any tax on the income that they've got on savings interest. Anyway, carry on, sorry.

• 15:13Speaker 04

  So I, they've now got a couple of months' payments to come in this financial year, this tax year. But then I was wondering whether I should not, obviously they can't, I can't do a tax, sorry, stocks and shares ISA because they've used up their allowance. But I was thinking, should I therefore, rather than put it in premium bonds, invest that in just a normal stocks and shares ISA? Not ISA, sorry, account, beg your pardon, just a normal account.

• 15:44Martin Lewis?

  Well, I mean, the answer, my answer is yes, but I have a slight thing that you might need to think about here. The risk of tax is likely more on the amounts that you're saving or you're going to be saving. Capital gains tax, you know, if you put money away for them now that they can't touch for 10 years and you're going to end up putting five, 10, 15,000 pounds in and that money grows, you only get a three thousand pounds capital gains allowance. And that capital, even if you've invested it for 10 years, you only get three thousand pounds of capital gains you can make, three thousand pounds of profit you can make before it's taxable.

• 16:16Speaker 04

  Per year.

• 16:16Martin Lewis?

  Per, per year, but, but if you invest for 10 years, it's in, it's in when you crystallize it. It's in the year you sell it. So if it's grown over 10 years, it's not three thousand pounds a year. It's still only three thousand pounds in the year that you sell it.

• 16:28Speaker 04

  Yes.

• 16:29Martin Lewis?

  When you make profits. So the risk of tax is probably more on the stocks and shares than it is on your cash ISA.

• 16:36Speaker 04

  Right.

• 16:37Martin Lewis?

  So what you might want to do is, if we're saying, I'll make it very simple. If we're saying you've got £10,000 and you want to put £5,000 in cash and £5,000 in shares, and you've got an allow, then you would probably want to prioritise if you're putting shares, using your ISA for the shares as opposed to for the cash, and having the cash be the one that isn't inside an ISA.

• 17:03Speaker 04

  Right, because it's, yes, I see what you mean, because you're more likely to make a bigger gain on the stocks and shares.

• 17:09Martin Lewis?

  Because you're putting money in stocks and shares for it to make a bigger gain. Now, you can move a cash ISA into a stocks and shares ISA relatively easily. So if that's what you were doing, and again, I can't give you advice. My thought is you need to question which will be the most, I have a tax wrapper. Is it, I have different assets, which assets would be best for me to protect from tax?

• 17:30Speaker 04

  Right.

• 17:30Martin Lewis?

  And I think that's an open question for you.

• 17:33Speaker 04

  I'm just a little bit nervous about stocks and shares, only because I got burnt some years ago. I bought some shares in food companies and they crashed and they have never recovered today.

• 17:48Martin Lewis?

  Did you put them in individual companies?

• 17:51Speaker 04

  Yes, I did. And I, yes, I did.

• 17:55Martin Lewis?

  And I think the point is, no one's saying that. Now, this is not a recommendation, this is an example. You could put some in a FTSE 100 tracker, some in an S&P 500 tracker, some in a global tracker, which is a broad spread, a broad spread over a cross of indices. And the likelihood of you losing lots of money in that

• 18:12Speaker 04

  Is lower.

• 18:13Martin Lewis?

  Is lower. The likelihood of you gaining lots is lower because you're mitigating the risk by putting it in a basket. So, look, you're right, and there is a risk in stocks and shares, but there is a long time to play the market here. And therefore, and also, this money isn't crucial.

• 18:30Martin Lewis?

  Let's be really plain, it's not crucial. So therefore, the risk is, again, your decision, whether you think it's an acceptable risk. I think if you went to an independent financial advisor, which is something you might want to do with this amount of money coming in, I suspect they would be weighting you much more heavily to investments than you are right now.

• 18:48Speaker 04

  Right, okay.

• 18:50Martin Lewis?

  But that doesn't mean they're right.

• 18:51Speaker 04

  No, I mean, what you're saying in a sense is, there's always a kind of an emotional thing with stocks and shares, there isn't there, there's a, you know, fear or and I know you keep, the only reason I started thinking about this was because you keep saying more people should be investing.

• 19:08Martin Lewis?

  Yeah.

• 19:09Speaker 04

  And I was thinking, well.

• 19:11Martin Lewis?

  They should be investing with money they don't need over a long term in a broad spread of investment.

• 19:17Speaker 04

  Yeah, yeah. So it does make sense.

• 19:20Martin Lewis?

  How, listen, it's good, it's good thinking. Your question is very interesting, what I call a permission question. Right, this is what you've done today, and you have done a brilliant amount of research. You obviously have taken this very seriously, you know what you're talking about. And you've come to me because you want permission with a sounding board that, if it's not self-aggrandizing, someone you trust to say, to say, am I doing all right? Well, the first thing I say to you is you're doing really well. Okay, what you've done so far is really, we're talking about the icing, not the cake. Okay, that's the first thing I want you to understand. We're saying, well, could you do, could you do a little better? Could it be a little bit tastier if you added some sultanas? You know what I mean?

• 20:04Martin Lewis?

  We're not saying what on earth have you baked here. So I think, I hope, you should be really proud of yourself for the way that you have sorted this out. And what I'm saying are some things that you may want to think about, but the decision is ultimately yours. Without a crystal ball, there are no rights or wrongs here.

• 20:22Speaker 04

  No, that's right.

• 20:23Martin Lewis?

  But you're doing, you're doing a good job.

• 20:26Speaker 04

  Okay, thank you, that's reassuring and I think I'm a little bit more confident now about going down the stocks and shares.

• 20:35Martin Lewis?

  But you can, you can dip your toe in, you don't have to do all of it. If you're not comfortable, you know, you have nine thousand pounds in a GICER a year that you're allowed to use, you could put, if you feel, put two thousand in stocks and shares and seven thousand in cash, if that's what makes you feel better.

• 20:49Speaker 04

  Yeah, yeah, maybe. Yes, to gain confidence, shall we say.

• 20:52Martin Lewis?

  To gain confidence. And remember. Investments go up and down.

• 20:57Speaker 04

  I know.

• 20:57Martin Lewis?

  That's why you do it over the long period. So if you look at them, don't look at them too often.

• 21:01Speaker 04

  No, I know. I mean, objectively, if you look at the market, you look at the FTSE 100, for example, it historically, it rises over a long time.

• 21:11Martin Lewis?

  I mean, there's no guarantee of that, but over a long period it does.

• 21:13Speaker 04

  I know, but that's what makes people nervous, isn't it?

• 21:16Martin Lewis?

  This isn't your.

• 21:16Speaker 04

  The bit about there's no guarantee and what if there's a crash?

• 21:19Martin Lewis?

  This isn't your feeding yourself money.

• 21:21Speaker 04

  No, no, no.

• 21:22Martin Lewis?

  It's not, it's not, it's a, it's a, hopefully, setting up your kids for life money.

• 21:27Speaker 04

  Yes, but I, but I do take it seriously.

• 21:30Martin Lewis?

  As you should.

• 21:30Speaker 04

  And I am their custodian, and so I feel that I don't want to make the wrong decisions, even if it's, as you say, I know it's not food money, but it's.

• 21:39Martin Lewis?

  No, but, but you can't make the right decisions because you don't have a crystal ball. So don't, you know, you, you can make a good decision and have a bad outcome.

• 21:47Speaker 04

  Yes.

• 21:47Martin Lewis?

  And that happens to people. And then they beat themselves up and they think they made a bad decision. There's nothing you're doing here that is making me go, what's she doing? Right.

• 21:57Speaker 04

  Okay.

• 21:57Martin Lewis?

  I'm not doing that at all.

• 21:59Speaker 04

  Okay.

• 22:00Martin Lewis?

  Good luck to you.

• 22:01Speaker 04

  Thank you so much.

• 22:02Martin Lewis?

  That's a pleasure. Thank you for calling. Now, just doing a little bit of digging, and I'm not fully there. So on the back of that, under section 579A to 579C, Income Tax, Earnings and Pensions, Acts 2003, the person receiving the dependent scheme pension is liable for income tax on the amount they receive as pension income. The pair of the pension will deduct tax in accordance with the PAYE regulations. My first reading of that, and I will want to check this, is that that means this is not subject to the £100 cap as money from a parent. We'll check this and we'll get Patricia the proper answer, but that's my, that's my instinct as where we're going.

• 22:41Speaker 05

  On Martin's request, after we recorded the podcast, we played Martin's full chat with Patricia to Kate Gannon, chartered independent financial planner and vice president of the Personal Finance Society, and also to a financial advisor from AJ Bell. And they agreed both on the tax issue and the general premise of moving towards investing. They confirmed the pension money wouldn't be subject to the £100 and would encourage Patricia to increase her investments and think about, while possible, putting even more into the pension, as it can always be reduced if the children need the money.

• 23:15Martin Lewis?

  Right, Matt, what do you have to read out for me now?

• 23:18Speaker 05

  A question from Jamie that he sent to [email protected]. He says, hi, Martin, and then in brackets, and Matt.

• 23:27Martin Lewis?

  Which is the correct etiquette, everybody.

• 23:29Speaker 05

  He says, looking for some advice if you can help. Our mortgage is split into two parts. On the first one, we owe about 70k and the interest rate is 4.2% until February 2029. The second part's about 135k is on a 2.3% rate till December 2028. Have you got that?

• 23:47Martin Lewis?

  Yep.

• 23:48Speaker 05

  Cool. I have about 3k I've saved up towards making overpayments. The interest rate is now less than the 2.3%, so I think I should now pay it off the mortgage. My question is, what would you do? Pay off the bigger balance at the lower rate or the smaller one that has the higher interest rate? In December 2028, when the big one needs to be renewed, that's going to bump our monthly payments up massively, so I'm leaning towards that one. But is it more sensible to pay off the smaller one because that debt is growing faster?

• 24:16Martin Lewis?

  Well, the first thing I noticed in there is you said that your savings are paying 2.3%. I would start by saying get better savings. I mean, the top paying easy access savings at the moment is with Chase for newbies at 4.5%. And we can only do this based on that you're going to put your savings in the best possible place. And based on that, your savings interest rate is higher than the interest you're being charged in a mortgage. Therefore, you're generally better, as a riffle of thumb, just to keep earning the interest in savings rather than overpaying on the mortgage. And then you have the savings in somewhere accessible, somewhere easy access, that you're able to do, or you could put it in a fix until one of those were to come up so that, you know, at 4, 4.1%, you could lock money away for two years now.

• 24:59Martin Lewis?

  And then when your mortgage comes up to renewal, you make sure that the money is vested, so you have it accessible at that point and you can use it to reduce the next mortgage that you're going to get if the rates are going to be higher there. If we ignore that, then the question's pretty simple. You've got £70,000 at 4.2% until roughly the start of 2029 and you've got 2.3%, you've got £135,000 at 2.3% until roughly...

• 25:27Martin Lewis?

  At the start of 2029. Well, clearing the 4.2% mortgage will save you more money than clearing the 2.3% mortgage. Even though it's smaller, it doesn't make any difference. You're paying more on that one. And the point of which the repayments of each of these mortgage ends so close together, there's only a month or two difference, that even if you're going to have to pay a slightly higher rate for a couple of months, it doesn't change the equation. So I think it's pretty simple from my basis. I'd probably start by putting it more in savings. Sorry, I'd probably start by getting higher interest on my savings. And then if you, if you do want to pay one off, and the 4.2% is close to the top that you get in savings, and if you're paying tax on the savings, then the 4.2% is more expensive than the savings, so you might want to overpay. I'd look at paying the one with the highest interest rate, because that's the one that's growing faster.

• 26:15Martin Lewis?

  Now, I just need to come back to you on Esquire, Matt.

• 26:18Speaker 05

  Go on.

• 26:18Martin Lewis?

  And whether you are Esquire. I'm going to, because frankly, it's not that important, I'm going to trust an AI answer, which says, in the UK, Esquire, abbreviated as ESQ, is not legally restricted to property owners. While it was historically a formal title for the landed gentry, its modern use is involved into a general courtesy title for any man in a formal or professional setting. And sometimes it can be used as a shield bearer. So I'm gonna say, you're my shield bearer, and therefore you can be Matt Burnham Esquire.

• 26:54Speaker 05

  Thank you very much. So yeah, I will be writing that on my emails for the foreseeable.

• 26:58Martin Lewis?

  You can, yeah. I've got letters after my name, you can have some after yours.

• 27:01Speaker 05

  What would your shield look like? Would it be money?

• 27:03Martin Lewis?

  I don't know. I don't know.

• 27:05Speaker 05

  Your face?

• 27:06Martin Lewis?

  A little consumer dragon.

• 27:07Speaker 05

  A little consumer dragon, with your face on it?

• 27:10Martin Lewis?

  Yeah, maybe a bit like a sphinx. I'll be a dragon sphinx, a body of a dragon, my face, breathing fire, at high interest rates.

• 27:19Speaker 05

  And if anyone can draw that and send it in, then I'll send it on to Martin.

• 27:23Martin Lewis?

  Does that count as our funny question, or do you have a funny question?

• 27:26Speaker 05

  I wanna do a funny one, because it's quite simple, and I really like it. It's from Will. He asks quite a random one, actually.

• 27:34Martin Lewis?

  Okay, I quite like, sometimes you do them in a sort of semi-serious, it's not one of those.

• 27:38Speaker 05

  This is not serious in any way.

• 27:40Martin Lewis?

  This is the whole point, for those people listening who are new, because I always say you can ask me anything and everything within reason, this is Matt's within reason, anything and everything.

• 27:49Speaker 05

  It's a bit of light relief. He asks, would you rather be locked in an empty shopping centre for 24 hours with a thousand poisonous snakes, or just one angry gorilla?

• 28:00Martin Lewis?

  I actually have, I'm gonna be super pedantic, and say that's a very, very easy question. I would choose to be with a thousand poisonous snakes, and here's why.

• 28:12Speaker 05

  I was gonna say, why?

• 28:13Martin Lewis?

  Because poisonous snake, I believe, means, for something to be poisonous, I have to eat it, and I do not plan to eat any of those snakes. If they were venomous, then they could bite me, and I would be in trouble. But if they're poisonous, I think I would have to eat them in order to be poisoned, and therefore, my assumption is, these are simply a thousand snakes that are not dangerous to me, and while it wouldn't be particularly pleasant, I'm not gonna choose to eat any of them, and therefore I'd be safe. Whereas an angry gorilla, I am in big trouble.

• 28:48Martin Lewis?

  And I think, with that mic drop, you probably have another caller for me.

• 28:52Speaker 05

  I do, it's Marie, she's in Sidcot.

• 28:54Martin Lewis?

  Okay, Marie, hello. What is your question?

• 28:58Speaker 06

  So, I turned 50 a couple of weeks ago.

• 29:01Martin Lewis?

  You sound so much younger.

• 29:03Speaker 06

  I look it too.

• 29:06Speaker 06

  But it's kind of focused my attention on reviewing my future, and reviewing my pension. I've had a workplace pension for about 25 years, consolidated two into one. And then at the end of 2018, I was made redundant. So I've been self-employed ever since and I've been very good and I've paid in every month. Sort of less contribution, but but still paid in. But I've obviously had no employer contribution now for six years and and that situation is not going to change. So my annual statement like came a couple of days ago and I thought, right, I need to have a look at this and actually be sensible and plan for my future. And looking at it, the fees seem quite high and they seem to be actually negating what I'm paying in.

• 29:48Speaker 06

  So I really wanted to know if it's going to be best for me to move this across from a workplace-based pension to a personal pension and whether there are likely to be better deals with a pension, a personal pension.

• 30:02Martin Lewis?

  I'm going to give you a very good answer, but you may think it's not a good answer.

• 30:09Martin Lewis?

  I think now you're 50, you are entitled to get a free PensionWise appointment. PensionWise is part of the Money and Pension Service, which is a non-governmental organisation funded by a compulsory levy on the financial services industry. And it is there to give you impartial guidance on your personal pension situation. Now, when I say guidance, the difference between guidance and advice is they can answer all your questions, but they can't tell you individual products to go to. But everything that you've asked, they can do a proper detailed fact find with exactly what you've got and exactly what you should be doing and go through that with you. You can get a free PensionWise appointment if you're 50 or over, which you are,

• 30:53Martin Lewis?

  or if you're under 50 and have inherited someone else's pension, a retiring girlie due to poor health, or you scheme that should take your pension before age 55. You can book yourself an appointment through moneyhelper.org.uk. So my answer is quite simple. The best way to do this is to have a full fact find. If you go through that, by the way, and they they there are some complicated things you need to do, you can then go and pay for independent financial advice, but this is free. So I would always start with this. And I think I'm not going to answer your question any more than point you in that direction because they can do a better job and we'll have, you'll be able to give them all the facts and look at your actual pension products that I could do.

• 31:31Speaker 06

  That's fantastic. Thank you very much. Really appreciate it.

• 31:33Martin Lewis?

  So it was a good answer, not a bad answer?

• 31:35Speaker 06

  No, it was a great answer.

• 31:36Martin Lewis?

  Phew, good. And that seems a very nice, simple and clear-cut way to end this week's edition of Question Time. If you have any questions, do get in touch. Email dearmartin and matt@[email protected].

• 31:54Speaker 05

  And if you really want it included, start it with Matt.

• 31:59Martin Lewis?

  That's it for this week's Question Time. Don't forget to subscribe so you know when we release a new episode. We put out a new Question Time each Monday alongside the podcast with Adrian that runs on a Thursday. Aren't you lucky? Two doses of money-saving tips and tricks a week. Make sure you send in your questions. You can email [email protected] and remember, address it dearmartin and matt.

• 32:39Speaker 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.

• 33:15Speaker 06

  Sometimes we all need an extra helping hand, especially with a tricky business problem you've been putting off. Claude is the AI for just that. It's the collaborator that understands your entire workflow and thinks with you, not for you. And Claude isn't just for quick questions. Hand it a whole task, like turning a folder of scattered notes into a report, and it does the work and hands back something finished that you can open and edit. Claude can now draft a doc or deck right in front of you, and Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system, and it comes back in your own design language, ready to edit right on the canvas. It works with your files and the tools you already use, like Gmail and Slack.

• 34:00Speaker 06

  And whether you're debugging code at midnight, building a financial model, or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai/solve. That's claude.ai/solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. claude.ai/solve.

• 34:30Speaker 07

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

• 34:40Speaker 07

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

• 34:50Speaker 07

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