Can you get £100s student loans back? | Are Premium Bonds worth it? | Car Finance mis-selling update

Martin Lewis asks are you one of over 1m who overpaid their student loan and can get it back? We are looking at the latest car finance update, which could double the number of people who are due a payout on their claims. The listeners ‘Tell Us’ about the best thing they’ve learnt about money from work. And a Mastermind looking at premium bonds…

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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• 1:12Martin Lewis?

  Hello, I'm Martin Lewis and this is the cunningly-named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, much of it comes from my BBC Radio 5 Live show with Adrian Charles, but don't worry, there's always extra bits just for you lucky, lucky podcast listeners, too. And we get to tidy up what went wrong in the original show to make it all sound a little bit smoother. In today's pod, are you one of over 1 million people who unwittingly overpaid your student loan in the last tax year? If so, it's easy to get money back. Some people get over a grand. More big car finance, misselling, reclaiming news. It could now impact twice as many people, even some who've already been rejected.

• 1:58Martin Lewis?

  Premium bonds, are they worth it? And crucially, what will you actually win? And finally, our tellers this week is all about what have you learnt about money from your work? Play the theme tune.

• 2:29Speaker 02

  That is the sound of Martin Lewis and Martin is demonstrating something that you don't learn at broadcasting school, that's looking up important stuff on a laptop, eating salad and now talking at the same time. That's the hat trick.

• 2:45Martin Lewis?

  That is the hat trick. I actually, I went to Cardiff School of Postgraduate, I did postgraduate studies in broadcast journalism. We were taught it in the third term only though.

• 2:53Speaker 02

  Really?

• 2:53Martin Lewis?

  They didn't, term one and term two, you weren't allowed to eat. Term three, it was how to stuff your mouth, have your lunch while you're doing a live radio programme.

• 2:59Speaker 02

  Okay.

• 3:00Martin Lewis?

  And I was a master.

• 3:01Speaker 02

  Okay, well, I can see that. So what are we talking about today?

• 3:04Martin Lewis?

  So in today's show, there's been another big announcement on car finance, misselling. I'll be talking you through exactly what that means. We're at the preliminary stage, so I'm not going into too much, and it's just an update of what's happening. The main subject, are you paying off your student loan? If so, over 1 million people who are paying off their student loan, overpaid in the last tax year alone, and many can get the money back. And millions more have overpaid in the previous year. So I'll be talking through the four different ways you may have been overpaid and can get the money back. The tellers. What's the best thing you've learnt about money from your work? That's what we want to know in the tellers. What's the best thing you've learnt about money from your work? And mastermind, the question Adrian is going to be on?

• 3:49Speaker 02

  Uh, go on.

• 3:51Martin Lewis?

  Premium bonds. And it's actually, I can't give too much away, it is a very important listen for anyone who has premium bonds, which by the way, is over 22 million people and there's over a hundred billion pounds in premium bonds, the UK's biggest form of savings. But it's an important listen if you've got premium bonds or you're thinking of getting premium bonds, because after Adrian's given his answer, I will be doing an explainer that's important to know. But I can't actually tell you that much about it because I can't give the answer away. Just listen if you've got premium bonds, okay?

• 4:17Speaker 02

  Yes.

• 4:18Martin Lewis?

  Let's not ruin the format.

• 4:19Speaker 02

  Listen, even if you haven't got premium bonds, it's the best in public service broadcasting. Do join in.

• 4:27Martin Lewis?

  Now, just to really make the listeners exciting, one of those things I learnt in my third term at my post-credit card about eating is when they play the music sting, that's when you pick the bits out of your teeth before you carry on, which I just did very well. So I'm raring to go.

• 4:41Speaker 02

  I never did that eating and broadcasting course. Hence, I was never taught it. Hence, I've had some terrible choking incidents on it. And it's been ugly, the Heimlich manoeuvre on air and all sorts of things.

• 4:55Martin Lewis?

  I met him once.

• 4:56Speaker 02

  All sorts of things. So where do we start? Car finance?

• 5:01Martin Lewis?

  Yeah. Okay. So, massive announcement on car finance yesterday from the regulator. The story so far, back in January, the regulator, the FCA, made an announcement that it would be investigating historic misselling of car finance arrangements, specifically what are called DCAs, discretionary commission arrangements. That's where brokers were allowed to increase the interest rate they charged on car finance. So we're talking higher purchase and PCP deals. And if they increase the interest rate, they got commission and you weren't told the interest rate was increased. So it's being looked at as a transparency and fairness

• 5:41Martin Lewis?

  issue. Now, we're talking about car finance bought before the 28th of January 2021. I, on the back of that, launched a tool to help people facilitate reclaiming. Just to put in context how big this is, we have had 2.5 million complaints go through that tool since January, so that people can complain for free and they don't need to use a claims handler. Now, that was discretionary commission arrangements were in place on about 40% of car finance deals. Then, and we're on hold and we're waiting for the FCA to research, and that was what was going on. Then, two weeks ago, this bombshell announcement from the Court of Appeal came in. And the Court of Appeal said...

• 6:22Martin Lewis?

  In a ruling about a car finance case taken by claims handlers that consumers need to know all material facts, including the amount of commission when they were being given car finance. But that wasn't just on discretionary commission arrangements, that was on all commission arrangements. Now, it also has a read across to other areas in the financial world. And when I say a bombshell, I mean, I couldn't quite believe it myself that they're denouncing this. It seems, it seems, you know, pretty extreme. Clearly, I mean, it's not actually been agreed that it'll go to the Supreme Court yet, but it will go to the Supreme Court and it will, that and it will be appealed and the Supreme Court can overturn that decision. So what happened this week, what was announced

• 7:07Martin Lewis?

  yesterday on the back of all that is the regulator, and I think they were blindsided by this court decision just as much as everyone else, has announced that it will be extending the hold period for firms to have to deal with these complaints, which was in place anyway when it was making, I'm still, I was always saying, get your complaints in, but we didn't expect them to answer you, just to tell you, yes, you did have a DCA or you didn't have a DCA. But crucially, it now says it's extending that hold for all car finance commission complaints. So previously, we were just talking about those with DCAs. Now they're talking about all the others, including fixed commissions, which is the

• 7:45Martin Lewis?

  rest of the 60%. And my reading of that is, it is effectively paving the way that if the Supreme Court rules the same of the Court of Appeal, to widen its investigation on mis-selling and to allow everyone who has had a car finance deal where the commission wasn't declared to you, which is pretty much all of them going back, to put in a complaint if the Supreme Court rules. So this is a real change in shift, a real shift in approach from the FCA. It's now saying, this isn't just about those discretionary commission arrangements, this is about...

• 8:21Martin Lewis?

  All car finance, or potentially about, but it's all going to wait until the Supreme Court rules.

• 8:26Speaker 02

  Okay, can I ask you just one thing?

• 8:29Martin Lewis?

  Yeah.

• 8:30Speaker 02

  If I was caught up in that, I would assume it was tough luck because whenever I took it up, I would have, there would have been a whole reams of legalese and they would have said, "Sign here", and you do what 99.9% of people do when faced with reams of legalese like that, you just sign it because you couldn't understand it if you read it. Now, would that, would that have been any protection for them that I had signed it? Or is it just deemed unfair, so it doesn't matter what you sign?

• 8:59Martin Lewis?

  Well, not, not according to the Court of Appeal, no. And, and this is what's been, I mean, look, this has seen share prices dropped. Even I, as somebody who champions consumers professionally for my living, I think this Court of Appeal ruling is, is quite extreme. So I think the discretionary commission arrangements, which is where there was hidden commission arrangements, your interest rate was pushed up without telling you, right? And therefore you weren't getting a standard rate of interest, you would be giving more and you were not declared to you. You can see the argument of a lack of transparency and restriction in consumer choice from that, which is why I've been, you know, facilitating people to complain.

• 9:41Martin Lewis?

  But when mulling this ruling, which puts it to all commission, I find it more difficult to see the unfairness and that redresses due on car finance firms that did fix commissions that were following the regulator's rules. And even if it is then thought that redresses due, then they surely must be a test, something like, was it hidden that there was commission? And was, most importantly, was the commission excessive? But we're just not in the position where we know any of that yet because the regulator will only put the rules in once it knows what the Supreme Court says. And you can imagine, so, I mean, this, this, look, the reason I am concerned about it...

• 10:25Martin Lewis?

  Is this, I'm really honest, it is potentially, if it were interpreted at its most extreme, an existential threat to consumer lending that could see both availability reduced and higher costs in future. Not the DCA bit, but this reading of the Court of Appeal. So, I mean, the conversations I've had privately with firms, with senior people, regulators and politicians, everyone is just going, "What? What?" And I, when I went, "What? Is that what they're really saying?"

• 10:58Speaker 02

  There could be unintended consequences.

• 10:59Martin Lewis?

  There could be. So, let me just, I just want to update what you should be doing. If you put in a complaint, now, one of the reasons the DCA is so important is, you were not told if you had a discretionary commission arrangement, the only way to know if you had a discretionary commission arrangement is to put in a complaint. And in my template, the first thing I ask is, "Did I have a discretionary commission arrangement?" And if I did, then I want to put a complaint in. And about 40% of people did. So, if you, people should be checking if they had a DCA. What this ruling from the Court of Appeal and the FCA means, for me, is it is more likely if you had a DCA, you will be paid out, but it's also more likely it's going to take longer for you to be paid out, because everything will be delayed. Then we get on the question of, should you be putting in

• 11:41Martin Lewis?

  a complaint if you didn't have a DCA, you just had commission? Or if you put in a DCA complaint and they said, "You don't have a DCA"? Well, I mean, the regulator seems to be indicating yes, but the consultation period is two weeks, and then it will take them another two weeks to put it in place. Frankly, when they do a two-week consultation, that's, you know, a dot, a box ticking exercise, the consultation, this is going to come through. We will do a full programme, and I'm planning, see, I'm not going to 100% promise, I'm planning to do a full programme, once I have all that details on what you should do. My holding position is, keep going with your DCA complaints, with other complaints, let's just wait and see the result of the regulator's consultation in four weeks' time, and then I will explain

• 12:25Martin Lewis?

  to you what your options are. But I will countenance it, that, you know, at its extreme, this could break the financial system. And so, I am, I'm torn. I'll facilitate people in putting their complaints in, because that is what I do in my job, but I do want to, as an issue, I worry that this next stage risk being counterproductive to consumers.

• 12:46Speaker 02

  Student finance then. We talked at length last week, but there's more. Go on.

• 12:53Martin Lewis?

  Well, yeah. So we're now, last week was about people at or going to university. This is all about university leavers. This is for people who are paying off their student loan, which is millions of people, you know, people in their twenties, thirties, forties, fifties and sixties in some occasions and older. So what's important to understand is your student loan, like tax, is repaid via the payroll. And what you pay, like tax, depends on what you earn.

• 13:23Speaker 02

  So your employer takes it and pays it.

• 13:26Martin Lewis?

  And just as millions can reclaim tax overpayments, and some millions have been underpaid tax as well, many university leavers can reclaim unwittingly overpaid student loans. If you volunteer to overpay it, you can't reclaim it. But if you unwittingly overpaid it, then you can. Now, each year, we do a request of the student loan company to find the numbers. In the 2023 tax year, there were 1.1 million overpayments in that tax year alone, and that is a similar scale to previous years. So over the past five years, you're talking about five million overpayments. Now, some people can be overpaying more than one way. My guess would be you're talking about four million people who have overpaid their student loan. And you can get this money back. And I talk about this each year,

• 14:11Martin Lewis?

  and people get, it's very easy to get the money back. People get it through at absolute speed. So what I want to do is talk through the four different reasons you may have overpaid the student loan.

• 14:21Speaker 02

  So it's done through payroll. What about if you're self-employed?

• 14:25Martin Lewis?

  Well, if you're self-employed, then you should have done it through the self-assessment system. And generally, it will be much better because you're paying on, you're looking at it annually. One of the, one of the reasons that some of the problems happen is you're paying at the wrong time, or, and I'm going to go through all of them, or that it's the month, the interaction between it being taken monthly when what you pay is what you pay annually. So self-employed, it's less of a problem. It's not impossible that it's a problem for the self-employed, but it is less of a problem.

• 14:52Speaker 02

  Let's bring in Michael in Chester. Come on, Michael. Let's, let's be having you then. What have you got for Martin?

• 15:01Speaker 07

  Hello, Martin. Hi, Adrian. So I listened to the show last week and also the coverage on Moneybox. And I have a plan to. Student loan and based on what I'd heard from yourselves, I put in a request for a refund. And fair enough to F L C, they did provide the refund very quickly within three days of the amount of over fifteen hundred pounds.

• 15:27Martin Lewis?

  Well done, nice and easy. What was the reason you overpaid?

• 15:30Speaker 07

  I think there must have been a couple of minor breaks in my employment because more or less I've been working since I studied back in two thousand and twelve for one year. So I was surprised about the amount.

• 15:43Martin Lewis?

  I suspect you're a reason one, as I'm going to come on to in a moment.

• 15:47Speaker 02

  But how, but to what extent, I'm thinking, Michael, to what extent is Michael lucky that he's so, not lucky, clever enough to spot this? Now, how many Michaels are there out there who might not have spotted?

• 16:00Martin Lewis?

  One point one million overpayments last year, that's why we're doing the programme on it. Now, I have to say, I did it on my telly show in brief and I've done it on social media in the last couple of weeks. And I did a video last year that went viral with ten million views. And I have had thousands of responses about this one. I mean, Kelly, followed your advice about checking with this student loan company if I'd overpaid, they're refunding me eight hundred and forty quid, which could not have come at a better time, given an expensive vet bill coming up. I'd have never known this was a thing, so I've set an annual reminder to request it. So, and last year, quarter of a million people requested refunds because I've been campaigning on this for a while, and I'm sure other people have too. And almost sixty two million people was paid back. So you're right, that's why we're doing it. We're talking about it. So you know, shall we get on to reason one?

• 16:44Speaker 02

  Okay, just, yeah, just Michael, you still there?

• 16:47Speaker 07

  Yes.

• 16:48Speaker 02

  So, did you ask the question, hang on, why was I overpaid in the first place? What, you know, what are you playing at, kind of thing? Why am I having to bother with this?

• 16:56Speaker 07

  Well, it did kind of occur to me, especially based on the amount that I reclaimed back. I'm on a reasonably good salary at the moment and have been since I graduated. But I wasn't paying a large sum each month, a couple of hundred pounds, I think. So I was quite surprised at how much they were sending back. And it does worry me more widely about people who are more vulnerable to financial strain, who do need the money, including people that I think you've spoken to. So it's quite concerning. And I think the fact that F L C is not able to manage this more proactively is a worry.

• 17:34Martin Lewis?

  I'm going to defend them to an extent, right? And we're going to talk about this later on. But for some people, you don't want to reclaim your overpayments. This is not a blanket that overpaying is always bad for you. This is good for some people and bad for other people. And I'm going to tell you who's in different categories. So it's, it's the idea that if you overpay, you should automatically get your money back is a bit confusing. And this frankly is because of the structure of the system that relies on your payroll office, HMRC, feeding through to the student loan company and your student loan account. And it is the complexity. And I think if we do reason one, you will start to see where this comes from. So reason one.

• 18:14Speaker 02

  Okay, let's just say bye to Michael. Thanks for that, Michael. All the best. Go on, reason one.

• 18:18Martin Lewis?

  Reason one is you repaid the loan in some months despite not earning enough in the year. And this affected in the last year, this is the big one, 1,064,211 people in the last tax year. So this is the one you really got to get. So student loans only need to be repaid if you earn over an annual threshold. What that threshold is gets complicated because it depends on which of the five student loan plans you are on, which depends when you started. So let's take the biggest one, which is Plan Two. Plan Two is for people who started university in England between 2012 and 2022 and started university in Wales from 2012 onwards.

• 19:03Martin Lewis?

  So that's the most people are on that. On that Plan Two, and you can look at, in fact, I'll do in a second all the different plans. It'll be boring, but it's important to get it out there. On Plan Two, you have to repay if you earn over £27,295 a year. If I had that by 12 and you get £2,274 a month. So here's how you overpay. You earn over £2,274 a month and you're on Plan Two. 9% of that amount is taken from you, but you don't earn over the £27,295.

• 19:37Speaker 02

  For some reason, your income drops.

• 19:38Martin Lewis?

  Well, you might only work, have worked half the year. You might have a commission based arrangement where in one month you get a disproportionate income. So you go over the monthly threshold, they take 9%. But you're not over it in the year. So you can understand how common this is. You have a week, you have a month where you're not working. You take a break, you have a lower income because you reduce your hours, all of these reasons. So the nine percent is taken on a monthly basis. But you only have to repay if you pay over the annual amount.

• 20:07Speaker 02

  Okay, so why doesn't the alarm go off when they get to the end of the tax year, whoever that is, HMRC or whatever, say, oh, uh-oh. They've paid some back, but they shouldn't have done, so we need to give them some back.

• 20:21Martin Lewis?

  Well, technically, the rules say they should have done the payment, but they don't need to do the payment. And I go on to this point, we'll explain later, that for some people, overpaying is good. Now, SLC do give the information. Yes, you're right, we could move to it. Look, let's be real, let's cut to the chase, I wasn't going to talk about this. There is nothing more rigorous and badly structured than the way we take student loans in this country. There are hideous issues for the way that we assess them with step parents living in households. The problem that you've got is the student loan system is based on a statute that no government wants to touch because it's such a political hot potato.

• 20:59Martin Lewis?

  So we're left with the system that we've got. And I have tried to tweak its nipples over the years with suggestions of ways to improve it and to make it better. Of things that can't be done by statutory insurance. It's such a super tanker to make it move. It works the way it works, and we've got to work within the system. I'll let other people justify it. I'm going to focus on explaining to you what you need to do, you know, what people need to do for themselves. So let me just do, and so that is the big reason. The big reason is you have variable income, or you have commission, or you work part of the year. And therefore you weren't under your threshold, but you were paying it in the month. Let's just do those thresholds. Are you ready?

• 21:37Speaker 02

  Yeah.

• 21:37Martin Lewis?

  Boring radio, but I'll try and do it quickly. You can slow it down if you're listening.

• 21:40Speaker 02

  You're never boring.

• 21:42Martin Lewis?

  Okay, if you started in England between 1998 and 2011, or you started in Wales between 1998 and 2011, or you started in Northern Ireland from 1998 to today, including Northern Irish postgrads, you are on Plan One, which means your annual threshold is £24,990 a year. I've done Plan Two loans already. If you're in Plan Three, which is English and Welsh postgraduates, your repayment threshold is £21,000. If you're on Plan Four, which is Scottish starters from 1998 to today, including postgraduates, your repayment threshold is £31,395 a year. And those on Plan Five, that this will not be relevant to, because this is English starters

• 22:27Martin Lewis?

  from 2023 onwards, and therefore they won't be in the position that they're paying yet, then your repayment threshold is £25,000 a year. Those are the key thresholds.

• 22:37Speaker 02

  Right. Soph's question then, is there a minimum or a maximum time to re-enrich the refund?

• 22:45Martin Lewis?

  No, you can go back as far as you like. If you've overpaid, you've overpaid. I think once you... If your student loan is clear, I wouldn't bother, because actually, in that particular circumstances, you wouldn't want to claim back anyway. For that reason alone, you can log into your student loan company account online and request a refund. Now, you can definitely do that for any year before 2022/2023 tax year. For the 23/24 tax year, it depends on whether HMRC has updated your figures, so some will be able to, some won't be able to. If you can't, then you should get a notification from the student loan company when HMRC updates your figures, and that is the moment to check. You can't do it for the current tax year.

• 23:27Martin Lewis?

  But basically, reason one, because it's so big, they've now built an online system in the student loan company when you log into your account, in order that you can claim that back. All the rest of the reasons, you need to call up the student loan company. The one point I wanted to get across here, if you overpay in a month, but you earn over the annual threshold, you can't reclaim.

• 23:54Martin Lewis?

  Right?

• 23:54Speaker 02

  Right.

• 23:55Martin Lewis?

  Let me try and give you an example because that sounds quite.

• 23:57Speaker 02

  But why would you think you could?

• 23:58Martin Lewis?

  So, let's imagine, we'll go back to Plan Two. You're allowed to earn £2,274 in a month.

• 24:06Speaker 02

  Yeah.

• 24:07Martin Lewis?

  You pay over that and you can earn a total of £27,295 a year. Let's imagine you earned in total £27,296. Right? You're one pound over the threshold. How much would you say you should pay? It's 9% of over the threshold. So it's 9p. But now let's imagine that you were earning £1,500 quid a month, but you got a bonus in one month and in that month you earned £6,274, which is £4,000 above the monthly threshold. They would have taken 9% of £4,000. Right? Which is 360 quid.

• 24:46Speaker 02

  Yeah.

• 24:47Martin Lewis?

  You are only one pound over the annual threshold. You think you should be just paying 9p.

• 24:52Speaker 02

  Yeah.

• 24:53Martin Lewis?

  But you have to pay the 360 quid. So if you have disproportionate earnings in a month, you still have to pay 9% of that month's income, even though you were only one pound above the annual threshold. That's why people get frustrated.

• 25:08Speaker 02

  And that's, you can understand the annoyance.

• 25:10Martin Lewis?

  You can understand the annoyance, but the rules are in that case, it's 9% of your monthly threshold is what they take. So the binary thing here is if you're above the annual threshold, you pay what you pay. If you're below, you can get it back.

• 25:25Speaker 02

  Okay. Shall we, should we do Reason Two?

• 25:27Martin Lewis?

  Reason Two, lovely Reason Two.

• 25:28Speaker 02

  Reason Two.

• 25:30Martin Lewis?

  Reason Two is very simple to understand. You are on the Wrong Student Loan Payment Plan by default. It's quite a small one, this. It's affected 20,575 people in 2023-24, but it's a good one for current students to understand. If your firm does not know which repayment plan you are on, and remember there are five different plans, always different thresholds, the government tells it to default to Plan One, which is repaying above around £25,000. So if you are on a Plan Two loan where you should only be repaying above £27,295, you will be repaying too much because it's taking your money as if you were repaying

• 26:13Martin Lewis?

  above £25,000 because the default setting's been used. If that happens to you, you should A, speak to your payroll to fix it, and B, you should call the student loan company to reclaim past overpayments. So know what threshold you're on and make sure your employer knows. Salad update.

• 26:33Speaker 02

  See, I think Martin has messed this up because he's still eating, he's putting salad in his mouth, he should have chewed and swallowed by now.

• 26:41Martin Lewis?

  I've got three mouthfuls left and I haven't had lunch. And I'm a nicer person when I've eaten, like most people.

• 26:46Speaker 02

  Okay, I'll talk for a bit. I'll say we're going to talk about your tell-uses. Martin wanted you to tell us about what you've learnt about finance and various jobs you've done.

• 26:57Martin Lewis?

  I'm done, I'm done.

• 26:59Speaker 02

  No, you're not because it's still in your mouth. You've got to, I'm not, you don't rush it.

• 27:02Martin Lewis?

  I'm having a sip of water.

• 27:03Speaker 02

  Because I can't start doing mouth-to-mouth or manoeuvres on you, on air.

• 27:07Martin Lewis?

  Seriously, if that's the only option, I'm just, I'm happy to go. I've had a good one, I've had a good innings. I've had a good innings, let's just leave it there.

• 27:14Speaker 02

  Okay, student finance. Reason three that you might be overpaying, you started repaying too early.

• 27:23Martin Lewis?

  Correct. You're usually only eligible to start repaying in the April after you left your course. Now, for most people who graduated, that means nine months after you left your course, you leave in the June-July, and it's the following April in which you need to start repaying. If your employer is unaware of when your study's finished, or they get it wrong, you could have repaid too early. This was the second biggest category, this affected 59,251 people in 2023-24. If that has happened, well, clearly if you're still in the nine-month period and you're paying, speak to your employer to stop paying. But if you're not, then this is a phone up and call the student loan company to get your money back. Quite a simple one.

• 28:07Speaker 02

  Okay, there's a question here, just, I don't know how complicated, there's somebody sat down at the beginning with all this. Said, how complicated can we make this? A question from Mrs. H. Hoy. I've been living abroad and repaying. Based on the complicated calculations they do, based on average salaries. Of that country in which he's living. I've definitely overpaid, but unsure if this can be claimed back. Once moved back to the UK permanently. So. So are they looking, I mean, say she's, I don't know where she's talking about going, Singapore. So is the student loan company looking at. Pay slips from Singapore then?

• 28:48Martin Lewis?

  So, this is a really interesting question. When you go abroad, people often say to me, is it true you don't have to repay your student loan if you're abroad? No, it's not true. You are have to, where you are, your student loan, one of the reasons it's technically not a tax is it's a contractual arrangement. You, you, like any form of loan, and it's enforceable by the courts as a contractual arrangement. So you have a contract to repay, what you repay is based on your earnings. If you move abroad, then they do average earnings of the country. So interestingly, if you were to go to a country that has very low income, then your repayment threshold will be very low. If you go to a country that has a very high income, your repayment threshold will be very high.

• 29:28Martin Lewis?

  The difficulty is enforcement for the student loan company. How do they enforce people who are living in other countries to pay? And many people, especially, this used to be in the old days where we had people come from the European Union. And they were getting UK home undergraduate loans, but then went back to Europe, it was difficult to enforce it. So. The honest answer is, if you leave the UK and you will never return. Well, enforcement would be very difficult, but if you leave the UK for a couple of years and come back and haven't paid, expect them to come after you. For the payments that you should have made while you're away. So, you know, the sensible thing to do, and I should say the right thing to do, it's a contractual relationship with the government that you have to repay this loan is to. You set up a direct debit based on what you're paying, but it's based on a particular threshold.

• 30:15Martin Lewis?

  So that's how it works.

• 30:16Speaker 02

  So is there somebody at the student loan company then with a spreadsheet of average salaries in every country in the world?

• 30:22Martin Lewis?

  Yeah, it's published.

• 30:23Speaker 02

  And it's a moving and it's a.

• 30:25Martin Lewis?

  It's published and it varies depends on which plan you're on because it has to be the equivalent of the plan here. You can you can go online, you could Google, there's a PDF that you can download with that information in country by country.

• 30:38Speaker 02

  Wow, reason four.

• 30:40Martin Lewis?

  Reason number four is a problem because I've just clicked my wrong document.

• 30:44Speaker 02

  You had money.

• 30:45Martin Lewis?

  Tell me what it is and I'll remember what it is.

• 30:46Speaker 02

  You had money deducted.

• 30:48Martin Lewis?

  Yes.

• 30:48Speaker 02

  After the loan was fully repaid.

• 30:50Martin Lewis?

  Okay, so this affects 37,722 people. The loan, the student loan is wiped after a set time. For many people currently repaying, that's 30 years, but it isn't always 30 years. For those who've started since 2023 in England, it's now 40 years, as we discussed in last week's podcast of how student finance works. However, because of the problems with interaction between payroll to HMRC to student loans company, sometimes the HMRC is not updating information to the student loans company that you've paid, so student loans company is still, you're still paying even though you have now paid off your loan, in which case you will be automatically repaid. But the best way to prevent this, a really important tip, in the last couple of years

• 31:35Martin Lewis?

  of your repayments, you are allowed to switch away from paying via PAYE and instead pay by direct debit. And in that case, that should stop you overpaying.

• 31:46Speaker 02

  Okay.

• 31:46Martin Lewis?

  So only in the last two years.

• 31:47Speaker 02

  But why would you have fully repaid? I don't understand.

• 31:49Martin Lewis?

  Because you're paying 9% above a threshold once, so not just for the 30 years, also because you've cleared, because you've cleared what you are.

• 31:56Speaker 02

  Well, that's all right. Well, we haven't got to the 30 years yet.

• 31:58Martin Lewis?

  Well, so we haven't, so we'll.

• 32:00Speaker 02

  Yeah, it's okay.

• 32:00Martin Lewis?

  Well, let's imagine that you are, you only owe a thousand pounds and you're paying off 1,200 pounds, you're paying off.

• 32:06Speaker 02

  Because you're earning so well, okay, yes.

• 32:08Martin Lewis?

  Yeah, so and therefore you've overpaid in that period.

• 32:11Speaker 02

  Okay. Gareth says, I earn over the threshold and have overpaid on numerous years through our PAYE. What are my options?

• 32:18Martin Lewis?

  Well, I would think that's a reason one question. If you've overpaid, your phrasing was overpaid on numerous years. If you have overpaid in a year, as I discussed earlier, because that you had variable income, but you still earn more than the threshold in a year, you cannot reclaim. But if you have overpaid in a month and are below the annual threshold, you can reclaim. If I were you, I think you're very likely to be a reason one issue. I would go to your student loan company online account. I would check your online account to see what you've paid and I would request an overpayment if you have repaid.

• 32:53Speaker 02

  Okay.

• 32:54Martin Lewis?

  With a caveat, if that's right for you.

• 32:57Speaker 02

  End question you've got there. Talk.

• 33:00Martin Lewis?

  Well, what is it?

• 33:02Speaker 02

  This is Reza, or Rezo you pronounce it. The student loan company said, if I claim the refund, my current balance will increase. So what is the benefit of claiming the refund?

• 33:15Martin Lewis?

  Absolutely right. And that is what the student loans company tell you. If you claim the refund, of course, your balance will increase. Well, that makes perfect sense. Right? The reason your balance will increase is you, let's do simple numbers. You owe them £50,000 and you've repaid £10,000. Well, if 2,000 of that shouldn't have been overpaid, then your balance won't be £40,000, it will be £42,000.

• 33:38Speaker 02

  Yes.

• 33:38Martin Lewis?

  That's what your balance increases means. It doesn't mean you're going to be punished for it. It just means if you're taking the money, then it doesn't count that you've paid that amount off. So that's very simple. So normally with any other form of loan, I would be encouraging you to pay it off as quickly as possible and to overpay because that will reduce the amount of interest that you will pay. That would be my standard money saving mantra for everyone. But as we discussed in last week's show, the student loan does not work like other loans. It is more akin to a form of grad, limited time period graduate tax for most people, but not for everyone. So let's work through this. I'm again going to focus on people on Plan Two loans, which is the majority of people who have outstanding

• 34:22Martin Lewis?

  loans, 2012 to 2022 starters in England and 2012 starters in Wales onwards who repay above £27,295. The stats currently show.

• 34:33Martin Lewis?

  It is predicted only four in five of those people will repay their loans in full before it wipes after 30 years. Sorry, only one in five, four in five won't repay in full, one in five will repay in full within the 30 years. For the four in five who won't repay in full, if you were to reclaim an overpayment, because you will still just simply be repaying 9% of everything you earn above the threshold for the next however many years you've got left, 25 years or so, then reclaiming an overpayment doesn't change

• 35:16Martin Lewis?

  what you pay in future, because you're just paying this 9% for the remote until you hit 30-year schedule. So if you take the money back in your pocket, it is real money in your pocket, because it doesn't impact what you're going to pay in future at all. Does that make sense? If you're in the one in five who would be clearing in full, then reclaiming your overpayment means that the interest that you pay in total will be bigger because you won't repay as quickly and the interest will add up. So the big question here is, are you likely to repay in full on the student loan before it wipes? Now, that is a function of how much you originally borrowed, which particular repayment threshold you're on,

• 35:56Martin Lewis?

  and how much you earn. So, in very simple terms, low to medium, most people who are low to medium earners, especially on the English system where you borrow more, you will not repay in full, therefore taking the money back and putting it in your pocket is likely to be a complete gain. You simply, it's an absolute net money back in your pocket. I mean, there's a moral issue should you be taking out of the system, I'll leave that for other people to deal with. For medium, high to high earners where there is a chance that you may overpaying may cost you more interest, then we have to move on to the second question. The second question is, do you have a better use of your money than overpaying a student loan?

• 36:40Martin Lewis?

  A classic example would be the nurse who got in touch with me the other week to say that she had overpaid and was using the overpayment to clear her expensive overdraft. An overdraft is 40%. The student loan is way cheaper and has much better terms than any form of overdraft you're going to get at Sir Ballyluteley. Even if you would clear in full within the 30 years, I would be taking that money and taking it off my overdraft, possibly paying off, getting a bigger deposit for a mortgage to reduce the interest that'd be paying on a future mortgage, possibly so that I don't have to get a car loan because it just gives me enough money that I wouldn't need a car loan, which is more expensive than the student loan type of debt and has worse repayment terms. So I really, I would sort of couch this into two levels. Question number one, will you materially gain and actually just gain more money from

• 37:23Martin Lewis?

  overpaying because you wouldn't clear in full before your loan wipes? If the answer is yes to that, you definitely want to get the money back. If the answer is no, move on to number two, which says, what would you do with the money? If you are just going to splurge on it because you've got enough money anyway, I probably would not be taking my overpayment back. But if you have a good use for it, which will improve your finances, such as clearing an expensive debt or getting money so you don't have to borrow an expensive debt in future, then I would probably take the money out. Have I managed to explain that in a way that makes sense? You have. Good. Now, we're about to go into the mastermind question with Adrian, which is all about premium bonds.

• 38:05Martin Lewis?

  Of course, with him, I couldn't do a pre explainer of premium bonds before I ask the mastermind question because that would defeat the entire point. But by the joy of being able to edit into a podcast, I'm now going to do that with you before we get to the mastermind question, which is about premium bonds. Premium bonds are a form of saving operated by NSNI, that used to be known as National Savings, which is the government-owned financial institution, which means it's as safe as it gets because all other savings accounts are backed up to £85,000, effectively by the government backing them up. This one is totally backed up. Every penny you've got in there is backed up by the government. The only way you could be in a problem is if the government went bust when we'd all have bigger problems. So that's NSNI. Premium bonds, been around a long time,

• 38:50Martin Lewis?

  are a form of saving where the capital that you put in is safe. In other words, you're always at worst going to get your money back. But the interest that you get is determined by a prize draw. Each individual bond goes into a prize draw and has a chance of winning an amount of money, from £25 up to a million pounds. And that's what dictates the interest that you get. So your interest is a gamble, but your money is totally safe. Nothing like the lottery where you won't get any money back if you don't win. This way, every penny you put in is totally safe. It's an incredibly popular form of savings. Now, there are many myths out there about premium bonds. I often get asked, I've had my premium bonds a long time,

• 39:35Martin Lewis?

  they haven't won anything. Will I be better off buying new bonds because they seem to win more? Complete urban myth. Every bond has the same chance of winning in the prize draw as every other bond. The reason more new bonds win is because there are more new bonds. Because when people were buying these bonds in the 1960s and 1970s, they were buying £1, £10, £20 worth. Now, people are buying £500, £1,000, £10,000 worth. So there are just simply more new bonds. So more new bonds win more often. And there is also, similarly, there are urban myths about people in different areas winning more. That tends to just be a function as people in those areas have more premium bonds. So that's my quick warm-up on premium bonds

• 40:18Martin Lewis?

  that Adrian did not get on Mastermind. And now, I think, we should play the theme tune.

• 40:31Martin Lewis?

  For those who don't know Money Mastermind, it's I ask Adrian a question each week. He currently, in the three option multiple choice, has got two right and four wrong. Which means, Adrian, you have now gone on to as good as a monkey picking at random because it's three option multiple choice, you got two right and four wrong.

• 40:47Speaker 02

  Okay.

• 40:48Martin Lewis?

  The question, here we go.

• 40:49Speaker 02

  I'll settle for that, to be honest.

• 40:51Martin Lewis?

  Okay, well, you might be worse than that after today. Now, there are a few very highly ranked poker players in public life. Victorian Corin Mitchell of Only Connect fame and Tony Bloom, Chair of Brighton Football Club, are both ranked in the top 100 England money winners. Yet, ladies and gentlemen, what few people know is that Adrian Charles is ranked number one in the Adrian Charles Household Poker Rankings when his wife isn't playing. So, using that incisive gambling knowledge of probability and odds, Adrian, what I would like to know this week is this.

• 41:30Martin Lewis?

  If you put £1,000 in premium bonds at the current prize fund rate of 4.4%, which is dropping to 4.15% for the next draw, we're ignoring that, we're ignoring that, we're just sticking on the current prize fund rate of 4.4%, how much would you expect to win with typical luck over the next year? So, you put £1,000 in, let's imagine the rate stays at the 4.4% prize fund rate, how much would you expect to win with typical luck over the next year? A: £50, B: £25, C: Nothing.

• 42:12Martin Lewis?

  4.4% prize fund rate, you've got a grand over a year, is it A: £50, B: £25, or C: Nothing? Everybody at home, I'd like you to say your answer to yourself, either in your brain or out like now.

• 42:26Speaker 02

  Well, I mean, that's not the answer I've written down, I don't understand.

• 42:28Martin Lewis?

  What's the answer you've written down?

• 42:29Speaker 02

  Well, £44.

• 42:33Martin Lewis?

  Your three options are A: £50, B: £25, C: Nothing.

• 42:35Speaker 02

  Can you see my logic?

• 42:36Martin Lewis?

  I do, you've said 4.4% of £1,000 is £44.

• 42:41Speaker 02

  Which is 4.4% annual return, I mean, average return based on average draw over a year.

• 42:47Martin Lewis?

  I didn't say average luck, I said typical luck, just to be clear.

• 42:52Speaker 02

  Right. What were the options again?

• 42:55Martin Lewis?

  A, £50. B, £25. C, nothing. And may I just thank you because your confusion is one of the key points I need to explain and really brings it out very sharply as to why premium bonds.

• 43:10Speaker 02

  So I need, it's about defining typical.

• 43:14Martin Lewis?

  Okay, I should use a different phrase. Median luck.

• 43:17Speaker 02

  Oh.

• 43:18Martin Lewis?

  Median luck. You've worked out the mean, the mean result.

• 43:23Speaker 02

  Mm-hmm, mm-hmm, mm-hmm.

• 43:25Martin Lewis?

  And I would define typical luck as the median result. Well, Adrian's thinking, I'll just define those two different averages for you. Mean average is if you add everything up and divide it by the number that you've got. The median result is if you lined everybody up with the same number of premium bonds. You line them up, all up in a row, from highest to lowest. How much would the person in the middle win? That's median luck, which is what I would define as typical luck.

• 43:48Speaker 02

  I would say...

• 43:49Martin Lewis?

  £50, £25 or nothing?

• 43:54Speaker 02

  I think it's... I think it's 25, but then again, I think I'll probably think it's zero. That's the median. 25 I'm going for.

• 44:04Martin Lewis?

  Final answer, 25?

• 44:06Speaker 02

  Yeah.

• 44:06Martin Lewis?

  Okay. So Adrian, you were quite right. Based on the price front rate, the mean amount you would win is £44. But what everybody has to understand, the prize, the smallest prize is £25. The next prize is £50. You can't win £44. You can win nothing. 25, 50, 75, 100. You can't, literally cannot win because the prize distribution, the smallest prize is 25 quid. So you understand why now I've called it median luck, not mean luck. Actually, the correct answer, get ready with a right or wrong buzzer, please, in the studio. Hopefully you've got the right or wrong buzzer this time. The correct answer is, if you have £1,000 in premium bonds over a year,

• 44:47Martin Lewis?

  you have a 56.5% probability of winning nothing. So the person in the middle, the person with median luck, would win nothing. Play the uh-uh.

• 45:01Martin Lewis?

  Well done. I was worried it wasn't coming out for a second.

• 45:04Speaker 02

  They're just toying with us now.

• 45:05Martin Lewis?

  Right. So this is very important to understand, and this is all about the distribution. Now, the biggest thing to understand, when they quote the prize fund, the mean prize fund, remember that includes those few people who win the big million pounds or the very big prize. For every person who wins a million pounds, a lot of people have to win nothing, right? Because of the way the prize distribution works. And so with a thousand pounds, you have a 56% chance of winning nothing. You've got a 43% chance of winning at least 25 pounds, a 35% chance of winning at least 50 pounds. Now, I have a fascinating graph in front of me, which is quite tough to do on the radio, but I'm going to describe it. What this does is says at the current 4.4% prize rate, because we don't have the new distribution

• 45:48Martin Lewis?

  for the 4.15%, but it will clearly be lower, I have, on the bottom row, the amount that you hold in premium bonds and your percentage expected return with typical luck, defined as median luck, the person in the middle, if everybody had the same number. And what it does is this, it stays flat at nothing through 100 pounds, 200 pounds, 300, 500, 800, 1,000, 1,250. So you get to 1,250 pounds, and with typical luck, you would win nothing, right? Once you go up to 1,500 pounds, with typical luck, you would win just over 3%. The prize fund rate is 4.4%. Then bizarrely, because of the multinomial probability that

• 46:30Martin Lewis?

  is working in place, all the different prize fund rates, it actually drops to at around 1,750 pounds, you'd expect to win just less than 3%. Then it goes up again at 2,000 to around 3.8%. There's a couple more bubbles, and then it starts to gradually improve until you get to the 50,000 pound level, where with a prize fund rate of 4.4%, you would expect with typical luck to win just less than 4% because of all those people who win a million pounds.

• 47:01Speaker 02

  But does it not say anywhere in the bonf that, for clarity, if you invest 1,000 pounds... If everyone invests a thousand pounds, you have got more chance of winning nothing than winning something.

• 47:15Martin Lewis?

  Of course it doesn't. These numbers come from a premium bond probability calculator that I built many years ago. And the maths to do it, I had to hire a postdoctoral cosmology statistician because he's the only one who could do multinomial probability, and then a professor of financial mathematics to approve the algorithm he had written. And it still takes a computer now, we've got much more computing power, four hours to calculate each month, based on the distribution, what these odds are. They just don't exist elsewhere. So it isn't, you know, it isn't something simple to work out. The big message you've got here is, the more you put in, the closer you will get to the price fund rate with typical luck. So if you've won £50,000, you're going to win just less than 4%.

• 47:59Martin Lewis?

  So should you be putting money in? Well, the first thing is, the big thing to remember about premium bonds is they're tax-free. Right? So, for those people only putting a small amount in and who don't pay tax on savings, which is a lot of people, because you can earn a thousand pounds' interest of a basic rate taxpayer without paying tax on savings, premium bonds are a bad bet. I mean, there'll always be somebody who beats the odds and someone has more than typical luck, but they're a bad bet. Once you start to move up to over £2,000 to £3,000 and your return is around 3.5%, if you would otherwise be paying tax on your savings with the top easy access rates at 4.75% to 5% and the top fixed rates just a little bit lower than that, if you would

• 48:38Martin Lewis?

  be paying tax on your savings, then they start to become a decent bet with typical luck. So you will have want to fill up your cash ISA already, and you're paying interest on the tax on your other savings. At that point, if you've got around, you know, a few thousand pounds or more to put in premium bonds, they become a decent bet, especially if you can max them out and you're lucky enough to be able to put in 20, 30, 40,000 or the maximum 50 pounds in, and you would be paying tax on the interest otherwise, then with typical luck, they do become something worthwhile. But most people have small amounts in, and I accept the psychology that people like the idea of dreaming big that I could win a million pounds. I mean, you've probably got more chance of tossing a coin and it landing on its side,

• 49:20Martin Lewis?

  but, you know, per individual bond, I mean, it's one in billions to win the millions of pounds. But that does work. And the funny thing that people say to me is, yeah, yeah, but here's what I get. Yeah, but my mum has premium bonds and she wins every month. Well, of course. How much have you got in? Fifty thousand. So you've got £50,000 in. £25 a month is £300 a year. So that's what? That's about 2.5% interest. Put it in a top savings account, you'd be winning more each year. You know, the concept that you win each month, you've got to contrast that to what you would make elsewhere. So premium bonds can work for people who've got a lot of savings and have paid tax on them and have got a higher amount. They're not so good for smaller savers. I'll leave it there.

• 50:02Martin Lewis?

  So let's do some tellers. We didn't get to it in the Five Live, but I have. Sitting in for the week, Paige is joining me. Producer Paige, hello, producer Paige.

• 50:10Speaker 03

  Hello. Hi, Martin.

• 50:11Martin Lewis?

  Now, am I right to say, well, I know I'm right to say because you told me when we were doing a pre-production chat, you actually got your student loan money back by virtue of I'd sent you my notes about it of what I wanted to talk about in the podcast, and you've actually done it and got some money back?

• 50:24Speaker 03

  I did, indeed. I did it on Monday this week. It was really, really easy to do. Just literally press one button. Seeing that they'd mentioned, do you think you're eligible for a refund? I was like, yes, hopefully. If I read your notes, I was hoping I did. And I got a message yesterday saying I've got £112 back, so.

• 50:44Martin Lewis?

  Winner winner chicken dinner.

• 50:45Speaker 03

  Yeah, pay it to the job.

• 50:47Martin Lewis?

  Quite right. There's your bonus. There's your tip for doing the show and filling in for podcast producer Simon this week. We were reason one.

• 50:55Speaker 03

  Yes.

• 50:56Martin Lewis?

  You were. So basically, this is about inconsistent income in previous years, and they'd taken it from you at some point.

• 51:01Speaker 03

  Yeah.

• 51:02Martin Lewis?

  I'm not going to interrogate your personal finances anymore. Don't worry. So what we're going to do now is we're going to do the tellers. The question I asked is, what's the best thing you've learnt about money from your work? And what job was it? And how did you learn? So I've got the Facebook ones. Hopefully, you've got the Twitter ones in front of your page. Let's do some reading. Theresa Woodman, or Theresa Woodman, started work at a bank in their debt recovery department for credit cards, learnt not to get into debt, understandable, never overdrawn on the bank account, and always paid credit cards off in full each month. She didn't capitalise in full, but it's a personal contract I have with myself that I must always say, in full. That was 40 years ago, and I still do it to this day. What have you got?

• 51:42Speaker 03

  And we've got Professor Sarah Jane at the minute. And she says, in 1986, aged 12, I had a daily paper round in Oxford. It started at 5.45am and I was, it was monumentally terrible. But I earned a pound a day and learned that saving most of it meant that I could buy a face magazine on Saturdays and an album on cassette at the end of each month. A good early lesson.

• 52:08Martin Lewis?

  And ended up being a professor.

• 52:10Speaker 03

  Yeah.

• 52:10Martin Lewis?

  I'd love to know what of, but there we go. Right, Elisa Seal. Save for your pension as soon as you can, as much as you can, here, here. Good tip I had is if you get a pay rise and can live on what you originally had, then put your pay rise into your pension. You don't miss it because you've never had it. That's actually in, in my book I wrote years ago, Nobody Should Buy It, it's out of date. So I'm allowed to say it was called the money without, do not buy it, it's out of date. I talked about that as forgotten gold. And I would say when you get a pay rise, put a quarter of it in your, into your pension before you re-get used to the new income that you've got and you readjust to the new level of salary. Because it's very interesting, we're inelastic on earnings. When our earnings go up, we feel it's great, but we very quickly get used to it.

• 52:55Martin Lewis?

  If you were then to have an earnings cut as the same level as the amount that went up, you would find it far more painful than the gain you got when you got the salary rise in the first place. So get 25% of it into your pension if you can. You go page. Let's turn the page.

• 53:08Speaker 03

  Oh, we've got.

• 53:10Martin Lewis?

  Not sure what that means.

• 53:13Speaker 03

  We've got Jennifer here. She is a debt advisor and she has mentioned, claim every benefit to which you are entitled. It's yours, full stop. Worried about money or paying energy bills? Get independent advice ASAP. No shame in needing help. Nothing you can say we haven't heard before. That feels very firm from Jennifer, I like that.

• 53:32Martin Lewis?

  Well done Jennifer. And, and look, there are many debt advisors out there who see the real nightmare pain that financial problems can cause people. And yes, millions of people are missing out on what they're entitled to. Very simple one. If you're on universal credit or pension credit, two and a quarter million people are not claiming the council tax reduction, which is done council by council because they don't realise, they think they would automatically get it. But you don't because council tax reductions have to be done by your local council. And the fact you're on universal credit or pension credit would, could mean you are eligible for it, but you have to apply separately. Two and a quarter million people don't, two and a quarter million people miss out on it. So I absolutely agree with that one. I really like this one from Sarah Staines. As a trainee, I had to do accounting exams and after the first lesson, I hid in

• 54:17Martin Lewis?

  the local cemetery and cried, thinking I'd never learned to understand business accounts, so would never qualify. Once I did qualify, well done as a solicitor, I had to set budgets, understand ROI, return on investment, and manage financial spreadsheets. I learnt to just follow the rules and not try to understand them. Well, I always think it is better to understand the rules, but if you can't understand them, at least knowing what to follow is not a bad way. I found that that really resonated with me because one of the things that I always scare me that people say to me is I get people to go, I don't understand why I should be doing it, but you've told me to do it. So I do it. And that always worries me because I feel like, don't put it on me. The whole point, the reason I explain it is so that you can decide for

• 55:00Martin Lewis?

  yourself whether it's right or wrong. But I suppose as a backstop, following the rules is at least better than not following them. What have you got?

• 55:08Speaker 03

  Lucy just says it's the daily and weekly costs that blow your budget, not the occasional splurge. Those little things that you buy regularly add up more than you think. Fancy meal out now and then adds up much over the year. And she's a project manager and tracking project, tracking project spend.

• 55:27Martin Lewis?

  Okay.

• 55:28Speaker 03

  I'm guilty of that.

• 55:29Martin Lewis?

  I'm going to test your page. Here you go. Right. First time doing the podcast and putting you under pressure.

• 55:35Speaker 03

  Oh, please don't.

• 55:36Martin Lewis?

  Yeah, it's happening anyway.

• 55:37Speaker 03

  I'm sweating.

• 55:38Martin Lewis?

  We're on air. There are four golden numbers that relate to this. They are 12, 52,

• 55:50Martin Lewis?

  250, and 365. Can you tell me what all of those numbers are?

• 55:57Speaker 03

  Um.

• 55:58Martin Lewis?

  Three are obvious.

• 56:00Speaker 03

  Yeah.

• 56:01Martin Lewis?

  Tell me.

• 56:03Martin Lewis?

  12, 52, 250 and 365.

• 56:07Speaker 03

  Oh, 365 days of the year.

• 56:09Martin Lewis?

  Correct. So if you buy something every day of the year to see its real cost, multiply it by 365.

• 56:15Speaker 03

  Fifty two weeks.

• 56:17Martin Lewis?

  Fifty two weeks. So if you buy something every week, multiply it by 52 or 50 for ease. You know, so if you buy something that costs a tenner every week, that's £500 a year. 12.

• 56:27Speaker 03

  12 months.

• 56:28Martin Lewis?

  Correct. So if you buy everything every month, multiply it by 12 and 250.

• 56:34Speaker 03

  Oh, I don't know. Are you gonna, is it really obvious?

• 56:37Martin Lewis?

  No, it's not. No, three were obvious. This is the non-obvious one. You've done absolutely fine. Don't worry. You can now hold your head up. You are, there are people listening doing, is that, what is 250? Some will have got it. But not everyone will. The rest, everyone will have got. You've done fine. Breathe easy. I shall tell you. 250 is full-time working days in a year. So if you buy something every day at work and you work full-time, let's take an example, say a coffee at a local coffee shop. Three times 250 is 750 quid a year. And that's how much you're spending on your coffee. So I, I'm not someone who would tell people not to do that. I would say you should ask, is that the most valuable use of the money? So maybe if you bought a flask of coffee to work and you wanted to save up to go on a holiday.

• 57:22Martin Lewis?

  If you were doing that, three pounds a day on a cup of coffee every day at work and you brought a flask. You could be about 700 quid a year better off and put that into your holiday fund. That's why they're the four golden numbers, 12, 52, 250 and 365.

• 57:36Speaker 03

  Really? Oh my god.

• 57:38Martin Lewis?

  Do you like the 250?

• 57:39Speaker 03

  Oh, I, I love it. I'm, to be honest, I'm so impartial to a little sweet treat as well. I think, I feel like I deserve it. I'm like, I deserve this coffee. I deserve this like pastry. But now you've told us that, I'm like, oh.

• 57:50Martin Lewis?

  Yeah, but there's nothing wrong with having them. But you know, if you want them, but is then thinking, am I doing it the best way? Could I have brought it from home? Could a little bit of pre-prep and acknowledgement that I was going to be doing this? Have saved me money and made me pay less for it, which puts more money into my pocket. And it's that type of mindset to get into. I mean, it all depends on your financial priorities. There are many busy people who earn lots of money for whom just going out and buying a coffee. It's part of my day. It wouldn't make any difference to me and I'm going to do it because otherwise it would be a waste of time and that time money equation is something I understand. I'm going to move on to Claire Henderson, a very simple one. She just tells us the extra forty four p an hour for a leadership role is absolutely not worth it. I like that. Let's do a couple more then we'll stop.

• 58:33Speaker 03

  And we've got Mrs. Baxter. Aged eighteen, I worked at a furniture retailer. Couldn't get my head around the number of people who bought new sofas on finance. Vowed I would never buy new furniture if I couldn't buy it outright. Ooh.

• 58:48Martin Lewis?

  It's interesting because people see the pain that goes into what those type of decisions. Louise Greenwolf will be our last one. I work in payroll on film production, so I'm freelance contract crew. It's weekly pay and the job will always have an end date. Therefore, I've learnt how to manage weekly pay with monthly bills and how to save if I'm out of work for a period of time. Incredibly important as a freelancer. And let's do the number one rule for freelancers and people starting out in that position. Well, depending on how much you're earning, but I'll take it as a safe rule. For every hundred pounds you earn, twenty five quid of that is not yours. It's likely to go and need to be paying tax and national insurance at some point. So, take

• 59:30Martin Lewis?

  your twenty five pounds per hundred as you earn it, put it in a separate bank account. Don't touch it, don't sniff it, don't smell it, leave it to sit there until you need to pay your tax bills. Pay it from your tax bill. Hopefully you'll be lucky enough, there'll be some left over and then you can have the money. But the biggest reason people get in trouble, and interestingly, many of those, you know, when the young celebrities go bust and go bankrupt and they write about it, it's almost always their tax bill because they think, oh, just pay the tax bill out of future income. No, you pay the tax bill out of current income. You always make sure that you've got the money. And putting money aside as soon as you earn it, not thinking of that as your money, is the way it works for people on payroll and people who are self-employed and freelance. They need to sort of manage their own self-discipline to make sure that works. I think that's a really good way to end. Paige, you're brilliant. I love your warm tones doing this.

• 1:00:15Martin Lewis?

  Thank you very much for joining me this week. Oh, thanks so much for having us, Martin. Pleasure.

• 1:00:23Martin Lewis?

  Okay, you lucky, lucky podcast listeners. It's that time in the show where I do special tips that are just for you. Yes, I should, Coco, how exciting. I've got two for you this week. The first one is all about credit cards. Frankly, if you cannot afford to clear your credit card in full, you can't afford not to take a look at this. Because for the first time in over a year, we have a 30-month 0% balance transfer available. A balance transfer is when you get a new card that pays off debts on existing cards for you. So you owe the new card, but at a cheaper interest rate, which means more of your money goes to clearing the actual debt that you pay, rather than just servicing the interest. Now, of course, the biggest thing here is acceptance. Will you be accepted for the card?

• 1:01:08Martin Lewis?

  So I would suggest you always go via a comparison eligibility calculator. You'll find them easily online, which will tell you your odds of being accepted for the best cards. And doing that does not impact your credit score. So then you can home in on which card you're most likely to be accepted for before you actually apply. But the new top pair is from HSBC. Again, go via the eligibility calculator to see if you're going to be accepted. It's up to 30 months 0%, with a 3.49% one-off fee of the amount of debt that you transfer. So if you transfer £1,000, that's £34.90 fee that you will pay on top. I say up to 30-month cut because it's a rate-for-risk card, which means some people will be accepted and could get 26 months or 14 months 0%.

• 1:01:53Martin Lewis?

  The next longest card isn't rate-for-risk. It's Virgin Money at 29 months 0%. That's the longest guaranteed 0%. It doesn't mean everyone will get it. It means everyone who is accepted will get the full 29 months. Now, the reason that's important is if you're using an eligibility calculator, if you had a good chance of getting Virgin Money, and let's say not that good a chance, or you weren't pre-approved for HSBC, because some eligibility calculators do pre-approval, then you would probably go for Virgin Money, because you know if you're accepted for Virgin Money, and you've got good acceptance odds, you're going to get the full 29 months 0%, whereas you might be... Accepted for HSBC and not get the full 13 months zero percents advertised.

• 1:02:36Martin Lewis?

  You've also got long zero percents from Tesco Bank and M&S, both 27 and 28 months zero percent with various different routes. And worth mentioning, if you can shift your debts and repay it off very quickly, then NatWest at 13 months zero percent is the longest no-fee card. So you could shift your debts to it and then there is no cost whatsoever as long as you can clear within 13 months. I'll just run you through my balance transfer golden rules. A bit of caveats and housekeeping so you know what to do. If you're doing this, never miss the minimum monthly repayment or you could lose the zero percent deal and it will cost far more. All of these have APRs once they finish of 24.9% representative APR.

• 1:03:17Martin Lewis?

  Aim to clear the card is my next golden rule or balance transfer again before the zero percent ends. Or again, you'll rocket to that APR rate of around 25%. Don't spend or withdraw cash on these cards. That isn't usually at the cheap rate and withdrawals could hit your ability to access credit. And if you're not going to transfer it application, which I'd always suggest you do, you're not going to shift your debt up to application. You're usually only 60 to 90 days to get the zero percent or you lose your opportunity. So do get your skates on. Feel free to go and do a little bit more reading, but I go back to my original. If you can't afford to clear your credit card debt, you can't afford not to check whether you can shift it to zero percent. If you're paying interest and you want to make sure you do the right one and do it via an eligibility calculator. Paige, are you still on the microphone?

• 1:04:02Speaker 05

  Yeah.

• 1:04:02Martin Lewis?

  Okay. Just before, just before I do this, Paige, do you know what the train company is? What's the name of that train company that you go from like London to Paris on? What's it called?

• 1:04:13Speaker 05

  Eurostar.

• 1:04:13Martin Lewis?

  I am. Thank you very much. You can keep that in the edit.

• 1:04:19Martin Lewis?

  Oh, it's my favorite and it works so well. Right. So yeah, my second deal is on Eurostar. 30% off all fares and there's a trick to get a little bit extra off. Eurostar's celebrating its 30th birthday and it's offering 30% off from London to Paris, Brussels, Lille, Amsterdam and Rotterdam. If you're listening on the podcast, you need to do this quick because it ends at 11pm on Thursday, the 14th of November. November, so it's very soon. It'll only be early listeners who can do it. The deals for travel from Tuesday, the 26th of November to Thursday, the 13th of February, 2025. Fifty-four pound return seats is really, really cheap. It is trial and error. You just have to see it's there. Waited to save even more. Yeah, you can get a discount of 5% if you

• 1:05:00Martin Lewis?

  book via TrainPal using the code EURO30. And if you do the trial and error and you find somewhere that you want to go in the right time, then if you go onto the TrainPal app and enter the code EURO30 at the checkout, if you're new to that app, you'll get an extra 5% off. If you're not new, you'll get an extra 2% off via the same code. And that's it for this week. I do hope you've enjoyed the podcast. If you have, tell your friends about it and suggest that they subscribe because we do a new show most Thursdays and then they can get it and their pockets will be pleased with them. And if you haven't enjoyed it today, well, then why are you still listening? It's been nearly an hour. I don't get the point. You're wasting your time. You're wasting my time. Okay, not technically.

• 1:05:42Martin Lewis?

  The same podcast would have gone out anyway, but you get the point. I'm sitting in the corner of the classroom and I'm telling you off. There's just simply no point in listening this long if you haven't enjoyed it. I'm not happy. You're not happy. Let's not do it in future. Let's enjoy it in future or just don't listen. Bye bye.

• 1:05:58Speaker 05

  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 team by emailing [email protected]. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you're listening on demand, it's worth double checking as the details can date. BBC Sounds, music, radio, podcasts.

• 1:06:34Speaker 07

  In Our Time is a world-class seminar every week. Why was Jeremy a lonely snail? What were lines doing in York in the third century? I'm Misha Glennie and every week I'm joined by expert guests to explore the ideas that shape our world.

• 1:06:50Speaker 03

  It's one of the first times really that you consistently see someone painting teeth. I know that sounds bonkers.

• 1:06:54Speaker 04

  If I was going to define mathematics, I would say it's the study of structure.

• 1:06:58Speaker 07

  In Our Time. Listen on bbc.com or wherever you get your podcasts.

• 1:07:03Speaker 02

  Tea or coffee? Love a cup of tea.