Question Time: Is having a pension worth it? Why has my home insurance doubled? And Martin's Mick Jagger history!

Martin explains why pensions offer the biggest savings, why you must pay off credit cards IN FULL, and recounts the time he tried to convince Mick Jagger to finish his finance and accounting degree. Question Time is the new weekly bonus podcast from Martin where YOU set the agenda.... Send in your questions by emailing [email protected] mailto:[email protected].

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

• 0:00Speaker 00

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• 1:45Martin Lewis?

  Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our weekly Question Time edition, in which I answer your questions about absolutely anything and everything within reason. In this week's Question Time, you ask me, is a pension worth it? Why has my home insurance price doubled? How does paying off a credit card in fall actually work? Should a newly married woman keep her first time buyer status for a future Lysa or get put on the house's deeds? Can you put a personal loan into a cash ISA? And bizarrely, you ask me about Mick Jagger and I reveal my secret Jagger history. Play the theme tune.

• 2:46Martin Lewis?

  Right, Matt, I hope you've got a great selection of potpourri of questions for me this week. Podcast producer Matt, for those who aren't regular listeners, is the person who collates and compounds the questions and puts them to me in a hopefully not too challenging way, Matt. What have you got?

• 3:00Speaker 04

  Of course, potpourri smells very fragrant in here with all these lovely questions.

• 3:04Martin Lewis?

  Thankfully, we're not in the same studio, so I can't comment on whether you smell fragrant or not.

• 3:07Speaker 04

  I would like to kick off with Kay. She is saying, hi, how can I get a power of attorney for a loved one who hasn't got capacity?

• 3:14Martin Lewis?

  I'm afraid that's a very simple answer, you can't. Lasting power of attorney, I presume you're talking about, which is the main one, is something that needs to be set up while someone has capacity. And this is the great problem, and please do have a listen to the full podcast that I did on wills of power of attorney a week ago. You'll be available to download it and it goes into detail. This is the reason I'm so passionate about people getting power of attorney while they can. Because if somebody doesn't have capacity, the way that you can take over their finances for them is you have to apply to the court of protection, I'm assuming you're in England. You have to apply for the court of protection. I'm afraid it's expensive, it takes time, and it's administratively draining, and people find it very difficult.

• 3:59Martin Lewis?

  And it can leave someone's finances in limbo while you apply. And that's what you have to do. I mean, I think you're sort of asking that if they don't have capacity to take over their finances, to be able to look after their money and also health and wellbeing, that's what you will have to do. This is why I always suggest people get power of attorney in advance while they have capacity, and I have a power of attorney in place, even though I have no foreseeability of losing mental capacity, so that in the event I were to lose mental capacity, someone could very easily, my trusted nominated person, could very easily take over my finances and make health and welfare decisions for me. But the strict answer to your question, Kay, I'm so sorry, is you can't get power of attorney. You're going to have to apply to the Court of Protection to get the equivalent powers now.

• 4:43Martin Lewis?

  And it's far more difficult. I'm sorry. There's no easy answer there.

• 4:48Speaker 04

  Oh, that's difficult. Shall we move on? I've got a caller for you, Martin. Right, Peter is in Otchingham. Hello, Peter.

• 4:55Speaker 00

  Hello.

• 4:56Martin Lewis?

  Hi, Peter. What can I do for you?

• 4:58Speaker 00

  Hello. Well, thank you, Martin. Firstly, thank you for all your campaigning and advice and help. And making me, making me look like a personal finance whiz with my family in France.

• 5:09Martin Lewis?

  I like to hear that. You, you take the advice, you make it yours. I love it. Nice.

• 5:13Speaker 00

  I normally give you credit.

• 5:14Martin Lewis?

  Okay.

• 5:16Speaker 00

  But anyway, my question is about licenses. So my son, let's call him John, as I don't want the fame that comes from this to turn his head. His, he bought his first and current house with help from his financial product, Bomad, which is his bank of mum and dad.

• 5:33Martin Lewis?

  Yeah.

• 5:33Speaker 00

  And, and also his LISA. The house is in his name alone.

• 5:38Martin Lewis?

  Yeah.

• 5:38Speaker 00

  He got married earlier this year, so we'll call her Janet.

• 5:42Martin Lewis?

  Okay, Janet and John. I like it. I see where you're going with this.

• 5:45Speaker 00

  Yeah, yeah. She's lovely and a great new audience of my dad jokes. She moved in with him when they married, but John is due to remortgage before December. Would like to put the mortgage and house in both their names. But I was wondering, does this remove Janet's ability to use a LISA later? When Janet and John plan to buy another house in the next two to five years? Would it be better for him to keep it in his own name alone until the next move?

• 6:14Martin Lewis?

  Simple answer, yes, it does. It does remove her ability to use a LISA. To, I should be more correct. And as, as I'm talking to someone who I can tell, and I say this in the right way, is a nerd.

• 6:27Martin Lewis?

  Say that with all the compliment that it is meant to be. Because of course, a lifetime ISA can also be used for retirement savings, so it wouldn't present that. But the rule on a lifetime ISA is simple. If you have owned or part owned a house anywhere in the world before, even if you've inherited one for a brief time and then it was sold, you cannot get a lifetime ISA. So if she became an owner of this property, then she would not be able to get a lifetime ISA in future, or would not be able to get the bonus on a lifetime ISA as a first time buyer, as she wouldn't count as a first time buyer. So if that is your intent and they want to use that money, then for, you know, in purely financial terms as opposed to relationship terms and everything else,

• 7:11Martin Lewis?

  then then keeping her off the deeds for now would work because she would then be able to save towards a lifetime ISA and use it when they bought a property together later.

• 7:20Speaker 00

  Right.

• 7:21Martin Lewis?

  I would just be, I'm just trying to think what else I would do. Funny enough, we're just talking on the prior caller about power of attorney. And I would think that I would, in those circumstances, she's not on the deeds. So they're more financially separate than a married couple, maybe. I'd be making sure there was a power of attorney in place. Heaven forbid, you know, the last thing I want, I want, I want to waste you money by them getting a power of attorney that they will never need. Right, because nothing's going to happen to John's mental capacity. I'd also make sure a will is properly drafted. Remember, when you get married, your prior will is invalid. I'm hoping all of these things are complete wastes of money for you, but I'd still want you to do them anyway. Because, you know, these eventualities won't happen. You understand the point I'm making.

• 8:00Speaker 00

  I do. No, that's really helpful. Thank you very much.

• 8:03Martin Lewis?

  So yeah, so off the top of my head, I would think it sounds like if you're going to work it that way, she's better to keep her independence and then they can buy together and she will be able to use her lifetime ISA that way.

• 8:13Speaker 00

  Great. Well, thank you very much for that.

• 8:15Martin Lewis?

  My pleasure. Thank you so much. Yes, you do dad jokes and you're into finance. I mean, basically, we're clones. Thank you for calling. Mini Martellus there. I'm not, maybe Maxi, who knows? Cheers. Thank you for calling.

• 8:29Speaker 00

  All right. Thank you. Bye.

• 8:33Speaker 04

  I've got a question for you, Martin.

• 8:35Martin Lewis?

  Okay, don't.

• 8:35Speaker 04

  Weston@Westerner is asking, are pensions really worth it?

• 8:41Martin Lewis?

  Just a small question then. Short answer, yes, really worth it. Let's do the longer answer. Now, the first thing is, in a way, there's a bit of a misunderstanding about what a pension is. I could almost go back in history and I'll keep this pretty simple. Back in the, probably 90s it was, when people got a mortgage, they got a mortgage and they got this with-profits investment, which is a complicated, wrapped-up product, which is slightly vague, that was called an endowment to pay off their mortgages. And endowments performed pretty poorly and there was a big misselling scandal. And what happened is, because they called them mortgage endowments, people were like, "Endowments are really awful." They didn't say mortgages were awful, I mean, no-one wants the debt. They said endowments were awful.

• 9:25Martin Lewis?

  Now, when it came to pensions, you effectively had a very similar type of investment in the 1990s. It was a pensions with profits fund, but we didn't call them pension endowments. We called them pensions. And because those endowments didn't do very well and weren't transparent, just like they didn't in mortgages, people used to say pensions are terrible. And the sort of point I'm making, why I'm starting going back into history and for those people in their 20s and 30s is going, "Why is he doing ancient history?", is because that really tarnished the reputation of pensions. Now, all a pension is, a pension is a tax treatment on a form of savings or investments. And it's a tax treatment that says you can put money into a pension from pre-tax income

• 10:09Martin Lewis?

  and you then have to hold it until you're, you know, age 57 and then you can take 25% out as a tax-free lump sum and the rest will be taxed. And that's what a pension is. What you put in your pension is up to you. And certainly in this modern age, where we have self-invested personal pensions, where you can, you know, play the stock market if you chose to, I'm not suggesting you do, or it's long-term is always better. Play the stock market if you chose to within your pension, or you could invest in property funds within your pension. The idea that we have to move away from is a pension is... Is a type of investment, it's not, a pension is just a wrapper that wraps around it and it has some magnificent benefits. You know, it is an incredibly effective way to save for your old age.

• 10:54Martin Lewis?

  Such an effective way that the alternative product, the lifetime ISA that was put out that was for retirement saving. Many providers and banks didn't put lifetime ISAs out because they didn't want people to put money in and then get done that they'd been, that they'd mis-sold them because they should have put money in a pension because a pension is generally so much better. Pensions aren't perfect. So let's just talk about what the benefits of a pension are. The big one is that pre-tax income benefit. So if you are a basic rate taxpayer, you can put money in your pension from your pre-tax income. So let's imagine for simple numbers, you put a thousand pounds into your pension. It comes from your pre-tax income.

• 11:37Martin Lewis?

  So you would only lose eight hundred pounds in your pay packet to put a thousand pounds in your pension. Because your take-home pay is taxed, but the pension's coming off before that. If you are a higher forty percent rate taxpayer to put a thousand pounds in, would only cost you six hundred pounds. If you're a top forty-five percent rate taxpayer to put a thousand pounds in, would only cost you five hundred and fifty pounds. So you are getting more investment than it costs you, there's an instant head start. And even if you don't work for an employer, if you're putting money in a pension fund, then they automatically top up the twenty percent, how you get the extra if you're a higher rate taxpayer is a bit more complicated than I'm doing big principal, so we'll move on. So that's the first big benefit, is that you're investing from pre-tax income.

• 12:21Martin Lewis?

  The second one is that if you are an employee, under the auto-enrollment laws, if you earn over around ten grand and you're aged twenty-two to sixty-six, you will automatically be paying into a pension and your employer must contribute too. The minimum amount is that you're putting in five percent of your salary and your employer is contributing three percent, there are rules about the exact amount you earn, but let's just go in principle again. So effectively, your employer is giving you more money. So let's just try and do some numbers on this. You're putting a thousand pounds in your pension. If you put a thousand pounds in your pension, your employer, give or take the qualifying, all that, is going to put in six hundred pounds on top.

• 13:05Martin Lewis?

  So you've now got sixteen hundred pounds in your pension, invested for your future with a long time for it to grow, which is always better. So hopefully you'll be at the benefit of compounding growth. The money will get bigger and bigger, certainly the earlier you start. You've got sixteen hundred quid in your pension, but how much has it cost you? Well, if you're a basic rate taxpayer, it's only cost you eight hundred quid in your pay packet. If you're a higher rate taxpayer, it's only cost you six hundred quid. If you're a top rate taxpayer, it's only cost you five hundred and fifty quid. So even as a basic twenty percent rate taxpayer, you're getting sixteen hundred quid in your pension. It's only costing you eight hundred pounds in take home pay. That is an unbeatable, manifestly winning investment.

• 13:46Martin Lewis?

  I mean, who else is getting double what they started with at no cost to them? So with those two things added together, I go back and we've done, you go and listen back to my podcast on pensions where we went to it in detail. But, you know, if you ask, you're asking me, are pensions are worth it? Yes, for most people with lots of caveats.

• 14:07Speaker 04

  Another question, you know, I like to put a fun one in every week.

• 14:10Martin Lewis?

  What are we doing this week?

• 14:12Speaker 04

  Would you rather be a fat Mick Jagger or a bald Rod Stewart?

• 14:19Martin Lewis?

  Maybe that person knows about my connection with Mick Jagger. There is a Mick Jagger connection here. So first of all, many people may not know that Mick Jagger studied accounting and finance at the London School of Economics in the 1960s. And he did two terms before he left to go and do his music.

• 14:36Speaker 04

  We in the same year.

• 14:38Martin Lewis?

  Matt, bring back podcast producer Simon. That was very rude. That was very rude. So anyway, when I went to the LSE. In 1991, and I was general secretary, president of the students' union in 1994, 95. And each year at the time, the LSE used to elect an honorary president, and it'd been quite, you know, controversial in the past. But in the year I was there, my entertainment sabbatical, who's a chap called Gary Delaney, who's now quite a well-known stand-up comic, he proposed Mick Jagger to be honorary president. And it was up against, I think it was Yitzhak Rabin and Mother Teresa, but Mick Jagger won. So Mick Jagger was elected honorary president,

• 15:20Martin Lewis?

  and we wrote, and Mick said, "We'd like to come and present you with the honorary presidency." And Mick Jagger said, "Yes, you're invited to come to Wembley. I'm doing a concert to come and meet me there." The LSE then said to me, because I was going with Gary, who was the ant sabbatical, but obviously I was leading it, "We would like you to tell Mr. Jagger that we never closed his degree, and he has only done two terms, and if he ever wants to, he still has a place to come and finish his accounting and finance degree." So I went to Wembley Stadium, we went to the VVIP area, and I went in to sit with Mick Jagger. And I walk in, and Gary, Gary walks in, and you know, it's all very cool in there. And Gary, well, I'll never forget it in my life, I hope Gary doesn't get annoyed with

• 16:02Martin Lewis?

  me telling this, but he walks in, and I walk in, and I shake Mick Jagger's hand.

• 16:06Speaker 05

  (singing) "Pleased to meet you. Hope you guess my name."

• 16:10Martin Lewis?

  Gary walks in and goes, "Hello, Mr. President!" Which is just like, I was just... So we sat in, and we start talking to Mick Jagger, and he tells that how when he left, his accounting and finance professor had said to him, "I doubt this music stuff will work out, so remember, you need to come back here and get a proper job." And we talked, and he talked about how he was scared to talk in the union general meeting at the LSE, and all on the back. Now, my favourite bit of this, and I understand this now, being in the public eye myself now, is sometimes you have meetings with people, then you get someone to come in after 10 minutes and say, "I'm sorry, you have to move on to something else," which is your way of getting out of it, which you often need to do. And someone came in after about 10 minutes and said, "I'm so sorry, you know, that's the time

• 16:53Martin Lewis?

  that we have to do." And Mick Jagger said, "No, I'm enjoying the conversation, it's fine." And we stayed in there for about 40 minutes, we had the VIP stuff, and it was absolutely wonderful. So out of loyalty to my university, and loyalty to the brilliant way Mick Jagger treated me when I was a 22-year-old or 23-year-old student, I'm Mick Jagger.

• 17:15Speaker 04

  And I've got a question from at Jezzer Bear on X. He's asking, can you put a personal loan into a cash ISA?

• 17:24Martin Lewis?

  What an interesting question. So I presume what you're saying is you've taken out a personal loan, you've got the money, can you save the money into a cash ISA? Well, those are two entirely separate products. A personal loan is a lending vehicle that gives you a set amount of money. Then you have structured repayments, you know, you'll be paying a set amount each month for three to five years at an interest rate. You then have that amount of money and it's up to you to do with what you choose. I mean, there are a few loans that ask you what you plan to do with the money when you got it out, but most don't. So let's assume that you, you haven't lied or done anything wrong on the application. You've got this set amount of money. Well, that's your money. I mean, you could go and put it on the horse races if you wanted to. I would strongly suggest you didn't. It would be a terrible thing to do with debt, but it's your money. So if you wanted to save that money into a cash ISA,

• 18:08Martin Lewis?

  a cash ISA is just a tax-free savings account. You know, you have easy access cash ISAs where you can put money in and take money out when you want. You have fixed rate cash ISAs. So yes, you could put it into a cash ISA. My big question though would be, why? If you have that money and you're not using it, the amount you earn on a cash ISA, there is no question that is lower than the amount the personal loan is costing you. Right? Because cash ISAs are paying four, four and a half percent. The cheapest loan on the market, even for a large amount is around 6% at the moment. And you'd have to have a great credit score to get that. So there's just no question that you're spending more money having the loan than you would earn in a cash ISA. So my question is if you don't need the money,

• 18:52Martin Lewis?

  then absolutely I'd be going back to the personal loan and saying, I mean, that there might be a couple of early redemption penalties over a couple of months. Can I pay you off? And I'd be paying off as much as you can off the personal loan to reduce your borrowing, rather than put it in a cash ISA. Now it may be that you've used the loan for some things, you've got a little bit of money left over that you need to spend on it in six months' time, in which case, holding it in a cash ISA isn't such a bad idea. But generally, I think you're making a mistake to do that, and would be better just to pay off the loan. Now, I should say as a caveat, there is a technique called stewzing that I've been talking about now for getting on for 20, 25 years. Stewing is where you deliberately borrow money at 0%, interest-free, and you put that in high-interest savings.

• 19:37Martin Lewis?

  So you're earning money, you're earning interest on money lent to you by someone else. And I always talk about my favourite bit of money-saving poetry ever, which is when the egg account, that many people who are older than you, Matt, will remember, not as old as Mick Jagger maybe, but older than you, and that is, the egg account, and okay, I'm doing it from memory, so forgive me if I'm not getting it right, the egg account was giving 0% for 20 months, and I took money from the egg account at 0% for 20 months, so I got a spending card and I used that card to spend on instead of using money from my bank account, to build up the debt that I didn't need, I had the money in my bank

• 20:15Martin Lewis?

  account, and then the highest-paying savings at the time was egg at 6%. So I then put the money I had artificially borrowed at 0% from egg into egg's own savings and made 6% interest on money egg had lent me at 0%. Now, in my world, that is poetry. Now, that's called stewzing, and it has to be done very carefully and deliberately, and you need to know exactly what you're doing, and you need to keep the money ready so that you can pay it off at any moment, but you can make quite a lot of money doing that if you do it right and you've got a stew's pot. But you can't do that with a personal loan, because a personal loan, there are no personal loans at 0%, and therefore, there's no point in doing it. So, can you do it? Yes. Should you do it? No.

• 21:00Speaker 04

  Okay, Martin, we've got another caller for you. You ready?

• 21:04Martin Lewis?

  Yes, indeed.

• 21:04Speaker 04

  Jonathan is in Bellic. Is that how you pronounce it, Jonathan, in Northern Ireland?

• 21:08Speaker 06

  That's correct, yes. Bellican for Manor.

• 21:10Martin Lewis?

  What can I do for you, Jonathan?

• 21:12Speaker 06

  Hi, Martin. Yeah, so my question is, myself and my wife recently bought a house, first time buyers here in Bellican for Manor. And we obviously paid the mortgage, you have to take out home insurance, which we did.

• 21:26Martin Lewis?

  You say, so they had a condition that you would take out home insurance, but you didn't have to take it out with them, did you?

• 21:32Speaker 06

  I didn't have to take it out with them, no, but it was actually a broker through work that arranged it the first time. So we went with them and it was, it was kind of a reasonably across the board in comparison with the other ones that we did see, it seemed normal. But the year has passed and I'm after getting the email from the company for the auto renewal. And it's increased from seven-

• 21:54Martin Lewis?

  Can we just be pantomime for a second? Can you say auto renewal again?

• 21:57Speaker 06

  Yeah, auto renewal.

• 22:01Martin Lewis?

  Carry on.

• 22:02Speaker 06

  Yeah, absolutely. And the auto renewal went from £717, which was what we paid, and they're proposing an increase to £1,469. So it's more than doubled. And my question is just, how has that happened? Now, just keep in mind, I have no claims. I haven't even been in touch with the company all year. It just doesn't make sense to me. I know we've had a big storm this year that did some damage to some houses in the area. But my question is just, how can that be justified, such a huge increase?

• 22:42Martin Lewis?

  Well, I don't think it can be justified, but I think probably the better answer is, does it have to be justified? No, we don't have price controls on home insurance. Now, actually, the home insurance market prices have dropped slightly over the last year. So my big warning to people this year has been, don't just settle for a renewal being at the same price, because you're then arguably, same on car insurance, I should say, arguably even if at the same price, you're effectively being ripped off, because you should be expecting- Reduction. Now, there can always be individual changes in risk profile that may be due to the macro weather effect that you've had. But I can't see that being worth justifying it two times. And the main lesson that comes from this is don't accept your auto renewal.

• 23:24Martin Lewis?

  You need to go and look for new insurance each year. Now, some people thought this was all over because, do you know what price walking is, by the way? Have you heard of price walking? I don't. No, I haven't. So price walking is basically each year when you get an insurance policy. They walk your price up a little bit at a time. So if you stay with the same insurer after five or six years, you will be paying forty, fifty percent more than the equivalent new customer. And that was always done. I mean, in your case, they haven't walked it up. They've gone sort of Herculean Superman leaps and bounded it up to double the price. And now we had legislation put in place a few years ago that said there was meant to stop this. It was called stopping the loyalty penalty.

• 24:08Martin Lewis?

  And what that effectively said is that existing customers should not be charged more than new customers. However, there was a baboon, there was a big but here. And the big but is that it is channel specific. And what that means is it's only existing customers going through the same method of a new customer who can be charged that price. So for example, for example, let's imagine we've got Matt here with us. If Matt had a comparison site and you were an existing customer who had gone to Matt's comparison site last year. You couldn't be charged more than a new customer going to Matt's comparison site this year. But you could be charged more than a new customer going direct. You could be charged more than a new customer going to a different comparison site.

• 24:53Martin Lewis?

  Now, you've gone through a broker, which is not a very big channel, if you see what I mean. So effectively, within where you are, you know, that rule just isn't that effective. Because, okay, they might be charging everybody who's gone through that broker more, but not necessarily everybody who's gone through a big. Different comparison site more. So I'm just explaining some of the logic why this may have happened. Obviously, I don't know the details, so I'm guessing and making it up. But the really big lesson is you need to go and start all over again. And I suspect you will find someone very substantially cheaper. If you get it for 700 quid last year, I suspect you'll still be getting it for that or even less this year.

• 25:29Speaker 06

  Well, we've actually have phoned around and the cheapest we've got is actually AXA NI, specifically AXA NI. They have a branch over in Northern Ireland and they've they're giving it for one, it's just over 1,000. But that's only because we also have our car insurance with them. You know, it's the multi-product offer. And that's after we seem to just it seems to be kind of worse over than that. Haven't done the comparison site yet, but you see, the thing is in Northern Ireland, they won't even quote, a lot of them won't even quote us. AXA NI tends to be the cheapest that we found.

• 26:04Martin Lewis?

  So it is interesting. It does sound to me, there's something I'm missing here about the situation going on because I can't see why it would have gone up 50% even on the cheapest quote. And maybe it is the storm that you talked about. It's an interesting.

• 26:18Speaker 06

  Yeah. Yeah, it's just one last thing just before we go.

• 26:21Martin Lewis?

  Have your neighbours had similar? Have you spoken to friends? Are they finding the same?

• 26:24Speaker 06

  I haven't because again, we don't kind of know our neighbours well enough yet. We haven't been long enough to pop that question. But it just seems across the board, insurance is strange at this address because when we moved 100 yards from the rental property, when we moved in, and we phoned up the car insurance to let them know change of address, they opted by 200 pound and just said that it's just the new address. So.

• 26:50Martin Lewis?

  Again, I would have always gone and done a comparison at that point, too. But you know what? In my world, I have to tell you, there's no better way than to walk across to a neighbour, knock on the door.

• 27:01Speaker 06

  Yes, that's true. That's true.

• 27:02Martin Lewis?

  And say, hey, I've just moved in next door and I'd like to know, has your home insurance gone up 50% this year? I mean, what an introduction. Who needs coffee?

• 27:12Speaker 06

  Yeah, true, true. I'll try that, Martin. Absolutely good idea.

• 27:15Martin Lewis?

  Thank you for calling and let us know how it goes. Do, please.

• 27:18Speaker 06

  Thank you for taking the call. Thanks, Martin. Bye.

• 27:20Martin Lewis?

  Cheers. Bye bye.

• 27:23Speaker 04

  Okay, Martin, we have had an email come through to the email address. Would you like to read it out so people know where to email?

• 27:29Martin Lewis?

  Well, I have it in front of me, but I know it from memory because I'm that good, Matt. The email address is [email protected]. Now, after we discussed last week that some people were saying, "Dear Matt", because ultimately the emails go through to you, you did send me one this week which started, "Dear Matt and Martin", and I'd like to say to our listeners, I think that's a more appropriate form of address than just building up Matt's ego.

• 27:52Speaker 04

  Well, I have to build up my ego as well. What I liked was it was,

• 27:55Martin Lewis?

  Because I need it.

• 27:55Speaker 04

  It was, "Dear Matt", and then in brackets, "and Martin".

• 27:58Martin Lewis?

  Oh, I see.

• 27:58Speaker 04

  So...

• 27:59Martin Lewis?

  Get on with it, you're still building your part.

• 28:01Speaker 04

  "Hello, PP Matt, Martin and team", the email starts. "I have a question regarding credit cards that I've never been able to work out the answer for, so please help. When you say you must pay off your credit card in full",

• 28:13Martin Lewis?

  IN FULL!

• 28:14Speaker 04

  "by the end of the month, when is the end of the month? If I purchase something on the 1st, then pay it off by the 31st? Does that make sense? However, if I purchase something on the last day of the month, do I have to pay it off that day to avoid any interest being added? Or is it 30 days from the date of purchase? Any clarification would be greatly appreciated. Many thanks. Phil."

• 28:35Martin Lewis?

  It's a very good question. I would urge you to forget the "the month" phrase. So I say, "Pay it off in full by the end of the month", because generally you have a monthly bill for your credit card, so I'm talking about the monthly bill, it's on a monthly billing cycle. In fact, what happens when you get a credit card, if you go to the summary box, you'll see this thing that confuses people that's called the "interest-free period". Now, the interest-free period, it's normally 40 days or 56 days or something of that ilk. Now, that is not the same as a 0% deal. A 0% deal is a long-term introductory incentive deal, either on spending or on debt shifted to the card. The interest-free period is basically how long, the maximum amount of time you could have after spending

• 29:19Martin Lewis?

  where you don't have to pay interest as long as you pay the card off in full. And that is the time by which you need to clear it. But depending on when you spend in the month, if you spend later in the month, you won't get the full period, you'll only get the remaining period. So it's something normally like, you know, depending on your billing cycle, can be 30, 40 days after the end of your billing cycle. It will be detailed on your statement. Honestly... Forget all of that. Set up a direct debit to repay the bill in full and it will be done automatically is by far the easiest way. And while we're on it, let me just explain why it's in full. Here we go. And I've done this under money mastermind with Adrian on the normal podcast, but it's very important.

• 30:02Martin Lewis?

  If I have a thousand pounds on my credit card and I pay off nine hundred and ninety nine pounds in a month, I do not just pay interest on the one pound I didn't clear. I pay interest on the entire thousand pounds for that month, even though I've cleared nine hundred and ninety nine pounds of it. But if I clear everything, the whole thousand pounds, there is no interest to pay. So there is a very big difference between paying off almost in full and paying off in full. Such a big difference. It's the type of thing someone would build a catchphrase upon. And shout down your ear every time. People, listen, I've had people in the street walk up to me and go in full.

• 30:47Martin Lewis?

  And so, you know, it's, it's, it may not be brucie bonus, play your cards right, but it's, it's, it's mine.

• 30:57Martin Lewis?

  That's it for this week's question time. Don't forget to subscribe so you know when we release a new episode. We're going to be putting out new question time pods each Monday alongside the regular podcast, which stays on a Thursday. Aren't you lucky? Two doses of money saving tips and tricks a week. Do make sure you send in your questions. Just email [email protected]. Take care.

• 31:37Speaker 07

  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.

• 32:17Speaker 02

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• 33:02Speaker 02

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• 33:27Speaker 08

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• 33:37Speaker 09

  It could be real exciting for the astronomical community, I guess, and for the whole world to see what Hubble really can do.

• 33:44Speaker 08

  From the BBC World Service, thirteen minutes travel with Hubble, the story of the Hubble Space Telescope. Listen now on bbc.com, the BBC app, or wherever you get your BBC podcasts.