Pod Insights The Martin Lewis Podcast Free £310 bank switch | Winter Fuel Shenanigans | Energy Price Cap to fall but you should still fix About this episode Martin Lewis looks at the Energy Price Cap and what your best options are for your bills.
He gives his view on the recent announcement that the Winter Fuel Payment will be expanded.
A guide on how to get paid to switch bank accounts.
Tell Us this week is all about when have you saved a fortune by pure accident?
Mastermind explains the difference between annual and compound interest.
Transcript 12,906 words · 7 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:49 Martin Lewis? Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually, much of it comes from my BBC Radio 5 Live show with Adrian Charles, but don't worry, there's bonus money-saving tips just for you lucky, lucky podcast listeners. Today, it's a potpourri of a podcast, including free money! Yes, bank switching bonuses are back, up to £190 for free, and you may get another £120 on top of that. What's not to like? I'll run you through the best and answer your switching queries. The winter fuel payment may be expanded. We heard that from the Prime Minister yesterday. But exactly how will they do it? I have a preview for you of the energy price cap announcement that's coming tomorrow
2:32 Martin Lewis? that dictates the price two thirds of homes will pay from July. It's due to drop six to eight percent, but don't rest on your laurels. You can save 18% straight away by moving to the cheapest fix. This week's tell us is about how you've saved money by accident. From a six grand payout from insurance you forgot to cancel to misbooking holiday rooms and it turning out to be exactly what was needed. I've got a quick tip for you about how to cut the cost of a year's Disney plus. And then finally, in this week's mastermind, it's all about which is better with savings being paid interest monthly or annually. Play the theme tune.
3:31 Speaker 05 Right, winter fuel payments then. We had the PM speaking in PMQs yesterday. I do declare, I then heard you on the radio talking about it later. So take us through it again, so I really understand what's happening now.
3:47 Martin Lewis? So you remember that winter fuel payment, which is a payment of around £200 to the under 80s and £300 to the over 80s, used to be a universal benefit. So everybody in the age category were paid it and it's a household payment, not an individual payment, which is actually really important to understand because that's where some of the complexity comes in. Then, at the start of the Labour Party's governing session, one of its first major announcements was that it was going to make it a means tested benefit. Now, I think personally, I'm not sure there was that much principal objection to the concept of means testing in itself, because, you know, no one's saying that billionaires need to get this winter fuel payment for helping them with energy bills. The question was at the level at which... They tested it and how they tested it.
4:32 Martin Lewis? And I had some really rather major issues with that personally. So let me take you through my issues.
4:38 Speaker 05 Okay.
4:38 Martin Lewis? First of all, the level of the means test was set at effectively eleven thousand eight hundred pounds of income. So you would get winter fuel payment if you had less than eleven thousand eight hundred pounds of income. To put that in perspective, that is less than someone who gets the full new state pension would earn if they had no other income. So if you're on the full new state pension, you would not qualify for winter fuel payment. In other words, the basic, you don't get it. You have to be on a lower amount of income than that. Personally, I think that threshold was too low. I mean, if you remember that the typical energy bill, and we'll be talking more about that later in the show. The typical energy bill is currently around eighteen hundred pounds.
5:22 Martin Lewis? But older people tend to be in the house more and have their heating on more. Then eighteen hundred pounds out of an eleven thousand eight hundred pound total income is a huge whack. And anything that would help is important. So to take that away from people on eleven thousand eight hundred and fifty pounds seems cruel. Of course, there's always going to be winners and losers with a threshold. But you would suspect that the threshold should be around twenty thousand pounds would seem intuitively a better level if you were going to do it or even higher.
5:46 Speaker 05 But a point worth making is that it had been withering on the vine, hadn't it? This benefit for a number of years. I don't think it had increased with inflation, hadn't it? So it had calmed down in value effectively.
5:56 Martin Lewis? Yeah, I, I, you can argue that, but you can also argue there were huge amounts of energy support put in place during the start of the energy crisis. You know, thousands of pounds of support put in place, lots of other payments that were made for people. And this was on top of that. They took all those payments away and they took the winter fuel payment at the same time. So the, the delta, the change between the two years was absolutely phenomenal. And let's remember, we're still at energy bills typical eighteen hundred pounds. Before the energy crisis, you were talking eight hundred to twelve hundred pounds. So it's still very substantially higher than it was. So you have to factor those two things in. The second point, and the one that I've perhaps been most vociferous about.
6:38 Martin Lewis? And I think it was forgotten, I was watching some of the news programs last night and was missed. Is that the way they chose to means test winter fuel payment was by linking it to pension credit, which is a benefit low income state pensioners get.
6:55 Martin Lewis? And here's the problem. For over a decade, I have been shouting, yelling and cajolting older people to claim pension credit and to check if they're eligible for it because it is a critically underclaimed benefit. It always has been because of the complexities of the application form, because of the complexities of coming up. You know, I could say right now, if you've got income of under £227 total a week, everything added up, you're very likely to get it. But if your income's up to £250 a week as a single pensioner, you should still check because it's very complex. So it's a critically underclaimed benefit. And they have linked winter fuel payment eligibility to a benefit that we know is
7:36 Martin Lewis? critically underclaimed. Now, I would say that means that is an innately flawed proposition. And that's my frustration with it. And even on the government's own figures, the government figures say, right now, even though they have done some communication, and I've been out there shouting it as well, to get people to claim pension credit, there are still 700,000 eligible pensioners who aren't claiming it. And we need to just paint a picture of what that means. That means 700,000 pensioner households who have total earnings under £11,800 for an individual pensioner. And if it's a couple, you don't get double that,
8:17 Martin Lewis? it doesn't work that way. And many of these are the most vulnerable because they find claiming difficult, they haven't heard the messages, they're more difficult to reach, they intuitively would think they'd be people with onset of dementia. 700,000 people who the government thinks should get winter fuel payment, who aren't getting winter fuel payment because of the mechanism we have chosen to means test it. And that's probably, the threshold is a political decision. So I would think it should be higher, but it's a political decision. But to link it to a means test that is flawed, that for me is an unjust system. And I've been lobbying hard for that to change.
8:54 Speaker 05 What does it look like is going to happen now? What's going to change?
8:59 Martin Lewis? We don't know. All we know is...
9:03 Martin Lewis? The Prime Minister said more people should get it. Now, you could do that in a number of ways. You could do it by ensuring everybody who is on the threshold as it is now actually gets it, although that's incredibly difficult to do. Or you could do it by changing the means test mechanism, not upping the threshold. Now, I've had a suggestion out there, and I think some people have misunderstood what I've been suggesting. The suggestion that I've had out there, and it's one I spoke to the Chancellor about when this was first done and the flat came in, and I suggested what this is a good way of improving the situation. I need to state, my suggestion is an imperfect but workable solution, and this is a solution that could be done at speed. The problem we have is they've said it will be announced in the Autumn Budget,
9:47 Martin Lewis? but that looks like, unless they do something very simple, that will not be in place for this winter, it would be in place for the winter after. So the suggestion that I have come up with is simply a stop-gap suggestion that would be able to be done for this winter. And that is, that as well as pension credit being eligibility, so you'd keep it as it is now, you would also add in that all people of state pension age living in council tax bands A to C would also automatically get winter fuel payment. Why do I suggest that? A couple of reasons. First of all, because unlike pension credit, which is complicated, you know what council tax band you're in, it's pretty easy to check, and you know whether you're of state pension age. So claiming that is a much simpler call.
10:29 Martin Lewis? You know, if we had that, it'd be very simple to explain it, you could do ad virtue, you could do things. The second is, actually, when you do the mapping, if the idea is let's make sure no vulnerable pensioners are missing out, council tax bands A to C, the mapping is pretty good. It's not perfect, but it's pretty good that most vulnerable pensioners are living in council tax bands A to C. Now, what people say to me is, but hold on, there are some very poor pensioners in band D, and there are some very rich pensioners in band C. I know. I'm not saying it's perfect, I'm saying it's a hell of a lot better than the system we've got, and we have precedent that Rishi Sunak did a band A to D payment for everybody during the energy crisis, and we know it can be done very quickly and it could be worked.
11:12 Martin Lewis? Now for the next winter, you want a much more sophisticated system that increases the threshold and makes more people to claim pension credit. So my suggestion is not me saying this is the best way to do it. My suggestion is saying this is a way to do it quickly that would help more vulnerable pensioners for this year, which is way better than saying let's wait until the following year because energy bills this, as we're going to talk about later in the show, energy bills this winter will be likely, well, as high as they were last winter.
11:42 Speaker 05 Let's move on, Martin, on to bank switching. And actually, switching bank accounts, let's start off with Jacqueline's question. I've never switched banks before. Is it really worth the hassle? I have savings, but not sure where to put it.
11:56 Martin Lewis? Okay, so let's just stop for a second. This is not about savings. This is about switching current accounts. This is your day to day current account that you use for your normal banking. Switching savings accounts absolutely should be doing that is a piece of piddle.
12:09 Speaker 05 Yeah.
12:09 Martin Lewis? Sorry, almost went.
12:10 Speaker 05 Yeah.
12:11 Martin Lewis? Because, I mean, all you do is you literally take your money out of your savings account, you put it in a new one that's got a higher interest rate and you should absolutely unquestionably be doing that. With bank accounts, it's a little different because when I factor in, when I always talk about ditching, switching on lots of different products, we have to factor in your interaction with the product. And your interaction with the product, how often do you interact with this product? How much of a hassle is it? Savings account, in most people, you put your money away once a year, once every two years, and then you forget about it. So even if it is a little bit fiddly to open and you, but you get a good interest rate, it's worth doing. With a day to day bank account, I mean, this is your relationship banking. This is the one that you're dealing with all the time. You want a good app, you want good customer service. Those things matter to people, different weightings of exactly how much they matter, but those are worth factoring in.
12:56 Martin Lewis? So is it worth switching bank account? It's very simple. There are four bank accounts willing to pay for your custom right now. You can call it a legal bribe if you like, you can call it a bank switching bonus. All of those, I think, are relatively legitimate. So the question is. Does your bank make you smile? Does your bank make you happy enough that you're willing to forgo the opportunity cost of losing the money that you would be paid to switch in order to stay there? If your answer is yes, great, do it. If your answer is, actually, I'd prefer a couple of hundred quid than sticking with my existing bank, then move. And some of the banks that are offering to pay you include, well, one of them is the
13:39 Martin Lewis? top service rated bank in the country, if you exclude the digital only banks. So let me run through what's available. I think that's a
13:46 Speaker 05 I mean, I was going to say, you've said, I don't know whether you call it a high bar or low bar for having your, you're saying your current, current account provider makes you smile. I mean, if they just don't make you cry, I'd
13:57 Martin Lewis? Yeah, well, no, no, let's, let's go absolutely mercenary. We'll, we'll talk arguably, and I think I'm pushing it a bit, the top bank bribe is £310.
14:07 Speaker 05 Right.
14:07 Martin Lewis? Right. So the question is quite simple. If I walked up to you today and said, I'll give you £310 if you switch away from your bank account, would you do it? So if you think of it in that someone is going to pay you as a job of work.
14:21 Speaker 05 Cash.
14:22 Martin Lewis? Well, this isn't cash, but we'll go, that's why I'm saying, and I'm going to explain in a moment.
14:26 Speaker 05 Okay.
14:26 Martin Lewis? But it's £190 is cash, £190 is cash. Would you do it? And that's the question. If your answer is no, then don't do it. And if your answer is yes, then
14:34 Speaker 05 But my instant reaction to that is, are you tied in in some way? What about, what about all your bills and stuff like that?
14:41 Martin Lewis? Okay, all right.
14:42 Speaker 05 Dimly thinking about credit rating or something, but anyway.
14:45 Martin Lewis? Credit rating we'll come to, because I know we've got questions on that. Let's just talk about what happens when you switch.
14:49 Speaker 05 Yeah.
14:50 Martin Lewis? Right? To get the free cash, you need to use their switching services. This is called a seven day switching service. Technically, it's a seven working day switching service, so it takes around 10 days. That's a better way to perceive it. When you do the switch, your old bank account is closed for you. All your standing orders and direct debits are automatically moved across for you. They do all of that for you. And from that point, any payments made to your old bank account are automatically forwarded to the new bank account, although gradually over the next year or so, I would make sure, and I'd especially tell your employer, that the new bank account details, but that shouldn't be a problem. Now, I did a poll this week across all my social media feeds to ask if people who've switched in the last few years, how easy or difficult did you find it? Of
15:31 Martin Lewis? the 5,500 who had switched, 90% said it was easy and hassle-free. You know, for people to talk about processes being easy and hassle-free, that's a high bar. 90%, nine in 10, didn't have an issue with this. The only minor thing I would warn that they don't do for you is if you have any recurring payments, also known as continuous payment authorities. That's where you've given the long number on your debit or credit card, often for a subscription, you know, the Netflix-type stuff, and it's just being taken each month. If you've done that on your debit card, that won't be moved automatically for you, so you would have to move that yourself. So, shall I do the deals? Go on. I'm not going to dot every I and cross every T. There are good websites out there
16:14 Martin Lewis? that list them, that you can go and read them. So, we'll start with the new one that predicated this, which is the TSB Spend and Save Account. It will give you £100 upfront cash. To do that, you've got to make five debit card payments and log into its app by the middle of July. So, make, you know, spend on your debit card. I mean, that's not very difficult for most people. Then, it will give you six months of £15 a month cash back, as long as you make 20 debit card payments in the month. So, people are using their debit cards all the time, it's easy. Or not, just split your shopping up into three piles if you have to, you know, but anyone who's paying for a bus, or paying for a train, or paying for a tube, will easily get to 20 in a month. That, so that's the main stuff. That's £190 if you qualify for that. What I think is interesting about TSB
16:57 Martin Lewis? compared to the others, is it's incentivising you to stick with it. Because then it says... In December, if you make 20 debit card payments, it will give you a choice of a £120 hotel voucher or 12 months UK activity tickets. So that's the, when I said, hmm, about the 3.10, it's not really 10. Now, the hotel vouchers for Expedia's travel credits website, there's no minimum spend. You know, so you could, it's same as Expedia, it's 120 quid on an Expedia is a better way to phrase it. The National Activities Network pass, I'm less keen because while it works, it's only usable for one person. And most people who would be doing this type of stuff is families. So it's not the greatest, it's 190 quid in cash and 120 pounds in hotel bookings or rewards if you want.
17:41 Martin Lewis? To get that, there's no minimum monthly pay in, which is pretty easy. With all of these, you normally need to move a direct debit or two, but you don't necessarily. So that's, that's the new one, right? Let's do the constant payer, although I don't know how long this will be around giving free cash. First Direct, First Direct, top rated for service, 92% rated great in my last poll. That's a very, very high rating. It gives you 175 pound cash upfront. If you switch over two or more direct debits and you make, put a thousand pounds in, don't have to put it in in one go, you've got to get the thousand pounds in within 45 days and make five debit card payments. So you can see what they're doing is they're saying you've got to use this as your main account. That's all those criteria mean, it's not harsh for most people.
18:23 Martin Lewis? It's also got, uh, his debit card is a perfect exchange rates abroad. It's got a 7% linked savings account, you can put up to 300 pounds a month in, and it gives an ongoing 0% 250 quid overdraft. So I'd call that the all-rounder package. TSB pays more, this all-round features. And then I won't go into too much detail, with NatWest Reward, you get a free 150 quid if you switch to it. And then it pays you five pounds a month, but you pay a two pound fee for that. So you're three pounds a month up an ongoing cash back. It's 36 quid a year, you do have to jump through some hoops to get that cash back. And then the Co-op Bank is also giving a free 175 pound cash at the moment. And both of those has linked regular savers. So you can see there's money available, there's a lot of upfront cash available for switching. And I think.
19:07 Martin Lewis? I won't go into any more detail than that because I suspect we've probably got questions on all that stuff.
19:11 Speaker 05 Okay, Tracy says she's with First Direct and thinks they're a great bank. And you don't hear that very often, do you? I wonder how many people switch away from First Direct?
19:20 Martin Lewis? I literally, when I was, when I was asking for questions, I saw quite a few messages saying, I won't switch because I'm with First Direct and they're great. It is 92% great. To put that in context, TSB in the same service poll was 38% great. NatWest was 54% great and the Co-op was 45% great.
19:37 Speaker 05 Where was Barclays? Ask them for a friend.
19:39 Martin Lewis? I will tell you after, I'll have to go and check on my list. I'll tell you after the break, but I have got it.
19:43 Speaker 05 Anyway, Tracy is in lovely, he's got First Direct, thinks they're a great bank. Wonders what's the point of being loyal when I can switch to another bank and make some money? Maybe banks should reward people for being loyal rather than getting customers transferring.
19:57 Martin Lewis? Well, arguably, it's not a bank, it's a building society. Nationwide does that. It tends, it's, gives customers who qualify, and not all customers qualify, a £100 loyalty payment each year. But you can't guarantee that. It's done it the last couple of years. We don't know whether it will do it next year. First Direct, I mean, First Direct, it's not for me to argue for them, but they would probably say, hold on, we give you a 250 quid overdraft. We give you a top overseas debit card. We give you a linked 7% savings account. The £175 is for switches to entice them in and we give you top customer service. That would be its argument. My argument is you have to decide how much that is worth it for you. Would you prefer the £190 from TSB? If you would go for TSB, if you wouldn't stick with First Direct? I'm not telling you what to do. I'm telling you what's available.
20:41 Speaker 05 Okay, Rose, I would do this, but I only have one current account other than my Monzo, which I've had for almost 20 years. I'm thinking it's better to keep that account open and it's good for my credit, which is excellent, she said. Or is it worth cutting my losses for the switch benefits? So what losses are there, are there losses to cut?
20:59 Martin Lewis? There is, there will be a short term impact on your credit worthiness, but it is a short term impact. There are two reasons. First of all, you're applying for a new credit because banks have an overdraft, most of them, so there's credit involved in that. And that's an application on your form. And secondly, banks like evidence of stability and longevity. So when you switch, it will have an impact on your, not that you have a credit score, we talked about that before, but it had an impact on your credit worthiness for probably three to six months. If you've got a great credit score, it's probably not going to stop you getting anything. The time I would not do this, if I was within three or four months from making a very important credit application. What's a very important credit application?
21:43 Martin Lewis? A mortgage application or a really important balance transfer to cut the cost of debt. That is not the time to be switching bank account. But if you're not using your credit score, you know, if you're just sitting there, you've got a credit score and you're just keeping it, then there's no point in protecting it for the next three or four months and you'll be back fine in five or six months, it'll be back up to where you were. So you may as well get the money.
22:03 Speaker 05 Okay. John, how long do I have to stay with the switched bank, the bank you've switched to? After you get the bonus before you can move again?
22:12 Martin Lewis? Once you got the bonus, the bonus is your money, you can move again. So that's pretty simple. Clearly, that's not what they're trying to do and some of them, that's why they have the ongoing rewards, which involve you having to pay in a certain amount. What I also think is interesting is it's probably worth me doing, how long you have to be out of a bank before you can get the bonus again?
22:36 Speaker 05 All right.
22:37 Martin Lewis? Because these are new customer switching deals. You have to be switching a bank from elsewhere. So let's just do it because this is interesting. TSB, to get the TSB bonus, you cannot have had a switch bonus from TSB since the first of October 2022, so about three years. But it's, you could be a customer, but you couldn't have the switch bonus. First Direct, you cannot have ever had any account with First Direct before and you cannot have opened an HSBC, its sister bank, current account since January 2018.
23:06 Speaker 05 That's interesting. I mean, I had a First Direct account about 15 years ago.
23:10 Martin Lewis? Yeah.
23:11 Speaker 05 So can't do it.
23:13 Martin Lewis? Uh-uh.
23:14 Speaker 05 They don't want me.
23:15 Martin Lewis? NatWest, you can't have ever received a switch bonus from NatWest, RBS or Ulster Bank, the sister banks, before. So you could have been a customer, but you can't have had a switch bonus Co-op, you can't have had a switch bonus from the Co-op Bank since the first of November 2022. So as you can see, what counts as a new customer and what counts for the criteria does depend heavily on the individual bank.
23:39 Speaker 05 Gertrude, what happens if you have an overdraft with your current account and want to switch? Do you have to ask for permission? Does the new bank take over your overdraft? Or do you have to pay it off?
23:48 Martin Lewis? You generally have to deal with paying the overdraft off yourself and moving it across, which is how it works. So First Direct, which gives, is the only 0% overdraft on the market at the moment, is giving a £250 ongoing overdraft. So it's a constant overdraft to most customers. Not everyone gets it, it's credit score depending. But if you apply to First Direct, you've got that overdraft, then it wouldn't pay off your old overdraft for you. You would have to do that manually, but you'd still have that facility available. Now, if we think about it, let's just imagine you've got a £400 overdraft at your old bank. Right? You're going to get £175 switching cash from First Direct. You could use that to reduce the amount at your old bank. And then what you've got left is £225 quid, which would be interest free if you put the money in from First Direct to your old bank.
24:32 Martin Lewis? So it can be very worthwhile. With overdrafts, it's very important, most banks, not all, have eligibility calculators on their website, which will show you before you apply whether you will get an overdraft with them. So if you're switching overdraft, then you can check in advance what overdraft you're going to get. The other alternative is you use a money transfer credit card. Now, this won't work if you've got a really big overdraft or a really bad credit score. But a money transfer credit card, we've talked before about balance transfer credit cards. A money transfer card is where you get a new card that pays money into your bank account for you. So you would then owe the money paid into your bank account at 0%. They're not long 0%, it's for about 10 or 12 months.
25:16 Martin Lewis? But you could use that before you did your bank switch to clear your overdraft. So it goes on a 0% card and is interest free. There's not many of them about. Go and look up online which one's suitable for you and use an eligibility calculator. Be very careful, it's not about you paying cash, it's about it paying into your bank account. It's called a money transfer, it's a specific type of credit card transaction. And then you would have your overdraft at 0% elsewhere. And then you could switch and get the benefits of the new account, even if you didn't have the overdraft.
25:42 Speaker 05 Okay, got it. By the way, one of our engineers paid for a weekend in Paris by switching accounts.
25:49 Martin Lewis? Well, there are regular switchers out there who follow the switches, who've made £1,200. They use a thing called a mule account, but we might get to come to that in more of the questions.
25:57 Speaker 05 The mule account, make a note of that.
26:00 Martin Lewis? We had a quick break on Five Live, which gave me time to look up for Adrian, who wanted to know what the customer service rating of Barclays was. So why don't I run through, I've got the list in front of me. Now, this was a poll we did in January of 12,300 people. It is a somewhat self-selecting poll, rather than a statistically relevant one, I need to be honest, but I'll just give you the percentages. Now, these are the percentages of greats. To be fair, banking does a lot better than most other sectors. It has a lot more greats and a lot fewer poor. So, and in the podcast, let's have the top 10 music on to this bit. So I'm going to do it for those listening on the radio without the music, but have it going in your head as I do it.
26:36 Speaker 05 Okay.
26:37 Martin Lewis? Okay, in bottom place, we have Barclays with 35% great, TSB 38% great, moving up, it's Virgin Money 43% great, above that, the Cooperative Bank, 45% great, HSBC 42% great, which should be perhaps below in the table, but the table averages have just, okay, I'm just, a quick interruption in the poll. I've just realised, we sorted the poll by weighting points for great, okay and poor.
27:02 Speaker 05 Yeah.
27:03 Martin Lewis? So HSBC is slightly ahead, because it's got a better okay rating than Cooperative and fewer poor. So I'm going to keep going. HSBC 42%, Bank of Scotland 43%, Halifax 48%, Lloyds 48% great, RBS 57%, NatWest 54%, Santander 62%, Chase 83%, Starling 85%, Nationwide 82%, Monzo 86% and First Direct 92% great. Hopefully you heard your bank in there.
27:34 Speaker 05 You'd be a great racing commentator, the way you
27:37 Martin Lewis? And they're coming up on the far side now, and it's First Direct starting to entertain. Monzo is coming up and Nationwide's coming on the far side, and who's going to win, who's going to win at the contest? And it's First Direct great!
27:47 Speaker 05 That's, that's probably worryingly good.
27:53 Martin Lewis? I interrupt this podcast for more of the podcast because you had more questions about bank switching that I didn't manage to get in with my hour with Adrian. So I've got podcast producer Simon with me now to ask me them and we'll get on to energy switching and the mastermind later. So Simon, what have you got for me on bank switching? Let's close this off.
28:11 Speaker 06 Yeah, so we got sent this one by James. How can you get the reward of switching if no direct debit's coming out of your account or have less than £1,200 going in a month?
28:20 Martin Lewis? First of all, most of the bank accounts I'm talking today don't actually have minimum monthly pay-ins. Let me just double check. TSB doesn't. First Direct just wants you to put £1,000 in. NatWest Reward, if you want the £36 a year cash back, it does have a £1,250 a month minimum pay-in. And Co-op doesn't have a monthly minimum pay-in. But anyway, what the monthly minimum pay-in is, it's a way of almost setting a minimum salary that you have to have to have, say, £1,250 going into the account. But there is a way to jemmy that. So let's say you earn £1,000 a month and the minimum pay-in is £1,250. All you do is you have your salary going in there, that's £1,000. Then at some point in the month, you take £250 out or you move it to another account. You have a savings
29:03 Martin Lewis? account, for example, and then the next day you move it back. Because it is, you have to pay in a total of £1,250 in the month. It doesn't have to come in one chunk. So as long as you're doing that, and many people do jemmy that in order to be able to get through that criteria. As for direct debits, again, not every bank account, the TSB doesn't require you to have two plus direct debits going across, but many of the others do. What I would do with that, and we use this trick when we do set up mule accounts, which I think there's another question coming on in a moment. If you need it, set up a direct debit. Sometimes there'll be a minimum, it might be a minimum £2. I mean, set up a direct debit to charity. Go and set up a direct debit to a couple of charities to pay £2 a month or £1 a month. They don't like it that much because it can be administrative
29:46 Martin Lewis? costs. Or choose someone else or go and find something that has a very low direct debit, just so you can keep the direct debit going. Or alternatively, if you're paying bills anywhere by direct debit, and for example, you don't have direct debits because you don't want to switch your main account because you're happy with that, well, just move a couple of small Have a couple of small bills coming out of this secondary account by direct debit. You know, your broadband, for example, your mobile phone, if it is set up by direct debit. And just have those two with this account, keep it mindful in order to get the bonus. What's next?
30:16 Speaker 06 Charlie, I want to use an abandoned account as my switcher.
30:19 Martin Lewis? So this is what I talk about in Mule account. People who switch bank accounts, right, I'll let you carry on with the question in a moment. People who switch bank accounts regularly, they effectively, they have their main bank account, but then they have a bank account set up just for the purpose of switching to get switch bonuses. This is for the regular switchers who are playing the system. It's a very different way of doing it to what I've been talking about, but you can make money from it. You've got to be diligent and know what you're doing. So the abandoned account, carry on with the question, yeah?
30:43 Speaker 06 Well, I think Charlie's wanting a sort of how to guide on how to do that. He's saying, is there a way around having to set up a direct debit standing order requirements that First Direct has? He doesn't want to switch his banking bills.
30:53 Martin Lewis? It's exactly what I've just talked about. You either have to take a couple of bills from your normal account and just have those attached to and linked to your Mule account so that when you move it, and the easy ones to manage would be a good choice. Or alternatively, you have a couple of direct debit set up for some very low subscription cost type service or giving to charity if they will allow the direct debit to be set up.
31:14 Speaker 06 Jenny asks, all the offers to swap accounts that I've seen saying you need to close the old account, are there anywhere I can keep the old account open even after all the direct debits have been transferred?
31:24 Martin Lewis? So the key point here is most accounts require you to use their seven day switching service, which automatically closes the old account and moves everything for you. So it is quite tough to get a switching deal. There is one at the moment, I'll come to in a second. But I would say if you don't use their switching service, then you will have to manually move all your direct debits and standing orders. They won't do it for you because they will still be with your old account. So in terms of, it's one or the other. Either they do everything for you and they close your old account, or alternatively, they don't do anything for you and you have to move any direct debits that you want. Now, the one account at the moment that is giving a start up bonus.
32:04 Martin Lewis? When you don't have to switch is the Santander Edge account. People remember at the beginning of the year, my New Year's resolution was to try and say Santander properly rather than Santander. It's mentally, I'm trying very hard, hopefully I'm doing it all right. Now, new and existing customers opening a Santander Edge account via various links available online can get a £30 Amazon voucher. Now, Santander Edge is my top pick for bills accounts and joint bills accounts. You pay a £3 monthly fee for it, but that's usually outweighed by the 1% cash back up to a maximum £10 a month you get on council tax, water, energy, broadband bills that you pay on it via direct debit.
32:44 Martin Lewis? It currently also gives 1% debit card cash back on supermarket fuel and travel spending, but that is being axed on the 8th of September. We've just learnt that this week, which quite a lot of people are annoyed about. The debit card also gives you near perfect exchange rates abroad. And the key to this is that you can open it without switching. So the link isn't available everywhere, you'll have to go and find where it is. It's the Santander Edge current account, you can get 30 quid. But no, the big bonus is they want you to be, you use them as your main bank account. So they want you to switch out of your old bank account. That's part of the incentive. That's what they're paying you to get, is they're paying you for your main custom. Why do they do that? Because your bank account is a building block to all of your finances. It has lots of data about you and they want to use it to cross sell you other products.
33:29 Martin Lewis? So they want your main bank account with them.
33:31 Speaker 06 Finally, we've got this one from Darren Martin. He's saying that you said to use an ATM abroad on Barclays Reward card. I thought taking money out on a credit card was a no-no.
33:40 Martin Lewis? Both of what you say are correct. So the Barclays Reward, this isn't about bank accounts, it's a totally separate subject, but let me answer anyway. The Barclays Reward is my current top pick overall card for spending overseas because it gives you near perfect exchange rate, has no ATM fees, and it gives you 0.25% cash back on your spending. So the cheapest way to spend abroad is to use the Barclays Reward card.
34:07 Martin Lewis? And you can also use it for cash withdrawals because it doesn't have an ATM fee. And it doesn't charge you interest if you pay off in full. Some credit cards, if you withdraw cash on them, will pay you interest even if you pay it off in full on the cash withdrawal. The Barclays Reward Card doesn't do that, so it's safe to use abroad. But you are right when I talk about credit scoring. Withdrawing cash on a credit card is seen as a bad sign in credit scoring and can put lenders off. However, just making a few small cash withdrawals on a card overseas is not the same as making regular cash withdrawals on a credit card, which is a sign of you've got credit problems. So it isn't too much of a problem. I would always choose the card to spend on it anyway because you get the rewards, you get the cash back on spending.
34:53 Martin Lewis? You don't get it on cash withdrawals rather than withdrawing cash. But if you're going abroad and you want a bit of cash in your pocket and you have that card. Let's say you get two, 300 quid out, always do it in a bigger transaction, just do it in one lump sum because that reduces the ATM fee. Taking two, 300 quid out once and then spending on the card for everything that you can spend on the card and just using that cash when you need it. So you don't have to withdraw a second time, isn't too big a deal. So you are right on both. I have said it's the cheapest way to spend abroad and the cheapest way to withdraw cash abroad. There are other cards that equal it for withdrawing cash abroad. But it also isn't generally good to withdraw cash on a credit card. But that's more generally that you're doing it all the time and you're doing it in the UK because it's a symbol of bad credit behaviour. Right, shall we get back to the show with Adrian?
35:37 Speaker 05 Let's do our tell-uses. What's the plural of?
35:41 Martin Lewis? Tell-I.
35:42 Speaker 05 Tell-I.
35:44 Martin Lewis? Got it. When have you saved a fortune by pure accident? For example, forgetting to cancel an insurance policy and then later realising you could claim on it. I've got Facebook, you've got X. I'll start with Tracy because it's a good one or a sad one as well. In Covid lockdown, when I had more spare time, I reviewed all our direct debits. There was one I couldn't work out what it was for. You were just talking to me about this in the break. Always got to Google it, folks, and find out what you're paying.
36:10 Speaker 05 That really annoys me because sometimes you know, we should not have to spend the time, it should just be clear.
36:15 Martin Lewis? Yeah, well, it's about the merchant code and everything going in anyway. It'll get better as open banking improves and the data improves. Some sort of insurance, but I couldn't think what. So I started making phone calls. It turns out it was pet insurance from more than from one of our dogs that had died over four years earlier. I'm sorry to hear that. I didn't recognise it because it was in the name of the underwriter on the bank statements. After some wrangling, they claimed I hadn't cancelled the policy, but I knew I had. They agreed to repay me on production of a death certificate from the vet. So it's probably included in the cover. It was over £3,000.
36:50 Speaker 05 Darlo changed jobs and due to lack of communication between my former and new employer, I was put on an emergency tax go. This was brought to attention a few years later. I was able to claim a rebate from HMRC, which amounted to thousands. Family holiday to Florida paid for.
37:07 Martin Lewis? Yes, although that is your money just coming back to you later, but I can understand why it's an improvement on cash flow. It's a bit like PPI payouts. Everyone's like, I wish I hadn't been mis-sold PPI. Well, no, you had the excess cash in the advance. I don't get this one. If anybody can explain this to me, I think I'm too young to understand this.
37:23 Speaker 05 Yeah.
37:23 Martin Lewis? Sammy, I was born three weeks early and because it was days before the end of the tax year, my parents received a few hundred pounds and bought their first colour TV with the cash. So we've got to be talking the 1970s there.
37:36 Speaker 05 Yeah.
37:37 Martin Lewis? What would the few hundred pounds of payments be? I can't quite work it out. I must be missing something.
37:42 Speaker 05 Right, okay. I'm not sure. If you can clarify matters there.
37:46 Martin Lewis? Yes, but someone in the Five Live ecosphere listening right now, get in touch, text us, email, you know, think it really heavily and Adrian's got that ESP, you'll get it. And with the magic of podcasting, we did actually get an answer to that. So I'm going to give you the answer straight away and move it from later in the programme where it originally came.
38:05 Speaker 05 I've got an explanation on that kids' tax rebate thing. You'll like this.
38:09 Martin Lewis? Oh, yeah, go on.
38:09 Speaker 05 It's from Kate in Altria, who says, rare I know something that Martin doesn't. I've never experienced that feeling, Kate. You must tell me what it feels like. But anyway, explanation of the 1970s tax rebate for children. I'm fully aware, as I was born on the 5th of April at five minutes to midnight, and the midwife was motivating my mum, saying, think of the money. Because at that time, you had a tax allowance based on how many children you had. If you had another child in that tax year, you were eligible for that tax allowance amount for the whole tax year. So the later in the tax year you had the child, the bigger the rebate.
38:44 Martin Lewis? How fantastic.
38:45 Speaker 05 My parents got the full year's allowance paid out to them, like your other tax, so they used the money to buy their first color telly.
38:50 Martin Lewis? Oh, you see, another, well, we don't have that anymore. I didn't know about that. Fascinating. Thank you so much. I have just been been to school and I love it.
38:59 Speaker 05 On a family holiday to France, Danny accidentally booked a cabin for the return crossing. It was a terrible crossing. Everyone was being sick. He was glad of the cabin. I mean, that's a that's a benefit through your own incompetence.
39:10 Martin Lewis? Exactly.
39:10 Speaker 05 Something good happened.
39:11 Martin Lewis? Susan, and this is about her husband's incompetence. When I met my husband, somebody else had set up his car insurance to auto renew. He wasn't aware of this and was also paying yearly by card, so double paying. This was AA insurance. When we started to living together, I noticed this when I started looking at the family finances. I spoke to the AA and he was refunded over a thousand pounds. Needless to say, fifteen years later, he stayed with me.
39:35 Speaker 05 Mm hmm. And in twenty twenty one, I accidentally fixed my energy bill for twenty four instead of twelve months. Cue energy crisis completely unaffected.
39:46 Martin Lewis? Yeah, yeah, I mean, ding ding, winner winner chicken dinner.
39:49 Speaker 05 I made a terrible mistake once. Well, not a terrible mistake, but it really worked out for the best. Very briefly, I've got some friends in in Croatia who asked me to find them a book called The Art of Selling. And I tracked it down, bought it. This was twenty years ago. Bought it, took it to Zagreb.
40:06 Martin Lewis? Bought it for four hundred quid, the guy at the store.
40:08 Speaker 05 No, no, but it was, look, I tracked this book down, The Art of Selling, got it, triumphantly put it on the dining table in Zagreb. And they didn't want that book. They wanted The Art of Sailing.
40:19 Martin Lewis? Oh, no.
40:20 Speaker 05 However, they started flicking through this art of selling. I thought this could do well. And it changed their lives really because they translated it into Croatian and did and, you know, and made a little business which followed on from that.
40:34 Martin Lewis? Oh, well done. Yeah.
40:35 Speaker 05 All to do with my incompetence benefiting others, destroying myself but benefiting.
40:39 Martin Lewis? Adrian, your incompetence has made this show what it is. I thank you for it.
40:46 Martin Lewis? I'll read one more. Yeah, go on. I'll read one more. Evie, a few years ago, I'd asked to cancel a pet insurance policy when the renewal came around as they were increasing it by too much and they kept taking the money each month. The dog slipped a disc in her spine, leading to major surgery costing us over six grand, which the pet insurance company pays as they'd continued to be charging us each month. We didn't remind them, we'd actually asked them not to renew it a few months later.
41:13 Martin Lewis? We're going to move on to energy bills now because tomorrow is a crucially important date. Ofgem, the regulator, at about seven o'clock in the morning, will announce the new Ofgem energy price cap for the first of July.
41:29 Martin Lewis? And the predictions are, and at this point in the calendar, the predictions are pretty robust because the assessment period is now closed. The predictions are it is going to announce a drop of between six and eight percent on the energy price cap. The energy price cap dictates the price that anyone on a firm's standard tariff pays. Now, firms can go lower than the energy price cap, it is called a cap, but in reality, almost all of them set to exactly the price of the cap. So we're going to see a drop, but let's not get too excited about it because you have to look at what the run-up has happened. Remember, the price cap moves every three months. Last October, we saw a 10% rise. In January, we saw a 1% rise on top of that.
42:13 Martin Lewis? In April, we saw a 6% rise on top of that. So a reduction of six to eight percent now will put us back to somewhere around roughly the January price cap level. We will not be going back to the cheap rates that we had last summer. We're still going to be far above where we were last summer. Now, I know many of you always say, yeah, what I want to know is what are the standing charges and unit rate's going to be? We just don't know that. And until it's announced on Friday morning, and some of you might be listening to the podcast after this, in which case, I'm planning to put a mini podcast extra out with just an update of exactly what's happened. But if you're listening before, I would suspect most of the cut will be on the unit rate because when it went up, most of the
42:55 Martin Lewis? The rise was on the unit rate and standing charges will say roughly the same, but I don't know. If that were to happen, that would mean there would effectively be a bigger saving for those who were higher users than were lower users. The big question though, is you have to look at the market. Now, while the energy price cap is dropping six to eight percent, somewhere around there, I mean, it might be five to nine percent, but you can get the ballpark of what it's going to be. If you look at the cheapest fixes on the market at the moment, they are eighteen percent below the current price cap. The price cap is going to drop six to eight percent, but they're already eighteen percent below it, which means they're roughly ten percent cheaper than where the price will be in July.
43:37 Martin Lewis? But if you were to switch earlier on to the cheapest fix, you would get the eighteen percent saving now. And I've just done an interesting piece of work that I'm going to put out on social media, may well have already put it out on social media by the time you watch this, because I'm planning to do it on the Thursday, which is a graph showing that at every point in the last year, you would have saved by being on the cheapest one-year fix than compared to being on the price cap. And I strongly think at the moment, as long as you're going for the cheapest fixes, getting the cheapest fix right now is very likely to undercut being on the price cap. If we go forward on the price cap, I'm telling you, a drop of six to eight percent in July, that's pretty locked in. The further out you go, the more crystal ball gazing it is. But I'm going to try and give you an idea.
44:21 Martin Lewis? So let me try and paint you a graph of what's going to happen in future. Now, I prefer to talk in percentages because the percentage move is far more important. But to try and help you understand this, I'm going to use a figure I rarely use, which is the typical use figure by Ofgem. I'm going to give you the price that someone paying typical use would pay on the price cap as it moves. Now, currently on typical use, you're paying one thousand eight hundred and fifty pounds a year. In July, the prediction range is a drop of between 6 and 8%, which would take you down to between £1,700 and £1,733 a year. So a drop, if that rate were to continue
45:00 Martin Lewis? over a year, of around £110. Then in October, the range of predictions is between going up at that point by 0.3% to down 4%, which then means on typical use, the price varies between £1,662, remember it's £1,849 at the moment, and £1,705. In January, the prediction is currently very little change. It's between minus and plus half a percent. And then the following April, those who do predict, most are predicting it's going to go up again by about 4%. Now, if I were to summarise that for you, if you found it complicated, basically, it might drop a tiny bit in October, but the current predictions are it's going to stay roughly stable after that. Now, remember, the cheapest fixes are
45:45 Martin Lewis? 18% below, which on typical use is a price of around £1,520. So if the predictions are right, at no point over the next year will you get anywhere close to a price as low as the cheapest fixes are available for right now.
46:02 Speaker 05 We do have Margaret from Chesterley Street.
46:04 Martin Lewis? Okay.
46:04 Speaker 05 Who's got a question on this. Margaret, how the devil are you? What's your question for Martin? Hi there. Hello, Martin and Adrian.
46:11 Martin Lewis? Hello.
46:12 Speaker 05 My question is this. I have a dual fuel fixed contract, which is due to end on the 25th of August. Now, with the 49-day rule, I know I pay no exit fees from the 7th of July. So I've had a look on a price comparison site, and I can get a deal saving me approximately £120 a year.
46:35 Martin Lewis? Compared to what you're paying now, or compared to the price cap?
46:39 Speaker 05 Compared to what I'm paying now.
46:41 Martin Lewis? Okay.
46:42 Speaker 05 Should I take that or the nearest deal available at or around the 7th of July? Or is...
46:50 Martin Lewis? Is it liable to be worth my while to wait until near the twenty fifth of August when my contract actually expires? Your question is, when do I fix? Not should I fix? Yes. In in a sense, well, I think you're right to wait until July, but there is a risk in doing that. It's important to understand that people often confuse the price cap movements with the movement at which you can get a new fixed rate. The price cap is set retrospectively. July's price cap is based on the three months to this week. March, April and May's wholesale rates are what dictate the price cap in July. So it's looking backwards.
47:33 Martin Lewis? The rate you can get a fix at is what energy firms can buy wholesale rates at the moment they're launching the fix. So the fixes available now are looking at today's prices. And of course, the reason the price cap's going down in July because prices have dropped right now. If something happens to put them back up in July, you will be paying more on the fix. Even though the price cap's coming down in July, that doesn't mean fixes will get cheaper in July. They could be getting more expensive because that's based on wholesale markets. Now, we don't currently have an idea of whether they'll get cheaper. You know, if there were peace in Ukraine, if something happened in the Middle East, all of that can impact what's going on. But I think probably the seventh of July, you're okay to hold it's not worth paying your exit penalties yet. As for whether you wait or not, my answer to that, I can give you a firm answer on that.
48:18 Martin Lewis? What do you think it is? God, what do you reckon? Yes. I think you should do it. I'm quite risk averse. So my inclination is to take this or a similar deal to the one advertised now, saving me a hundred and twenty and take that on the first day I'm able to, which I calculate to be the seventh of July. Well, I think, yes. Because I understand. You've got the forty nine day rule. Quite correct. Yes, because in that period, I don't pay.
48:46 Speaker 05 A fee to end my contract early.
48:49 Martin Lewis? Correct, you don't pay early exit penalties within the last 50 days of your fix, which is day 49 and onward. You've done that brilliantly. So few people know that. Big plaudits for knowing that because that's exactly the right way to calculate it. So let's just go on this. So on the 7th of July. Now, the first question, what are your early exit penalties if you were to do it now? I mean, if there were 10 quid now.
49:11 Speaker 05 Fifty pounds for each of the gas and electricity.
49:14 Martin Lewis? Yeah, well, it's not worth it then. It's not worth it for that period. You're right. So I agree with you. On the 7th of July, the big thing, the most important point for me is that the fix that you can get on the 7th of July is cheaper than the fix that you are on right now. So the benefit that you would get, you get an extra month of cheaper fix if you fix on the 7th of July, and that will probably outweigh the variance that we may have in the price that goes on until August. If you run a cheaper fix right now, should I get a more expensive fix so I can lock it in for another year? I'd be saying no. So I think your logic is quite right. You're doing exactly the right thing. On the 7th of July, assuming that's the right date, go and do your fix then and hopefully it'll still be cheap.
49:55 Speaker 05 Thank you. Thank you. That's decision made. Okay.
49:59 Martin Lewis? I can't promise to be right, but balance of risk, I'd say it's the best.
50:02 Speaker 05 I can promise Margaret is more across it than I am. That's the main thing. So Margaret from Chestilla Street, thank you for that. Joanne, is there any indication yet of a social tariff for energy consumption?
50:12 Martin Lewis? No, I mean, I've campaigned for a social tariff for years. It's all gone very quiet. There's no major party talking about bringing in a social tariff. I hope that will change. What is hopefully coming is a new lower standing charge alternative price cap. So firms will offer two price caps, a normal price cap and a lower standing charge price cap. I hope we will see that by winter. Ofgem is still working on it. We might even get an update on it tomorrow. But now I think it's time to play the music.
50:43 Speaker 05 It's so tragic. I always turn over a new page in my notebook because I mean business. And then I just do a load of doodles.
50:49 Martin Lewis? So in this three option, multiple choice money mastermind, Adrian has got nine right and 16 wrong. You are still just running ahead of beating, you know, someone choosing the options by where the snot drips out of the nose on the three of them. So the way you play is as beautiful as that analogy, I think. So here you go. Oh, I've just been handed a note by the producers, Adrian. Apparently in the Ria of the Year awards, we have been picked in a new talk show pairs category. How very, sorry, sorry, I've just misread that. It's the years talking out of your Ria pairs award. But there's a two grand prize.
51:32 Martin Lewis? So there's something. Now, clearly to fit the spirit of the show, we're going to need to save this and we're getting a thousand pounds each. So there is an account online which lists its interest as 4.52% annual interest and 4.43% monthly interest. If you put a thousand pounds in and select annual interest to be paid into the account, and I do exactly the same, but the only difference being I pick monthly interest, at the end of the year, who will have more money in the account? So there's 4.52% annual, which is you. There's 4.43% monthly, which is me. We don't take any money out of the account
52:16 Martin Lewis? for the year. Who will have more money in at the end? A, me on monthly interest, B, you on annual interest, or C, we'll both have the same amount?
52:28 Speaker 05 Oh God, I don't, I don't like this because I'm, well, I don't see, can I just show my work in 4.52% on a thousand pounds paid into my account?
52:43 Speaker 05 As an annually, so at the end of the year, I'll have four, I'll have a thousand, four point five two percent. That which is what.
52:52 Martin Lewis? One thousand and forty five pounds twenty p.
52:55 Speaker 05 If it's paid in monthly, is it paid in every month over the.
52:59 Martin Lewis? It it's called monthly interest.
53:01 Speaker 05 Yeah.
53:01 Martin Lewis? One is annual interest, one is monthly interest, that's what it's called.
53:03 Speaker 05 So that, but that's where, that refers to when it's paid in.
53:06 Martin Lewis? That, no, it's paid out, when the interest is paid out, you, we both put the thousand pounds in at the same time. With annual interest, you get the interest added at the end of the year.
53:14 Speaker 05 Yeah.
53:14 Martin Lewis? With monthly interest, the interest is added each month.
53:18 Speaker 05 Okay, um, well, if it's added each month, then.
53:22 Martin Lewis? And it's the same account.
53:23 Speaker 05 It's the same account, so it's.
53:27 Speaker 05 Well, I'm gonna, even though I know it's wrong, I'm gonna say I have more, but I can't work out, I don't know why that's wrong.
53:33 Martin Lewis? Because you've got a higher interest rate, four point five two to four point four three.
53:35 Speaker 05 Yeah, well, so that's put all put in at the end of the year, your monthly interest must be four, what is it?
53:44 Martin Lewis? Four point four three.
53:44 Speaker 05 Yeah, four point four three, so that is one, that is forty four pounds, isn't it, or something on the.
53:51 Martin Lewis? Yeah, forty four pound thirty.
53:53 Speaker 05 Forty four pound thirty, so presumably that's divided by twelve. Forty four pounds, that is divided by twelve and paid in every month, unless you, unless you're making money.
54:04 Martin Lewis? What's your answer?
54:05 Speaker 05 Um, I think it's you, I think it's you, because it's something to do with that.
54:10 Martin Lewis? So you go for A.
54:11 Speaker 05 But you're paying interest on pay, yeah, I'm gonna go monthly.
54:14 Martin Lewis? Okay, now, often when you get interest these days, you'll see the AER, which factors everything in. But when you're looking at annual and monthly, they don't give you a gross rate, and it's the gross rates that I was quoting to you. Five two percent annual gross, four point four three percent monthly gross. The key to this question, and you didn't pick up on it, was the phrase, interest is paid in your account and we don't take any out. Now, the reason for the difference here is because if you are pay, pay, have a thousand pounds in and you want the monthly interest and you're paid the interest each month and you take that interest out.
54:48 Speaker 05 Yeah.
54:48 Martin Lewis? Which is because you've been paid it monthly, that's the point you do it, to take the interest out. Then that interest doesn't compound, you don't get interest on the interest. But if you don't take it out, then the four point, the, the interest is compounding. And actually, the answer is C, the same. At the end of the year, you have the same amount. The difference in interest rates on the growth interest is a technical, not a real difference. The annual rate includes full compound interest for the year. The monthly rate by law has to assume you withdraw the interest that you're paid each month. So therefore it's not counting the interest on the interest count, compounding. But if you didn't withdraw it and you keep it in the account, it would compound and you'd
55:31 Martin Lewis? get exactly the same amount at the end of the year. And lots of people ask me, I'm telling me I'm going to take annual because it pays more interest and it doesn't pay more interest. It's just a technical difference in the way it's accounted because they assume that if you're paid monthly, you take the interest out each month. Nine right, 17 wrong.
55:47 Speaker 05 Oh dear. But if I'm helping to, helping to inform and entertain.
55:52 Martin Lewis? Exactly.
55:52 Speaker 05 The contrary, at my own expense.
55:54 Martin Lewis? You're losing is rethun in its value, Adrian. Just a little aside here, when we're talking about annual or monthly interest, that is only about when it is paid. These days, almost all accounts calculate your interest daily. So the fact it is paid monthly or annually doesn't affect the way it's calculated. You still get paid interest for each day you have money in the account.
56:23 Martin Lewis? And we had one more quick energy question that we didn't get to. What is it, Simon?
56:27 Speaker 06 Yeah, Jo got in touch. She says, our fixed priced energy tariff ends mid-June. Is it better to fix again now or wait until after July the first?
56:36 Martin Lewis? Well, this follows on from what we had with the caller earlier. You are already within the 49 day period, so there are no early exit penalties for you switching. The most important thing to remember is the first of July is an irrelevant date for fixing. Does not alter the price of fixing. That only alters the price cap for people on standard charges. The rate fixes are set at, is based solely on what firms can buy wholesale energy rates at the time. Yes, there might be some slight competitive moves because the price cap's getting cheaper, so they might feel they need. To set it a tiny bit cheaper than they would otherwise, just to give a bit of competitive advantage when people do a price comparison. But there's no point in waiting. If you can fix now with no early exit penalties at a cheaper rate than you are currently paying, I would do so.
57:21 Martin Lewis? If you can't, I would wait until your current fix ends. And one final important note, for anyone doing a comparison, make sure you go to a whole of market comparison site, or at least if it's not whole of market, you select to see all tariffs. Most sites, not all of them, there are some good ones out there, you can work out one of them. Most sites will hide tariffs that don't pay them. But when you are doing a comparison from tomorrow onwards, remember the saving you will be shown is compared to the current price cap, not the July price cap. So the actual saving you will get is going to be lower than comparison sites are showing from tomorrow, because until firms publish their new tariffs for January, comparison sites
58:03 Martin Lewis? will continue to list the current price cap rate, not the July price cap rate. Just worth knowing that little technicality if you are going to do a comparison.
58:15 Martin Lewis? And just one quick tip for you this week, because I think it's quite a good deal. It's a year's ad-free Disney Plus for £50 rather than the normal £90, and you also get free Uber Eats delivery. Now, I've deliberately phrased it the wrong way around, because that isn't the offer, but I think that is actually the better offer. Uber has its Uber One deal, that you pay £50 a year for the subscription to it. And the whole point of it is it's meant to give you free Uber Eats delivery, and also can give you some discounts if you're using the Uber minicab type system. But if you sign up to Uber One, then you get 12 months of free Disney Plus, and Disney Plus would normally cost you 90 quid. So effectively, if you want to get a year's Disney Plus, the best way to sign up for
59:00 Martin Lewis? a year's Disney Plus is not to sign up for Disney Plus, it's to sign up for Uber One, even if you don't want Uber One, because that costs 50 quid, and you get a year's Disney Plus by doing it. I hope you got that.
59:14 Martin Lewis? Okay, so why don't we finish off with a few more of our tellers? Stories of when people have saved a fortune by pure accident. I've got one from Alison, who says, "About 12 years ago, we got a letter about mis-sold payment protection insurance. We'd seen this on MLMS, which is the Martin Lewis Money Show, my TV show. By the way, if you happen to be voting for the NTA long lists at the moment, do have a look in the Best Presenter and the Best Factual Entertainment Programme sections. I won't say any more, but if you happen to have a look there, make sure you're looking at all the options in there." Anyway, "But assumed, because we'd claimed on it, that we couldn't claim it had been mis-sold. Filled in the form and got £13,000 back. Then looked at another company's PPI, again that we'd claimed on, put in a claim and got £17,000 back." Wow, 30 grand.
59:59 Martin Lewis? What have you got, Simon?
1:00:00 Speaker 06 We've got, so one from Joanne. "My daughter purchased a ticket on behalf of my husband for Strictly Live Tour many years ago. She forgot to uncheck the insurance needed box, so ended up paying for the insurance. But the following February, they couldn't actually get to the gig as the weather was so bad, deep snow and ice, and then were able to claim."
1:00:17 Martin Lewis? Nice. Those tick boxes that are drive people nuts occasionally, it might work for you. Angela, "In 1989, I opted out of SERPs for a period of time with Prudential, as recommended by the man who used to knock on the door. In 2019, thinking it was a con, I started to look into being mis-sold the pension, only to find out I have nearly £50,000 sat in there that I can now access." That's actually really interesting, because when we were talking about topping up the state pension, you know, doing it before the 6th of April, I know many people are still waiting for their callback, they are getting through the backlog, they're prioritising the people who are near a state pension age. Many people said to me, "What about if I was on SERPs? What about if I opted out?" And the most important thing to do is, before you look at getting frustrated by that, check
1:01:00 Martin Lewis? where that money went and do you have it sitting in a pension somewhere? It could be, like Angela, very lucrative, you might have 50 grand. Have you got another?
1:01:07 Speaker 06 Yeah, Anne says, "Actually, it's another one of your tips regarding student loans. She did a quick cheque and it turned out she'd still been paying 12 months after it'd been fully paid off. She got £1,200 back."
1:01:18 Martin Lewis? Yeah, nice. Joe, "Ages ago, newly married, needed tumble dryer for uniforms, couldn't afford one, was going to go down the higher purchase route. The electricity showroom had marked down a tumble dryer by over £300 because it had a large black mark down the front, selling for 50 quid. I couldn't give..." Anything, I'm changing the phrasing, about the black mark. I just needed to be able to dry my uniforms in all weather. Duly delivered, I got out soap and a sponge and removed all of the black mark. Result. I like your story, Joe. I'm not sure that's a saving by accident. I think that is a deliberate saving. So I like your story, but it gets an uh-uh from me on saving by accident. And I think with me being cruel to poor Joe at the end, that seems a good way to end this podcast.
1:02:04 Martin Lewis? That's it for this week. If you've enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. And do subscribe then hopefully your pockets will be pleased with you. We tend to put out a new podcast every Thursday. And if you haven't enjoyed it, but for some reason are still listening.
1:02:39 Speaker 03 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.
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