Is it time to ditch your Premium Bonds? | Free Wills | How to lend to friends & family

Martin asks a big question: is it finally time to ditch Premium Bonds? They’re the UK’s most popular single form of savings, with more than £136 billion invested. The prizes are tax-free, they’re backed by the Government, and there’s always the dream of winning big. But despite all that, Martin explains why Premium Bonds are often held by the wrong people. He’ll break down exactly who they work well for, who could do better elsewhere, what the alternatives are, and how to check whether you’re one of the lucky savers owed a share of more than £100 million in unclaimed prizes. In this week’s Tell Us, Martin tackles a financial dilemma that can test even the strongest relationships: lending money to family and friends. Have you done it? Did you charge interest? Did it all work out, or end in disaster? Martin shares listeners’ stories and reveals his top tips on how to lend money in a way that protects both your finances and your relationships. Plus, this week’s Mastermind sees Adrian put his knowledge to the test on what happens to your money when you die. Whether he gets the answers right or not, Martin will explain the key rules everyone should know, including why now is the perfect time to sort out an up-to-date will. With three free or low-cost charity will-writing schemes currently available, Martin explains how you can get your affairs in order and make life much easier for the people you leave behind. And there’s also a chat with Adrian Chiles about a very modern public-transport dilemma: what should you do when someone starts blasting audio from their speakerphone for the whole carriage to hear? Adrian gets Martin to recount the time he decided to confront a fellow passenger, and whether it was a triumph of public etiquette or a journey he came to regret. 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 what he likes in his full English breakfast, what his thermostat’s set to, or you have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

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

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• 1:47Martin Lewis?

  Today is a great day to do a comparison. You have a 30% chance of winning more than a savings account. It is so much better and not in the same category. Is it really a loan, or is it a gift you hope might be repaid? I'm about to reveal something that they never tell you here, Adrian. 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. And this is our big topic episode, where each week we lead on one main subject to help you save. Usually much of it comes from my BBC Radio 5 live show with Adrian Chiles, but there's also bonus money-saving tips and tricks for you lucky, lucky podcast listeners. In today's episode, is it time for you to ditch premium bonds?

• 2:32Martin Lewis?

  They're the UK's most popular single form of savings with over £136 billion held in them. The prize is a tax-free, it's a government-backed financial institution. All sounds good, but the irony is, it's often the wrong people who have them. So I'm going to go through who they're good for, who they're bad for, the alternatives, and how to check if you're due part of the over £100 million in unclaimed prizes. Then the tellers. Have you lent money to family or friends? Did you charge interest and how did it go? I'll also give you my top tips if you're going to do it, on how to do it most effectively. And this week's Money Mastermind is all about what happens to your money when you die.

• 3:13Martin Lewis?

  We'll see if Adrian gets it right, but regardless, I'll run through why, if you haven't got an up-to-date will. This is the moment, as there are three free, it's not easy to say, three free or cheap will charity schemes on now. Play the theme tune.

• 3:37Speaker 03

  Let's start by having a little rant about something not to do with finance or money really, but just something which drives me nuts, and I read this week has driven you nuts as well. Go on, talk us through it. This is an absence of headphones on a train.

• 3:55Martin Lewis?

  So yeah, it's funny, I did this post on Sunday. I was on a short train journey with Lara and Safa, my wife and daughter, and we had sat in a train cubicle and I did this post, I have to say, Adrian, a little bit frustration from me. I did this post explaining what happened. It is literally the biggest post I have ever done on social media. I spend my life providing useful information and usable information, but this one, on Facebook alone, had 11 million people viewing it. It's just off the charts. So basically, it was a packed train and we'd got on, and as I got on, I'd noticed some people moving. They'd started moving and then we sat down. We wanted a seat with the table because we were there as a family.

• 4:36Martin Lewis?

  And across us, over the other aisle, was a couple who seemed to be alternatively playing their social media videos on full volume. Now, I had assumed, once the train gets going, they would stop. It was nothing like that. They didn't. It kept playing at full volume. I was getting a little bit frustrated, but trying to carry on, I was just catching up on a bit of work because we were waiting to go. I'm not going to try and identify these people or tell you where I was going, because it's not about the individual. After about 20 minutes of this, the woman's phone, she started playing something about serial killers and how serial killers kill, which was the final straw for me. And I leant across and I said, excuse me, and I did it very politely. Would you be able to turn the volume down? That content is inappropriate for my daughter.

• 5:21Martin Lewis?

  To which she said, but it's a documentary, because you know, that makes a difference when you're talking about how you kill people. The fact it's real is just so much better for a 13-year-old. And I said to her, well, that isn't your call. I'd like you to turn it down. And in general, it would be better if you turned the volume down all, because it really is quite disturbing. To which point her response was, it's a public train, for heaven's sake. And I said, well, yes, and that's why I'm asking you to turn the volume down. And maybe you could use headphones, to which she gave a big sigh and rolled her eyes. She did turn the volume down, though. We left it there. She did creep it up slightly as we got nearer to our destination, but that was the point. Now, I put it out there, I have never seen such a uniformity of opinion.

• 6:02Martin Lewis?

  I must have had about 40,000 responses in total across my social media platforms. I think I only saw three that were supportive of keeping the volume up, and many people saying I was way too polite and they would have been more aggressive. I mean, lots of people also asked, did she recognise me? She didn't. Some people do, some people don't. And it makes it more difficult to intervene when you're a known person, because you know, you always think it's how it's going to go. So that was what happened.

• 6:26Speaker 03

  I had, well, I didn't have a response that big, but I wrote about this in The Guardian. And it struck me then that, like you, everybody agrees it's a terrible thing. And it's objectively antisocial, whether it's about serial killers or what, it's just antisocial. So, and yet, everyone agrees that, and yet, you literally can't get on public transport now without somebody doing it.

• 6:50Martin Lewis?

  No, and I think it's interesting. I think, you know.

• 6:51Speaker 03

  But why is that?

• 6:52Martin Lewis?

  You can arguably forgive children, someone playing it for a child under three who can't put headphones in. You can forgive someone maybe doing a 30-second clip because they don't have headphones to see. But it was the long, sustained, continuous use of it. But I go back, this lady's argument was, it's a public train, for heaven's sake. So for some reason, her logic, and the reason I did the post was to check whether I was out of kilter or she was. Her logic was, it is a public place, you cannot tell me what to do, I am playing a loud sound in public. And some people say, well, it'd be the same if someone was sitting opposite. It wouldn't, it's different. It feels it's the tinny driving noise and consistency of those social media videos. I don't know, maybe the next stage in this, maybe we should ask, I'm sure Five Live will allow anonymity.

• 7:37Martin Lewis?

  If someone out there does this, if you do this, why do you do it? Is it because you disagree and you think it is socially acceptable? Or is it another reason? I'm sure there'll be some people there who have hearing issues, who it's necessary for, and some with young children. But let's exclude those narrow ranges. I mean, don't ask me, if you do it, why do you do it? Or you just think, yeah, it's not socially acceptable, but who cares? I'll do it anyway.

• 8:00Speaker 03

  I mean, I had an idea of starting a charity where the likes of you and I go round. Every time we get on public transport, we have a pocketful of free headphones to give to anybody.

• 8:13Martin Lewis?

  So the two, the comments that stuck out to me on this was, one is a woman who carries old, cheap headphones, and she says, what she does is she just offers them and says, would you like these? Which I thought was really good, but just, let's just put this in context. It is a relatively trivial issue, though incredibly frustrating. One of the messages I read was from a woman who was travelling with her three-year-old child on the bus, and nobody had said anything, so she eventually turned around to tell the man who was sitting two rows behind her, pleased to turn down the hardcore pornography he was playing loudly on the bus. I mean, if society's got to the idea that someone thinks that's an acceptable form of behaviour in a public environment with children about, then we really do have a problem.

• 9:00Speaker 03

  Right, it's nice to be in full agreement with you on something, Martin. Let's see what text comes in.

• 9:05Martin Lewis?

  We're always in agreement. What does that mean?

• 9:07Speaker 03

  Well, I mean, sometimes I pretend to agree with you, just for the quiet life. On this, I feel it to my very core.

• 9:12Martin Lewis?

  I think that's a very sensible move.

• 9:16Speaker 03

  Energy then. We had an announcement in the conference speech, didn't we, about VAT? And it's...

• 9:22Martin Lewis?

  Well, the VAT, so, yeah. This is, I don't want to go large on energy because we do a lot on it. And actually, I should say, next week, I'm hoping we will have the Consumer Minister for Energy on the podcast, taking your questions. If you have questions for her about why energy works the way it does, then please email [email protected]. And it would be good to get those questions in. My warning today is today is Energy Price Change Day. Now, it's price change in two different ways. If you are on a standard tariff that is price capped, your price is going up by 3.6% because it's the first of October and it moves every three months. And this is one of those three months nodes. If you are on a fix or a special deal, electricity VAT has been scrapped for six months from today.

• 10:08Martin Lewis?

  So the amount you pay for electricity will be dropping 4.8%. I should note, it's being scrapped for the price cap too, but it's still going up 3.6%. It would have gone up 6.2% without the scrapping of electricity. So as you can see, everybody's price is changing today. What you pay is changing. And when you have a price change day, the sensible thing to do is today or tomorrow or the day after, if you are paid by monthly direct debit and you do not have a working smart meter, is just to submit a meter reading now. That way, regardless of which way the price is moving, you have drawn a line saying, I used this much before and all my usage afterwards is at a different price. So that they can't over assume you were using more in the higher rate period, whichever

• 10:53Martin Lewis?

  one that is, whether that's the one you've come from or the one that you are going to. And while we're on energy, I should mention, today is a great day to do a comparison. If you are on a standard tariff, a do nothing tariff, a I haven't fixed tariff, so that you're on the price cap. Because the price cap has gone up and fixes have got cheaper because of the electricity VAT. You can currently get a fix for 4% less than the October price cap. And the predictions are the January price cap will be going up around 20%. So if you haven't gone on to a whole of market by default comparison site yet, done a comparison to find a cheap fix for you, this is a good day to do it.

• 11:31Speaker 03

  Shall we move on to premium bonds then?

• 11:33Martin Lewis?

  Indeed, yes.

• 11:34Speaker 03

  Run us through the, run us through the basics. And I like it when you do that thing about the difference between, we do different ways of calculating the average, yes.

• 11:44Martin Lewis?

  We're going to do that. I'm going to come to that, I think, when we get the questions and explain whether it's worth it or not. We're just going to go through the very simplicity. Premium bonds are the UK's biggest single savings account. There is 136 billion pounds in them, 136,000 million pounds in premium bonds. And you can buy currently, you need about a minimum of 25 pounds in, a maximum of 50,000 pounds in. Now, it's important you hear me say these are savings. This is not an investment. This is not an investment class. It's savings because it has deposit protection. That means when you put your money in, you are guaranteed to get back at least what you put in.

• 12:27Martin Lewis?

  With investment, the hope is you invest over the long term for it to grow faster, but the fact is you could risk some of your capital. But the difference between premium bonds and other savings is the amount of interest you get is dictated by a prize draw. Prizes range from 25 pounds up to a million pounds. Now, a million pounds sounds great, but let's just put this in context. There are two 1 million pound prizes won each month. And there are 136,000 million bonds entered in that draw, which means each individual one pound bond has a one in 70 billion chance of winning a million. That's a lot less than the lottery, though of course, in the lottery, you're gambling all the money you put in. Here, your capital is protected.

• 13:11Martin Lewis?

  So that's a nutshell of how it works. It's a prize draw each month. The smallest prize you can win is 25 pounds. The biggest prize you can win is 1,000 pounds. The prize fund rate is 4.35%. Now, what that means is over a year, it will pay out 4.35% of the amount in bonds in total. So there's 136 billion pounds in bonds. It's going to be about 5 billion pounds, a little bit more paid out each year in prize funds. So that's, that's the roughness of how it works. And I know you've got loads of questions and I've been saving, holding my fire to do some of the explanations for in those.

• 13:50Speaker 03

  Okay. Dad on Fire, so I wish I'd thought of calling myself that. Dad on Fire says, which parents would stop giving them as gifts to children, grandchildren? I got given 50 pounds 40 years ago and it's one nap for.

• 14:05Speaker 03

  If they had, just to make me laugh, I don't know why. If they had invested in a global tracker, would be worth over 2K. Also, if you've got numerous kids, if one wins and another doesn't, that creates issues.

• 14:17Martin Lewis?

  Well, look, I couldn't agree more. So let's go into some of that basics now. Well, now, I'll just go basic. If I start with the big picture, who are bonds good for, who are bonds bad for? Bonds are best for people who've got near the maximum in, near 50,000 pounds in, who have already used up all of their tax free savings allowance. Because it's worth remembering, the prizes on premium bonds are not taxable. They don't count towards your tax free allowance. And they would otherwise be paying tax on their savings interest. In that case, premium bonds are a good form of saving for you. Whether you should be saving or investing is a different question. And if you're putting money away for a long term, I think a global index tracker would be a better bet than premium bonds anyway.

• 15:02Martin Lewis?

  But if you wanted to keep money in savings and you can get your money out, let's say you were planning to buy a house in a year or two. If you're putting a large amount in and you're paying tax on other savings interest and you've used up your cash ISAs, premium bonds are best for you. Premium bonds are worse for people who are putting relatively small amounts of money in and don't pay tax. Pretty much all children.

• 15:24Martin Lewis?

  Pretty much all children aren't paid tax. So the main people that we buy and we think of giving premium bonds as a gift for, because you've got a relatively small amount, and this will all become clear as I explain it in a little bit of time, you are unlikely to win even as much as a savings account and never mind as much as investing over the long period. And yet, those are the right people. So the irony of premium bonds is we think of them as a great thing to give to children. Children are the worst candidates for premium bonds. And actually, if you're going to give it to someone, if your son and daughter is a high earner who's used up all their tax allowance and is saving their money for a property in a year or two, they're probably the best ones to give premium bonds, as long as you're giving a lot of them. So the logic doesn't really work that well. I'm totally with, what was it, Dad on Fire?

• 16:03Speaker 03

  Dad on Fire.

• 16:04Martin Lewis?

  I'm with you, Dad on Fire.

• 16:05Speaker 03

  So I think I'll do these together unless you stop me in mid flow. But Tony says, I've got friends and family who put in a maximum 50K. I'll try to explain the interest they've given up is equivalent to 2,000 pounds a year compounded. So they need to win 166 pounds consistently a month to keep up. Is it worth it? Chantel says, I've got the maximum in never more than 150 pounds winning on a good month, but does win most months. I've had them so long now that I dare not cash them out in case they'll win in the future. So it's this psychology, it's something that appeals to us, that element of risk and anxiety.

• 16:45Martin Lewis?

  Devious psychology that keeps us locked in. I cannot tell you how many people have said to me in the years, but I win 30 pounds a month. And it's like, yes, but if you put the money in a savings account, you would have a guaranteed interest of 50 pounds a month.

• 16:56Speaker 03

  But you wouldn't have a chance of winning 50 grand.

• 16:59Martin Lewis?

  You wouldn't have the one in 70 billion pounds per individual bond chance, one in 70 billion chance of winning a million. That is absolutely correct. You are foregoing that. I mean, I think you probably have a better chance of tossing three coins and them all landing on the edge than you do to win the one in 70 billion. But anyway, I haven't done the stats on that, so that's not a scientific quote. Let's go into the science behind premium bonds. Now, to actually work out your predicted winnings, you have to do something called multinomial probability. I built a tool that does this. The equation to build it, just to put it into context, was one that was so complicated. The only person that we could find who could write the equation to do the multinomial

• 17:38Martin Lewis?

  probability at the time was a PhD cosmologist, whose whole PhD and work was about calculating the interrelation of movements of stars. And then we had to get a professor of financial mathematics to validate the algorithm before we ran it. And this was about 15, 20 years ago. The calculator does still exist and it will basically tell you what your likelihood of winning is. And some of the stats I'm going to give you come from that. So let's just go into what we're going to be talking about, because with premium bonds, it is all about typical luck.

• 18:06Martin Lewis?

  First thing to say, if you have a pound in premium bond, or let's do £100, you've got £100 in premium bond, the price fund rate is 4.35%. So if you were to do that on simple mean maths, using that, that is a mean average of what you would win over a year. You put £100 in, you win £4.35. The problem with that on premium bonds is you can't win £4.35. The smallest prize is £25. So you can either win nothing, or you can win £25 or more. And the vast majority of people, over 90% of people with £100 in, will win nothing. In fact, with typical luck, which I'm going to define in a moment, if you've got £1,000 in a year, with typical luck, you will win nothing.

• 18:50Martin Lewis?

  Now, when I say typical luck, because the mean average, the prize fund, isn't realistic because of the way that bonds are distributed, we have to look at another average, we have to look at the median average, which Adrian, I know you will like to define because we've talked about this before.

• 19:05Speaker 03

  Okay, well, that's where you put all the numbers in order of how much you want. So, and there'll be loads of zeros, zeros, zeros, there are loads of zeros, going up to whatever it goes up to, and you take the one that's bang in the middle. Is that right?

• 19:20Martin Lewis?

  Yeah, so that's absolutely right. The way I would talk about it for premium bonds is, let's imagine we took everybody in the country who had the same amount of premium bonds, and we lined them up in a row. And we lined them up in a row in order of the ones who've won the most to the ones who win the least. You then walk halfway down the row, and you found the person in the middle, and you say, how much did you win? That is the median average, and that is what I use to define what someone with typical luck would win.

• 19:51Speaker 03

  And it's not 4.35%.

• 19:52Martin Lewis?

  It is absolutely not. In fact, no matter how much you have in premium bonds, it is always with typical luck, less than 4.35%. As an aside, top easy access savings rate at the moment, 4.55%, top one-year fix at the moment, 5.1%. So even if you did win the mean average, you would be winning less than you could get in a savings account. But in reality, when you've got money in premium bonds, you win less. Why does typical luck on the medium win less than the mean average? It's really simple. Because for everyone who wins a million pounds or £100,000, somebody else has to win nothing to make it work. So

• 20:31Martin Lewis?

  let's just do some of the maths here. At the 4.35% prize rate, with £100 in, typical luck, you win nothing. With £1,000 in, typical luck, you win nothing. With £10,000 in, you would win with typical luck, about £350. So that's a 3.5% tax-free return. With £25,000 in, with typical luck, you'd win £925. That's 3.7% return. With £50,000 in, you'd win with typical luck, £1,900. That's a 3.8% return. To give the stats in a different way on the

• 21:11Martin Lewis?

  variance of this, to beat the top easy access savings, that's the one where you can put money in and take it out at 4.55%, we'll assume you're not paying tax on savings, and if you were, well, you can actually get 5% in the cash ISA, but I'll do it at 4.55%. To beat the top 4.55% savings, once you've got a decent amount in, say £5,000 above, I mean, it does vary on the exact number, you have a 30% chance of winning more than a savings account if you put money in premium bonds, if we ignore tax. A 30% chance of winning more. A 70% chance you will win less. And with smaller amounts, you have a pretty strong chance, in fact, if not a vast likelihood at the very low amounts, of winning nothing.

• 21:56Martin Lewis?

  Which goes back to me saying, why, these are best for people who would pay tax, because the advantage is it's tax-free, and they've used up their savings, and you've got the maximum in, because when you've got the maximum in, that's when you get closest to winning the mean average, although you still wouldn't beat a savings account. But 3.8% tax-free if you pay tax, otherwise is a pretty decent bet. So I should let you do more questions now, yeah?

• 22:18Speaker 03

  Claire and Sally, people we know who have the same holding amount as us but purchased more recently, seem to win a lot more often. Do older bonds somehow have less chance of winning? And this is from Sally. So new numbers win more often than older numbers, based on probability they should not, but maybe they do.

• 22:38Martin Lewis?

  Okay, I'm about to reveal something that they never tell you here, Adrian.

• 22:41Speaker 03

  Right, go on.

• 22:43Martin Lewis?

  Many people think new bonds win more often than old bonds. And they're right.

• 22:53Martin Lewis?

  And this is the reason why. There are more new bonds than there are old bonds. Each individual bond, whenever you bought it, has exactly the same chance of winning in premium bonds. It is a random lottery. The fact there are more new bonds means new bonds win more often. But the idea that if you were to sell your old bonds and rebuy the same number of new bonds, you would now win more often, is a complete falsity. Every bond has exactly the same chance. The reason it is perceived sometimes that newer bonds win more than old, is there are more newer bonds. In the old days, people were buying 10 quid of these. These days, they're buying 100, 1,000, 10,000 pounds of these. The reason why some areas

• 23:35Martin Lewis?

  are perceived as winning more than others, is because there tend to be more bonds in the areas that win more than there are others. They tend to be areas where more people hold premium bonds. But go back to the raw stats here. Every bond, whenever it was bought, whomever bought it, wherever you are from, has the same chance of winning. Clearly though, if you have 50,000 bonds, or 50,000 tickets for the lottery, you have more chance of winning than someone who has one bond, because you've got 50,000 of them.

• 24:07Speaker 03

  So if you put, I wouldn't advise this, but if you put £50,000 in the lottery over a year, instead of putting it in premium bonds, has anyone done that some?

• 24:20Martin Lewis?

  Yeah, you would almost certainly be far better off, because half the money from the lottery disappears to the prime fund. So the maths is you'd be far worse off in the lottery. A better suggestion, if you wanted to do it, and I haven't done the maths, but a more clear example would be, if you were to put all your money into a top interest savings account, and then use the interest from the savings account to buy lottery tickets, how would it compare? Now, I did this calculation last, probably in about 2004, and I did it by buying Irish lottery tickets, because Irish lottery, just to do the comparison, Irish lottery tickets have a higher return than the UK lottery did at the time. I haven't done the numbers since. And at that time, you were actually probably

• 25:03Martin Lewis?

  slightly better off, from memory. I may have this wrong, so I don't want to be quoted particularly, but you were slightly better off on using that method than going into premium bonds. But you can't do a comparison between premium bonds and the lottery, because you put £50,000 in the lottery, all the 50,000 goes. You put £50,000 in the premium bonds, you're only gambling the interest. It's only the interest that's due to a prize draw.

• 25:24Speaker 03

  Nathan, is it better to buy small amounts each month, so the bonds are spread apart, or to save the money and buy a bigger chunk in one go, so they are grouped together and may have a better chance of winning? I don't mean to laugh, it's exactly the kind of thing I'd think.

• 25:38Martin Lewis?

  But what's the answer, Adrian?

• 25:40Speaker 03

  I don't think it makes any difference.

• 25:41Martin Lewis?

  Every individual bond is individually entered into the lottery. The fact that they're all next to each other in the order that they've been bought is completely irrelevant. It does not change your odds in any way, shape, size and form. And if you are going to be buying them, well, then the sooner you buy them, if you want to win, the more chance you've got of them being in the draw. Having said that, you'd be better keeping the money in a savings account in most cases. So yeah, almost all this stuff about, you know, this is the way to, is all nonsense. It's all nonsense. Sorry. So when I was doing this with Adrian, we popped off to the news then. But no surprise, with £137 billion of premium bonds out there, you have a lot of questions on it. So when we came back, we got stuck in with a few more.

• 26:22Speaker 03

  We've got some more premium bond questions, Martin.

• 26:25Martin Lewis?

  Sure.

• 26:25Speaker 03

  Diana, if I were to have a big win on the premium bonds, would it be added to my estate and probably therefore incurred inheritance tax?

• 26:35Martin Lewis?

  Absolutely. Both the premium bonds that you own, and any winnings from premium bonds, are taxable for inheritance tax purposes. So would form part of your estate, yes. But hey, look, inheritance tax is a maximum 40%. If you won a million pounds the day before you were to pass away, and it would all go straight into your estate, and you had other assets, so you'd be over the thresholds, then 40% would disappear, but it'd still be £600,000 up. But yes, if you're asking, but it's the same as all forms of savings and investments, in most cases are all eligible for inheritance tax in that way, unless you tax structure them in a way that you need to. Yes, yes, yes, yes, yes.

• 27:10Speaker 03

  Nettie says, is it better to buy government bonds and not premium bonds?

• 27:17Martin Lewis?

  I think that's a really interesting question and one I haven't looked at the rates today or yesterday. So if you were to buy short term dated UK government guilts, so that is that you're buying a government guilt that you were to redeem in a couple of years. So as long as the government doesn't default, which the UK government has never done, but hey, we're in interesting times still. I don't think it's particularly likely it would. And NSNI is a government owned financial institution anyway. So it's similar. The the financial strength of the government is what's backing both of these two. So you have a pretty similar risk. Well, if you buy short dated government guilts, one of

• 27:57Martin Lewis?

  the advantages of those is there's no capital gains tax. So effectively, it's tax free on the amount you gain. What I mean by this is if you bought a guilt for 96 pence and it's redeemed at a pound and those type of values are out there and you get some interest, but it'd only be a small amount of interest, your net return over two or three years, if you pick the right guilts, is both close to tax free. The interest is taxable, but the the main return comes from the capital gain. That's tax free and will often be quite a lot higher than the premium bond prize fund rate. So guilts are something people could consider looking at. This does make me think of the one other reason that people often go for premium bonds, which I think again is a bit of a falsity these days. One

• 28:40Martin Lewis?

  of the reasons people go for premium bonds is it's part of NSNI, used to be called National Savings, which is the UK government owned government financial services provider. So it's, you know, it's it's government owned, therefore people go, it's totally safe, you know, whereas if you've put your money in a UK regulated bank or building society, you've only got the FSCS protection, which is also government backed. But in the old days, the financial services compensation scheme was less than the maximum you could put in the premium bond limit. But the premium bond limit hasn't been risen that often and is still at 50,000 pounds. I mean, many people got in touch with their questions and why hasn't it gone up? Well, that's the government, not me, I'm afraid. But the amount that you have protected in a deposit account in savings is 120,000 pounds per

• 29:25Martin Lewis?

  person per financial institution. You can only have 50,000 pounds per person in premium bonds. So the idea that there's this great safety dividend of your money in premium bonds because it's from a government owned financial institution. No, if you put it in other savings, UK regulating savings, you're protected up to 120,000 pounds by the financial services compensation scheme, which is effectively underwritten by the government anyway. So I don't think that safety dividend is anywhere near as strong as it used to be.

• 29:51Speaker 03

  Janice, my parents bought my daughter some premium bonds and in the last year she's won 625 pounds. She's saving for a house and is thinking it would be better investment if she used some to put in her lifetime ISA each year. Not sure how her nan would feel about it though, but her daughter's right, isn't she?

• 30:10Martin Lewis?

  I mean, there's absolutely no comparison between premium bonds and a lifetime ISA if it is going to be used for a first time for a deposit on a house costing under 450,000 pounds. I mean, the lifetime ISA isn't just a tiny bit better. It is smacking the pants and leaving bruises all over premium bonds. I mean, it is so much better. They're not in the same category. I mean, the mean, the prize rate on premium bonds is 4.35%, but as I've already explained, with typical luck, you're likely to win less. With a lifetime ISA, the interest rates you can get are higher than 4.35%, but most importantly, if you use it towards a first time deposit and you've had it for over a year and that house is

• 30:49Martin Lewis?

  costing under 450,000 pounds, the state adds 25% on what you put in it, up to 4,000 pounds a year. So if you put the maximum 4,000 pounds in it, the state adds 1,000 pounds on top and you get interest on it. If you've got the money, you put another 4,000 pounds in the next year and the state adds 1,000 pounds on top and you get interest on it. I gave you the odds before of someone beating savings interest, beating a lifetime ISA bonus with premium bonds. I'm making this statistic up, but I think you're probably talking in the 0.1% type levels or less. I mean, one in a thousand might beat that. But I would think it'd be of that type of realms that premium bond might outperform a lifetime ISA used for the right way and with the bonus coming on. So it's not even close.

• 31:34Speaker 03

  How how do you go about finding bonds that were gifted over 40 years ago? Please, Jane wants to know.

• 31:40Martin Lewis?

  Well, this is really interesting because there's 126 million pounds of unclaimed premium bond prizes to start with. Many people have lost track of their bonds and they should be. If you know your bond numbers, go on to NSNI's prize checker. You should have a number to go and use on the prize checker. If you don't know where your bond is, then NSNI has a tracing service on its website, or you can also call it up to find the details of your old bond, or you can use the My Lost Account website, which is an agglomerator of bank accounts and savings accounts that people have lost track of to try and get hold of this. A caveat here, though, is there has been quite a scandal recently of NSNI not putting people and not finding people deceased relatives' bonds and old bonds.

• 32:24Martin Lewis?

  The chief executive of NSNI left on the back of it, resigned over the back of it. So this isn't me making accusations that aren't well known. So I'm hopeful they are improving their systems, but I don't have 100% faith in their systems, but that's the main way to do it at the moment.

• 32:39Speaker 03

  Okay, David was gifted 20 pounds worth as a child and never returned a penny in 40 odd years. Better off leaving them there or just cash out and invest elsewhere.

• 32:49Martin Lewis?

  Well, mathematically, you've done very, very badly. How long? When did he have the money? Did he say?

• 32:53Speaker 03

  40 years.

• 32:54Martin Lewis?

  40 years. I mean, 20 pounds, inflation over 40 years has massively eroded the amount of money that you've had in there. And as our very first questioner said, you would have done far better if you had put that money in a global index tracker fund. And even if you hadn't done better in global index tracker fund, you would have had a chance of it doing better in the way that you wouldn't with premium bonds, a much better chance with typical, typical luck, I would think. What do you do with it now? Well, it's 20 quid, isn't it? I mean, you could keep it in there if you've got the hopes and the dreams that it would win. Mathematically, get it out. I mean, go and spend it, enjoy it. Because frankly, it's 20 quid and it hasn't grown in value. Now, if you want to know what you're going to do with it, you know, actually, why don't we stick to what we said earlier? It's money that you haven't touched that you're not going to use. Go

• 33:37Martin Lewis?

  and open an investment account, put it in a global index tracker and maybe think about adding 10 pounds a month to it too. And maybe in the next 40 years, it would do really well for you.

• 33:45Speaker 03

  I can see the the point of premium bonds is that I'm just think there's not many ways to gamble, which it kind of is.

• 33:52Martin Lewis?

  It's it's relatively safe gamble.

• 33:55Speaker 03

  Without risking your stake.

• 33:56Martin Lewis?

  Yeah, but people don't perceive it like that. They see it as a safe form of savings and they don't realise there's a chance of it being eroded by inflation even more than top savings. And there's certainly a chance of not doing as well as top savings and there's very much a chance of it not doing as well as investing. But it is a psychologically devious thing, this idea of the win. I'm winning, I'm winning, I'm winning. You're winning in the absolute, did I get money this month? Most people are not winning in the comparative, could I have put it away in total safety and got more? Yes. Could I have taken a risk and put it in some form of investment and a broad spread of shares or bonds and done better? Probably yes as well. So comparatively, people are doing badly. And I go back to that original thing. Don't give your kids 100 quid worth of premium

• 34:40Martin Lewis?

  bonds. You're just going to do what hundreds of thousands or millions of people out there who've been given that and they've never gained a penny from it and their money has just been eroded by inflation. Premium bonds are for people who pay tax on the savings, who can't look for money away to invest it and who are putting in a decent whack, a minimum of 5,000 pounds. That's when they become actually a good idea and you might want to look at it, once you've used up everything else. But as a basic thing for kids, I think there's better.

• 35:09Martin Lewis?

  Now to this week's tellers. We want you to tell us, have you ever lent money to family and friends? How did it go? Did you charge interest? Would you do it again? And what lessons did you learn for others? We've had a fascinating split response. Some people who said it went brilliantly, others who didn't. But actually, I'm going to be doing a bit of an expansion on the tellers this week because I've been writing recently a guide in how to do this. And I've been doing a lot of thinking about the right ways and the principles to lend to family and friends. So I'm going to be intercutting your tellers with my tips. But let's just start on this. We've got to remember when banks lend money to us, say on a high street credit card, they charge around 25% APR. Yet when we lend

• 35:51Martin Lewis?

  to them, which is what we're really doing when we save, if you think about it, us saving with them is us lending them money for them to use out, even the best savings rates are only around 4.5%. So it is no surprise that many people turn instead to the bank of mum, dad, son, brother, sister, cousin or best mate. And if you're the person being asked or offering to lend a material amount, this is not a trivial decision. You need to go in it with a good understanding of what you're agreeing to, how it's going to work, when the money will be paid back, how much money will be paid back. Potentially, does the person you're lending to have the ability to pay you back? And you need to think about

• 36:33Martin Lewis?

  what you would do if you don't get paid back. In reality, is it a gift? Is it a loan? Let's start the tellers.

• 36:42Speaker 03

  Andy, I have done. I wouldn't do it if I wasn't prepared to write the whole amount off.

• 36:47Martin Lewis?

  Well, I think that is exactly the right strategy. I think, you know, the way that you should be thinking about it is, is it really a loan? Are you really lending someone money? If you are, you should be doing the formal lending agreement. And I would say the way to define that is you want to do a formal agreement if you want to, A, to be able to take action to recover the money lent if they don't repay, and/or B, for them to take the loan seriously enough to believe you may take formal action if you don't repay. If this is someone who you'd never take legal action against, and both you and they know it, then don't kid yourself that it's a loan. The reality is, it is a gift that you hope they will repay.

• 37:29Martin Lewis?

  And if so, you might just make it all easier, forget any formal agreement, and you just say to them, I'd like you to pay this back if and when you're in a comfortable position to do so. You know, if you're doing it for your kids, you're never going to force them. You can say, I want the money back, but the truth is, what are you going to do if they don't? Are you going to let it ruin your relationship? How are you going to go about it? So I think the really big point, if you're lending to family and friends to start with, is, is it really a loan, or is it a gift you hope might be repaid? And whichever you answer to the two of those is what dictates the strategy that you use, whether you go to a formal agreement. And I've written a template letter, people will be able to find if you do want one of those, or you just go, fingers crossed.

• 38:08Speaker 03

  Evelyn, I always thought the point of lending money to mates and family so they don't have to pay interest.

• 38:14Martin Lewis?

  Well, yeah, that was one of my big questions, do you charge interest? I actually am principally not opposed to interest when lending to family and friends. And that's for this reason, there is an opportunity cost to you giving family or friends money. We've just talked about savings. You can earn 4.55% if you put the money in the savings account. So if you lend it to somebody else, then effectively the cost to you is the interest that has been foregone. Now, yes, many people say it should be interest-free, but the reason you lend to family and friends is they may find it difficult to lend from a commercial lender, or they may be charged a very high rate, you know, 20, 30, 40%.

• 38:55Martin Lewis?

  So if you could lend to them at the amount that you could earn in savings, so there's no opportunity cost for you, and they're still getting a far, far cheaper loan than otherwise, that would seem sensible. The but is, and it's really interesting when I've been researching this. While in principle I have no objection to interest, I do have an objection to interest on a practicality. And the practicality is this, first of all, if you charge interest, even it is taxable. If that interest would be repaid, and you are someone who pays tax on savings, because it's equivalent to savings interest, you would have to pay tax on that interest. Even if you are somebody who is within your tax-free savings allowances,

• 39:37Martin Lewis?

  you would still have to notify the tax office, this is the legality. And people are saying, oh, it doesn't matter, I'm not really going to notify them. What, it's just a personal thing? Unfortunately, if you were ever to have a tax investigation, they were to see these payments coming in, they would be asking what they're for, you would then have to prove it. You should notify HMRC if you are charging interest. And third, it massively increases the complexity, because if you are charging interest, you're going to need to have a formal loan agreement to talk about the structure of the interest and how the interest is being charged. In order that if you were to have to report it to HMRC, they could see, because interest, when is the interest crystallized? In what year does the interest crystallize if it's over a few years? And for all of those reasons, I wouldn't charge interest. But I don't have a principled objection to charging interest.

• 40:22Speaker 03

  Emma says, my dad lent me money to buy my second car when I was 18. I was charged interest at a lower rate than I would have been charged had I taken out a finance agreement. I paid him on time every month, and he asked me to track where we were up to. That monitoring encouraged me to pay off extra amounts as and when I could. I'm now a qualified accountant, and I think part of my career choice was shaped by that experience.

• 40:45Martin Lewis?

  Well, I love that, and I love the formal structure. There was interest in that one, wasn't there? He said, yes.

• 40:49Speaker 03

  Yes, yes, lower interest, yeah.

• 40:51Martin Lewis?

  Yeah, low interest, because I don't, again, the interest on principle, that's not really a problem for me. I mean, that shows that it can work, and there was a real split in the responses that we had, I have to say. Between the people who've done it and they got the money back and everything was fine, and the people who it's absolutely, they've destroyed their relationships with others. And that's why I have, I have a little checklist. Before you loan, what you should say is, you never need to assume it's all going to be easy, and just thinking, it's simple, I give them the money, they pay me back, this will all be hunky-dory. A far better starting point would be to ask yourself, what would happen if it all went wrong? What if they can't repay? What if they don't take it seriously? What if your relationship changes?

• 41:34Martin Lewis?

  What if the loan quietly becomes a thing that you both avoid talking about? And then I would go through this type of checklist, are you being pressured, harassed, manipulated, or guilt-tripped into it? Which can happen in romantic relationships, and is actually a form of financial coercion, of potentially domestic abuse. So we need to be very careful about that one.

• 41:53Speaker 03

  I mean, when I've been in this situation, you would think it was whoever's doing the lending and not being paid back is the one that's upset with the person for not paying them back. In a couple of times, in my experience, it's the person who you've lent money to who ends up disliking euphoria, ultimately, in a weird way.

• 42:13Martin Lewis?

  Yes, because they're resenting you, because they're having to pay you each month, and their brain forgets the idea that you gave them money. And they just see you as one of the sink costs, and I'm really struggling, and yet I've got to pay this person each month. And that's all about why we need to think of it this way. I'm going to go through the rest of my checklist, because this is the formal stuff. And people should carefully consider whether you can actually afford to lend this money. And I know in some cases, if it's your kids, it doesn't matter if you can afford it. But if you can't afford it, but then you've got to cross your fingers, I would always check, are there better ways to help? Debt or budgeting support, is some form of cheap commercial borrowing a better option for them? You know, are actually, if they haven't checked this out, are there someone who's able to get a 0% credit card being repaid over two years?

• 42:56Martin Lewis?

  That would be a lot cheaper, and they could make the repayments on that in a structured, and you could help and inform them to do so. Don't assume if you need the money in future, that you can demand it all back. I've heard of this happening too. I'm going to lend it you, but if I need it back, you'll need to give it me all back, and they ask for it back, they don't get it all back, and it causes a nightmare. Is this really the right way to solve the problem? Is this someone who actually has a much bigger problem than this short-term amount of money? And has, you know, maybe a gambling habit that isn't going to be fixed by you lending them the money? And finally, is the loan to assist with a mortgage deposit for a home, if it is, you might want to go into a formal lending scheme? I mean, there are so many things that you want to consider before you do this. And then again, is it the right way to go forward? Go, do some more of the tellers, because they're really interesting.

• 43:41Martin Lewis?

  I'm trying to, as people can probably work out, trying to get my sort of tips in the middle, intervening in the middle of them.

• 43:47Speaker 03

  Tremaine says, an old saying, don't lend money you can't afford to lose. Sue says, charge interest to a family member or friend, that's an outrageous idea, horrible. Iliana, never again.

• 43:58Martin Lewis?

  I'll tell you something else you'll find outrageous. I also think, if you want to, if somebody wants to borrow money off you, what people don't do, because they're embarrassed, is say, can you show me proof that you're going to be able to repay? I would like to know what your income is. You might even ask them, you could never force them to, to show you their credit files. Ultimately, you've already put into this rather awkward British discussion of money. This person is asking you to give them money. If you feel you want some idea of whether you're going to get the money back, we're talking about in the formal loan rather than, you know, giving to your kids or giving to your parents when you're just giving it them and hoping you get it back. Then actually, I don't think those are illegitimate questions. People will find them uncomfortable, but I think they're legitimate questions. Can they afford to repay is the really big one.

• 44:43Speaker 03

  Iliana says, never again. Started as a genuine need, then became seen as a sort of mid-month top-up to keep asking for and have fun with. Stephen, a lot saying they would never charge interest, I would never borrow without paying interest.

• 44:58Speaker 03

  But I think that's interesting.

• 44:59Martin Lewis?

  Well, I think that's conceptual. If you go from that perspective and think, I need to borrow money off someone, and they are foregoing interest they could earn, or growth in investments they could earn by giving me the money, I would like to compensate them for that cost, so they are not out of pocket. As we talk about it, you know, as people in business, it needs to wipe its own backside, is what we're arguably saying here. You know, if I'm going to lend you the money, I want to do it in a way where I'm not out of pocket, and hopefully that'll be in a way where you're a lot better off than if you've got a commercial loan. So I'm with that one, in principle, but not in practice.

• 45:30Speaker 03

  Okay, Jess, I lent money to a colleague who'd left without his wallet to buy his wife flowers for an anniversary, I think. There was no interest charge, it was paid back quickly, and I understand he came clinging to his wife that he had to borrow the money. They're still together, but I'd expect nothing less in the circumstances. Who doesn't love a happy ending? I mean, that's not, I mean, that's not, that's not quite what we're talking about, is it?

• 45:51Martin Lewis?

  No, we're talking about lending substantial amounts of money, not 20 quid at the pub. Although 20 quid at the pub done 50 times becomes a substantial amount of money if someone has a habit of doing it. But yeah, but it's still a nice story.

• 46:01Speaker 03

  Sylvia, my old dad, many years ago, borrowed money from his mother to buy a house, which cost him five grand in 1957. My mum made him do it all above board and was repaid as a mortgage with the interest paid, but at a lower rate. When they both passed away, we got over 70,000. It was only a little terrace house, but it was our family home.

• 46:21Martin Lewis?

  So it can work, but I do think, I would still go back and finish on, if it's a proper loan and you want the money back, a formal lending agreement is very helpful, both if you're charging interest when it goes to the taxman, but also what happens if there's a dispute? And then, you know, we could, we could talk about how you enforce it, and you can enforce a formal lending agreement in court.

• 46:41Speaker 03

  But you don't need a lawyer to draw it up, though?

• 46:43Martin Lewis?

  No, no, you would, if it's very simple and you're not charging interest. As I say, I have a template letter that I've made available that I've had legally checked, that people could use. I mean, you can go to a lawyer, absolutely, and you should if it's complicated. But otherwise, that should be able to help you through it in the basics of it. I mean, whether you ever take them to court, I mean, always better discuss with them to renegotiate the terms, to sit down and see what the problems are. Court should be your very, very last option, even if you hate them now, because it's a pain for you and it's a pain for them. And speaking of our very last option, it is for you anyway, play that theme tune.

• 47:24Martin Lewis?

  Oh Adrian, I heard you humming it then, which shows just how fond you are of doing Money Mastermind.

• 47:28Speaker 03

  You've caught me.

• 47:29Martin Lewis?

  I have. Welcome to Money Mastermind. Adrian, you've got 22 right and 44 wrong in this three option multiple choice quiz, which means I'm afraid you're back to

• 47:44Martin Lewis?

  no better than random chance. That's a shame.

• 47:47Speaker 03

  I'm more comfortable with that.

• 47:49Martin Lewis?

  You are at exactly the cusp though. 22 right and 44 wrong in three options is literally exactly what random chance would statistically propose. So you get one right, you go back above it.

• 48:00Speaker 03

  Right.

• 48:01Martin Lewis?

  Marginally, although it would still be in the error range, to be honest.

• 48:05Speaker 03

  You're terrible. You're just terrible. So I'm gonna love you.

• 48:09Martin Lewis?

  I've just felt it had to be statistically accurate. You know, I love doing this with you and I've been trying to be somewhat encouraging and help you.

• 48:16Speaker 03

  That's worse. Anyway, go on.

• 48:19Martin Lewis?

  So today's question.

• 48:20Speaker 03

  By filibustering it.

• 48:22Martin Lewis?

  Our Adrian, entrepreneurial as ever, has been hard at work on a brand new board game. Where he got the idea, nobody knows. What's he's decided is this. One player reads out a financial scenario. The other picks the right answer from three. He's calling it the mastermind of money. It's groundbreaking. And in a stunning show of generosity, he's offered me some part-time work writing the questions. Thanks, mate. This one is my first and I would like to test it out with you to see if it's good enough. I know that it's all gone a bit meta in that setup, but I did quite like it.

• 48:57Speaker 03

  Yeah.

• 48:57Martin Lewis?

  It's not as good on the radio as it was when I wrote it, but hey, let's just style on through it, shall we?

• 49:01Speaker 03

  Showbiz.

• 49:02Martin Lewis?

  Okay. So here's your question.

• 49:06Martin Lewis?

  If you've not heard it before, by the way, there's normally a much better setup. That one didn't work. I'm feeling bad. A couple living in England have been together for 20 years. They're not married and have three children. If one dies without a will, leaving an estate worth £600,000, who automatically inherits it? A, the surviving partner gets everything. B, the surviving partner and the children share it. C, the children share it equally. So this is under English law. Couple have been together for 20 years. They are not married or in a civil partnership and they have three children.

• 49:45Martin Lewis?

  Does it go just to the partner, to the partner and the children, or just to the children?

• 49:50Speaker 03

  Is the fact that they're not married significant?

• 49:54Martin Lewis?

  I always write a question and put lots of different points in there, some of which are significant and some of which aren't. Did that help?

• 50:01Speaker 03

  I would. I think if you're married, I think it, yeah, I'm gonna, well, I think it does go to the,

• 50:09Speaker 03

  I think it does go to the surviving partner. So if you're not married, maybe it's different. So maybe in that case, it goes to the three children.

• 50:22Martin Lewis?

  Final answer?

• 50:25Martin Lewis?

  So Adrian, you are absolutely right. If you're married or in a civil partnership, then the first call, if you haven't left a will, under the intestacy rules, is it goes to the partner. In fact, in England and Wales, the first £322,000 goes to the partner, but the rest is shared with the children if there's no will. So if this had been a married or civil partnership couple, the answer would have been B, the surviving partner and the children share it. But they were not married or in a civil partnership, which means, play the hallelujah.

• 50:57Speaker 03

  Oh, beautiful.

• 50:59Martin Lewis?

  Yeah, not good news for those people who are just cohabiting, though, I'm afraid.

• 51:03Speaker 03

  No.

• 51:04Martin Lewis?

  You have to understand currently in the law in England, in Wales, in Northern Ireland, and to a lesser extent, it's more complicated there, in Scotland, the fact you've been lived together for 20 years and got children is irrelevant. You do not get anything under the intestacy laws. You need to do a will if you want to make sure it goes to your partner. There's big inheritance tax implications. Adrian, you got it right. You're above random chance. Well done to you.

• 51:28Martin Lewis?

  Right, I've just finished the record with Adrian, so I'm pod only now and I just want to do a little bit more detail about what happens if you die without a will and the fact that right now, three of the cheap or free will schemes are on. So again, the rules that dictate what happens if you die without a will are called the intestacy rules and they are different in each of the UK nations. I'm going to give you a very, very brief overview here, but the truth of it is, the best thing to do is to go on to gov.uk where there is an intestacy calculator for each of the nations and you can see what the exact situation is. In England and Wales, as I've mentioned, generally the first £322,000 goes to the partner and then

• 52:12Martin Lewis?

  if there are children, the remainder above that is shared equally between them and the partner. If there aren't children, it all goes to the partner. Broad brush here, lots of different scenarios. In Northern Ireland, it's pretty similar, but the threshold is £250,000. In Scotland has a totally different system that works a very different way. Now, I said that an unmarried partner isn't included in the intestacy rules in England, Scotland and Northern Ireland. That is true, though the partner can claim reasonable maintenance under the inheritance provision for Family Independence Act 1975, if they live together for at least two years before death. But that is a court claim. It isn't guaranteed and it can be costly, which is why one of the most important groups of people who really

• 52:56Martin Lewis?

  need to think about getting a formal will are those people who are unmarried and have a partner. Because you want to make sure that your partner is protected, especially, let's say you're living together and only one of you owns the house and it's in your name. Well, the partner, it wouldn't be their house anymore. And this is even more important. If you're living with someone and your children are from a previous relationship, not with the person that you're living with, because they may not choose to look after your partner in the way that you would hope them to. Now, of course, the point of a will, a will is a document that dictates what happens to your assets after you die, separate to a power of attorney, which dictates who would be able to look after your finances for you

• 53:39Martin Lewis?

  if you lost mental capacity. People always get confused between the two, so I'm going to say it really simply. Will is for when you're dead. Power of attorney is for when you're still alive. Other really key considerations of a will, we're talking about having a will, but it needs to be one that is up to date and has your intentions in it. Now, it's worth noting, if you haven't updated it in a while, you should do so. But if you got married, in most of the UK, your will is now invalid. If you've got divorced, well, it isn't invalid. It's probably got the wrong, wrong information in it. Same too if you had a child. So again, really important in those scenarios that you make sure you look at doing a new will. Your will can be stored by a solicitor for you, often for free, in a safe place. And there are schemes where you can do so. Worth, and I often mention

• 54:24Martin Lewis?

  this, you can't put your pension in your will. If you die before taking your private or company pension, it is the trustees and providers of that pension firm who will decide what to do with it. So you should make sure you have an up-to-date expression of wishes or nomination form, same thing, different names with different providers, that tells them your preferences. It's not binding, but it usually does the job. Okay, let me get on to the free or cheap will schemes that are available at the moment. Now, when it comes to drafting a will, the gold standard is you want a solicitor to do it for you. That way that makes it more difficult for it to be disputed after you've gone and for to make sure there aren't any confusions in there. And there are two charity schemes

• 55:04Martin Lewis?

  available right now with solicitor drafted wills. The first one is Will Aid and bookings are open now. It's on in November. Hundreds of solicitors across the UK will draft a will for you in the hope that you will make a charitable donation. This is for anyone aged 18 plus, right across all four UK nations. The suggested donation is £120 for a single person, or for a mirror will, which is basically where it's the same will in reverse for you and your spouse, you know, it's opposite, a suggested donation of £200. If you can't afford it, you can give less. Please don't game it though. While I always talk about ways to get things cheaper, this is for charity. The donation's spread across eight charities,

• 55:45Martin Lewis?

  Age UK, British Red Cross, Christian Aid, Crisis, the NSPCC, Shelter and a couple of others. So that is worth looking at, but they book up very quickly, so you'll want to do it now. Then you've got in October, Free Wills Month. Really difficult to say. Free, Free Wills Month. You say that. I'm going to give you a second now. Did you find it difficult? I don't know. Free Wills Month is available to those aged 55 plus in selected locations. You actually have a Free Wills Month, oh, I said it better than, a Free Wills Month in October and a Free Wills Month in March, and different locations are on in each one. The October month includes Birmingham, Cardiff, Edinburgh, Liverpool, Manchester and Northern Ireland, but check on their website to see if it's covered near you.

• 56:28Martin Lewis?

  Now here, as the name would imply, the wills are totally free. They're done in the hopes that you will leave a bequest, that's money in your will, which is of course left without any inheritance tax. The suggested amount is £300 or a small percentage of your estate, but it isn't compulsory. Scheme's been going 20 years and raises £30 million a year for good causes. It covers single and mirror wills. The charities it's sponsored by include the National Trust, the British Heart Foundation, Age UK, Marie Curie and more. And then finally, if you want to do it now, you don't want to pay Will Aid and you're not covered by Free Wills Month, then there is Octopus Legacy Free Wills Month that is on in September

• 57:09Martin Lewis?

  and October, again for aged 18 plus. This is only in England and Wales. It is free, but it is solicitor checked, not solicitor drafted. So you could call it silver standard if we said the other one is gold standard. What happens here is single and wills and mirror wills are drafted by its team and then overseen by a solicitor. So the first person drafted isn't a solicitor, but it's finally overseen by a solicitor, unless it's very complex where they will offer you a discount and you will have to pay to do it. Wills can be done online via phone and video in branch and during a home visit. It does it again in the hope you'll leave a bequest to one of 180 charities supporting the scheme. Again, not compulsory. It's helped raise over £100 million for charity. So if you don't have a will or you don't have an up-to-date one and you have assets that you want to go

• 57:54Martin Lewis?

  to someone, then get it sorted. Simple as that. If you've got questions on any of that, we might be able to cover them in the Question Time podcast, so do get in touch via [email protected]. And I think that's a good place to stop. I hope you enjoyed it. Thank you.

• 58:13Martin Lewis?

  And that is it for this week. We tend to put out a new episode every Thursday and Monday, which is our Question Time podcast, where you get to ask me absolutely anything and everything, open brackets within reason, close brackets. If you've enjoyed today's show, please tell your friends you've been listening to the Martin Lewis podcast. And why not subscribe and leave us a review? Then your pockets will be pleased with you and we will be too. And if you haven't enjoyed it and you've been listening this long, it's your own fault. Na na na na na.

• 58:58Speaker 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.

• 59:34Speaker 00

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• 1:00:44Speaker 05

  This week on The Interface, millions of kids have grown up on camera with their childhoods turned into content. There's a new law in California that gives influencers the right to be forgotten, and it could impact adults, too.

• 1:00:54Martin Lewis?

  And an attack on Russian data centres started a rumour that all the evil disinformation bots had been deleted from the internet. But the truth might actually be a lot scarier.

• 1:01:06Speaker 05

  For our take, join me, Jess Maddox.

• 1:01:08Martin Lewis?

  And me, Thomas Germain, for The Interface.

• 1:01:10Speaker 05

  Listen on bbc.com or wherever you get your podcasts.