Can you make £500 switching bank?

Martin Lewis brings you everything you need to know about bank account switching, including which banks are willing to pay you money to do so. Martin also takes you through the need-to-knows about Pension Credits, whether you can claim them and how to claim. The Mastermind question this week is also on pensions. And there is also a huge win from our Question Time podcast. If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!) – so if you’ve always wanted to know his favourite ice cream flavour, if he’s ever pondered the meaning of life, or have a very complicated question about your personal finances, email it to [email protected] mailto:[email protected].

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

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• 0:54Speaker 01

  Coffee?

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  Love a cup of tea. I'll have tea too.

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• 1:03Martin Lewis?

  It's absolutely crucial people know if they're eligible or not. So this is my rough rule of thumb. I've never had a BAFTA before. I'm very excited that I'm going to go and pick up my BAFTA. There's probably the richest selection of bank account switching bonuses I remember. I am not going to dot my i's and cross my t's on this because frankly, it makes boring listening. Hello, I'm Martin Lewis and this is the kindly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our big topic episode where each week we lead on one main subject to help you save. Now, usually, most of it comes from my BBC Radio 5 live show with Adrian Charles, but not this week. This week, Adrian and I have done a pod-only special just for you. So I'm going to tell you what's in the pod once I'm with Adrian.

• 1:49Martin Lewis?

  Play the theme tune.

• 2:09Speaker 05

  Okay, Martin, what have you got for us?

• 2:12Martin Lewis?

  Oh, we've got lots to talk about today, Adrian. We're going to be talking the big subject, though. There are currently eight bank accounts that will pay you to switch, up to £500 to switch. So my big question to anyone, unless you love your bank, unless it smiles at you in a beautiful, rather sexy way and gives you a back massage, why don't you get paid to go elsewhere? The financial terms are often better, too. We're going to be talking about pension credit as well. There are 900,000 of the 2.3 million eligible pensioners who aren't claiming this top-up to the state pension, some of the most vulnerable and poorest pensioners in the country. So, listeners, I want your help to spread word on that. And Money Mastermind this week, Adrian, it's all about pensions, and it's

• 2:56Martin Lewis?

  an interesting question, too.

• 2:58Speaker 05

  Interesting, interesting. Looking forward to it. You can do get in touch with the podcast anytime you want. Email Martin Lewis podcast at bbc.co.uk.

• 3:17Speaker 05

  Shall we move on to just putting a garland round your neck? I thought you had a glow about you, and it turns out you've won an award. Which one is this? You've got them all by now. I mean...

• 3:28Martin Lewis?

  Well, no, this is the first of a had of its time, and it's actually quite a special one. It's quite funny we're doing this now, because I have just been, I've been a journalist for 30 years, Adrian, and I think what I did this morning is the first time I've been to a press conference.

• 3:44Speaker 05

  Really?

• 3:44Martin Lewis?

  Because my type of journalism is more data journalism. I don't really go to press conferences. Now, I'm saying I think, because clearly someone is going to say, oh, no, in 1999, you came to a press conference about, so from my memory, and it was a press conference, because very kindly BAFTA have decided to give me the Special award for television for changing the face of an industry type award it's called, I think was the phrasing that was used. And it was announced today, it's one of those BAFTA awards that they announce before the ceremony, which is on the 10th of May. And I had to go and answer questions from journalists about it and it was a very, very nice announcement. I've never had a BAFTA before, I'm very excited that I'm going to go and pick up my BAFTA.

• 4:23Speaker 05

  And what were the questions like? Any nasties in there? Any zingers or was it just?

• 4:27Martin Lewis?

  And I was slightly worried about zingers on that, that they were going to go off topic and what was going to come. No, there was questions about scam ads. There was questions about, you know, do you feel the responsibility that everybody takes your information and acts upon it? Yeah, I really do. Boy, do I feel the pressure on the back of that. And all the difficult times, how long are you going to keep going? Lots of that type of stuff, but they were generally very good and, you know, I went off occasionally. About scam ads, I certainly had a big rant about that one. And yeah, there was, there's only one question, which I'm not going to say what it is. There's one question where I think I may have given a little bit too much about how I communicate with politicians in my answer. So I'm hoping that one just goes away.

• 5:06Speaker 05

  Okay.

• 5:10Speaker 05

  Bank account switching.

• 5:11Martin Lewis?

  Yeah.

• 5:12Speaker 05

  How should we start with this? You've got any general points you want to start with?

• 5:16Martin Lewis?

  So the reason we're doing this right now is there's probably the richest selection of bank account switching bonuses I remember. And as you've just been heard, I've been doing this a very long time now. I've been the money saving expert for 26 years.

• 5:31Speaker 05

  Has anyone called you a veteran yet?

• 5:33Martin Lewis?

  No, have you had that?

• 5:34Speaker 05

  I've not, I've had stalwart, which is the, which is the.

• 5:39Martin Lewis?

  That sort of fits you if you forgive me.

• 5:41Speaker 05

  But that's the entry, that's the entry room into, into sort of veteran.

• 5:45Martin Lewis?

  What's after veteran is it venerable? Is that the progression?

• 5:49Speaker 05

  I think it's the light.

• 5:53Martin Lewis?

  You came to the studio one time, I'm sure that's not a problem.

• 5:56Speaker 05

  Where were we? Yes, go on, bank.

• 5:58Martin Lewis?

  So yeah, so there is a really, really rich selection of bank accounts that are paying you to switch right now. And that is the important thing to remember. Now, bank account switching, very easy process. With all of these, you need to operate through the seven working day switch service, which really takes about 10 days. This is what happens. You go through this switch service, your old bank account is closed for you. All your direct debits and standing orders are automatically transferred for you. Any payments to your old account are automatically forwarded to the new account. Though I would say for the really important payments, you want to notify them like, you know,

• 6:41Martin Lewis?

  that will work for a few years, but you've got to make sure everything is transferred for you. It gives you plenty of time to do. And then you will be banking with the new bank. Most cases, pretty easy and hassle free. And all of these, to get the switch bonuses, you need to do that. Now, when I say it's rich at the moment, this is partly because there's a slightly new phenomenon. So not only do we have more virtually than we've ever seen, open brackets, slight lie, last week there were nine. I've decided to do it this week, there are eight, close brackets, but roughly more than we have ever seen. But there's this whole new category for high earners where they're giving much bigger switch incentives. So the biggest right now are £500. They will pay you, you're going to have earning a decent wage to get that, but they'll pay you £500.

• 7:24Martin Lewis?

  So it's probably worth, before we go all the questions and answers, I'm going to run through who's paying what. I am not going to dot my i's and cross my t's on this because frankly, it makes boring listening. You will need to go and look up a bit more. Most require you to switch direct debits across, some, not all, have minimum payments that you need to meet. So let's go through this. Of the non-high earners stuff, top payers upfront cash is Barclays Bank at £200. Optional half price Apple TV with that and Club Lloyds, but that ends today, Thursday, the 30th of April at midnight. So if you're listening on the podcast afterwards, I'm afraid that one may well have gone. That's £200 for free and a year's Disney Plus and a top debit card for spending overseas. You've got. First Direct, which is paying a hundred and seventy five pounds for switches via some routes,

• 8:09Martin Lewis?

  which I'm not allowed to mention, you can get two hundred and ten pounds with First Direct. That's top rated for service. It's got a seven percent regular saver, a zero percent overdraft up to two hundred and fifty quid, and also a top debit card for spending overseas. You've got Santander Edge, that's a hundred and eighty pounds for free. It costs three pounds a month, but you can earn up to ten pounds a month if you pay your bills via direct debit through it. Those are the sort of standard ones. And then the bigger ones. Right, HSBC Premier account is currently giving you five hundred pounds for if you switch to it. It gives you free family travel insurance, digital GP access. You need to earn a minimum hundred grand a year for that. Two that are ending tonight for higher earners, so that's Thursday, the thirtieth of April, eleven fifty nine PM. Lloyds Premier, free five hundred quid,

• 8:54Martin Lewis?

  free digital GP access and physio and a yearly reward like Disney Plus. And Barclays Premier, a free four hundred pounds plus various rewards. For Lloyds, you need to earn roughly eighty five thousand pounds a year. For Barclays, you need to earn roughly seventy five thousand pounds a year. Then you've got NatWest Premier Reward, which is two hundred and fifty quid for free, so not that high considering it's one of the premier ones. And for that, you need to have a salary of a hundred thousand pounds a year. So two hundred quid for most people, five hundred quid for bigger earners.

• 9:24Speaker 05

  And how do you prove what you earn? How do they know you're not making it up?

• 9:28Martin Lewis?

  Really interesting question. So while the minimum pay-ins on the normal accounts, there are ways around it by putting money in, taking money out. They tend to be much stricter on the high earners account. So they're often monitoring to see that the if, so look, the high earning thresholds are actually about making sure you pay your income in, right? So they're asking you, you know, you've got to pay five thousand pounds a month going into this. Now, if you've got five thousand pounds a month coming from your employer, it's pretty obvious you've got those earnings. If you've got two thousand five hundred pounds coming from your employer, you then withdraw two thousand five hundred pounds and put another two thousand five hundred pounds in. That may work on the normal accounts, but on the higher earner accounts, they're monitoring

• 10:11Martin Lewis?

  that. And pretty soon they're going to go, you don't really earn over a hundred thousand pounds. Plus, on some of those high earner accounts, when you sign up for it, you have to declare that you have those earnings. And it would be fraudulent for you to declare that if you didn't.

• 10:24Speaker 05

  Okay, Maggie, to switch, why do you have to have direct debit in progress? I normally do standing orders.

• 10:31Martin Lewis?

  So that's just a criteria that most accounts have. They want you to switch over to direct debits. Look, what this is about is they don't want you to make this up. They won't say, if you're switching to us, we want you to use it as your main bank account. And most people in the modern world have direct debit set up. So they say you've got to switch to direct debits because it's a way effectively of you proving that this is your main bank account that you're moving over. So, yes, it's very annoying if you don't operate your banking like that. But unfortunately, you're just caught by if they individually pleased it was your main bank account, it would be way more costly to them, so they're not going to do it.

• 11:05Speaker 05

  Okay, Caif was thinking of switching to Barclays account. He says, pay in minimum two thousand pounds within thirty days to get the bonus. Can I transfer five hundred pounds from another account to Barclays? And then transfer it, transfer it back and forth until two thousand pounds has been paid, or do I need to have two thousand in the account?

• 11:24Martin Lewis?

  So generally, I think you probably could get away with the five hundred pound move. I would probably suggest you minimise the number. So let's say you earn fifteen hundred pounds a month is your take home salary. I would have fifteen hundred pounds going in, I would take five hundred out and put five hundred pound back. Then they're less likely to trigger it. But on the, it's sort of what I mentioned earlier. On the non higher earner accounts, then the terms tend to be, I have to say, I haven't read the specific term of the Barclays account you're talking about. But many times before you've been able to jemmy it with the, they're just saying you need to have this amount total going in within a month. So putting it in, taking it out, putting it in, it's only the putting it in that counts. As long as there's no earnings declaration, you will generally get away with that.

• 12:08Martin Lewis?

  But I can't specifically say for that account.

• 12:11Speaker 05

  Adrian asks a, Adrian asks a good question, not me, this is another Adrian.

• 12:16Martin Lewis?

  Adrian, you always ask good questions.

• 12:17Speaker 05

  Well, this one asks a better one.

• 12:18Martin Lewis?

  My little stalwart, you.

• 12:22Speaker 05

  Are these, are these rewards subject to income tax?

• 12:25Martin Lewis?

  No.

• 12:26Speaker 05

  I wonder why not?

• 12:27Martin Lewis?

  Because they're seen as cash back and reward incentives and they're not. The same way as cash back on a credit card isn't seen as a, isn't seen as income. It's not an income. It's, it's just one of those quirks. They are not.

• 12:38Speaker 05

  Shaun, my only question is why doesn't everyone do it? Money for nothing, easy to do. I just wish the banks hadn't cottoned on and started excluding people who've had a bonus in the past. I suppose that's about time, isn't it? And, you know, I just get used to one bank system paying things in and out. How the app works, does the app work? Crucially, is there somebody on the end of a phone if you need it? Then, I don't know, perhaps I'm the fool.

• 13:05Martin Lewis?

  Well, no, look, I think if you're very happy with your bank and it works for you.

• 13:10Speaker 05

  I'm just not unhappy.

• 13:12Martin Lewis?

  Well, yeah, well, but so, and this is a really interesting point. We're talking current accounts here. Now, when it comes to a savings account, I think service is less relevant. Right? When it's a savings account, you're putting your money in, it's sitting there, you're taking it out once. If it's a bit of a faff, you'll get annoyed at that point, but it's not really going to change your life. When you're talking about your day to day banking, then actually service becomes much more important. Because it could be a regular hassle. So if you're properly happy with your bank. Look, First Direct has won virtually every customer service poll I've ever done. It 92% great in the last survey I did. Not that many people leave First Direct. So I think there are arguments for sticking.

• 13:52Martin Lewis?

  However, what Shaun is probably thinking is there are also people who deliberately and maliciously, in the best way, multiply switch bank accounts and they often use a mule account is, is the term for it. Which is you have an account set up that's got a couple of direct debits that you have income going in and out. And you use that as your basic account and then you switch it time and time again to get all these bonuses. And some people earn decent money from that. In fact, I've got a clip here from our Question Time podcast of somebody who does exactly that.

• 14:22Speaker 06

  We've done all of the bank switches you've recommended. We've made over two grand on that.

• 14:27Martin Lewis?

  Oh, your, your serial bank switches. Love it.

• 14:29Speaker 06

  Yeah, no, absolutely. Don't get me wrong, the logistics of working the joint diary and all the bits. I will admit, I did cock up on one of them, deny Alex, of which Alex will always, always hold that against me.

• 14:42Martin Lewis?

  We're all allowed one mistake. So as you can see, they made, you know, over two grand is doing really well. Of course, there's two of them doing so. But you know, if you follow it and you have to be pretty on top of it, you can make a decent whack by switching bank accounts the right way.

• 14:58Speaker 01

  We've got a caller, Jason in Lancaster. Jason, what's your question for Martin? Thanks for coming on.

• 15:04Speaker 03

  Yeah, good afternoon. My question is, oh, congratulations from your BAFTA, by the way.

• 15:08Martin Lewis?

  Oh, thank you very much. That's very kind of you. Thank you.

• 15:11Speaker 03

  You're very welcome. My question is, when you do talk about these switching accounts, it affects your credit score. I mean, every time I checked my credit score, I was in debt for years and it's taken me a long time to dig myself out of that hole. And I'm sorry, it's a semi-reasonable credit score now. But on all the credit scores, it says, great to have your bank account for six years or whatever, and it goes up in increments. So how does it affect that? If you swap in, sort of, I mean, every six months or so, or even once, it's going to take a hit to your credit score?

• 15:45Martin Lewis?

  So let me, let me, it's a really important question. And let me just differentiate. I'm going to talk first about switching once. We'll come on to multiple switching a bit later. Yeah. So the first thing you, it is always important to understand, and I say this, is you do not have a credit score. There is no such thing as a credit score in the UK. What you have is each lender scores you differently based on its own wish list of what is a profitable customer. Now, the reason people think they have credit scores is they go to credit reference agencies and credit reference agencies give you a credit score. The credit reference agency credit score is just that agency's loose indication of how it thinks an individual lender would view you. And the three different credit

• 16:27Martin Lewis?

  reference agencies all have different credit scores. So there's no, there's nothing firm. Now, what happens generally when you switch bank account once, is you get a short term hit on your credit score. This is primarily done because banks like evidence of longevity and also because normally when you switch bank account, because it's got an overdraft, that's a credit application and that marks your file too. Normally, within about three or four months, you will bounce back to roughly the same level. And in truth, I wouldn't switch my bank account if I had a mortgage application or a really important debt shifting application due or debt application in the next three months.

• 17:08Martin Lewis?

  But if I haven't got one due, or if it's nine months away, this isn't a problem. And you're far better to have the better bank account and the money coming in. But, once we start talking about, as we've just heard, the multiple switches, the people who are doing it all the time, that can have a bigger long-term effect. And most of the people who are doing that are pretty financially savvy and understand that they're not in a borrowing position and what they often do is they might do it for two or three years and then they know their mortgage is coming up because they're on a five-year fix and their mortgage is coming up in 18 months time or, and then they stop. And they stop and they have an 18-month pause doing it, so it doesn't have an impact on their credit score.

• 17:49Martin Lewis?

  But you're absolutely right, it will have an impact. But one isn't a problem unless you've got an imminent application. You know, we are allowed to do so. Does that, does that help?

• 17:58Speaker 03

  Yeah, that's fine, because I mean, like you said, we don't have credit scores over here, but when you've got three different ones, like TransUnion, ClearScore, Experian.

• 18:06Martin Lewis?

  Yeah, TransUnion, ClearScore are the three actual ones, the others are agencies that report them, yeah.

• 18:11Speaker 03

  Yeah, it's, it's very confusing when they're all different levels and different amounts on the number. It's good on most.

• 18:18Martin Lewis?

  So my biggest thing to say on the credit scores.

• 18:21Speaker 05

  But should Jason worry about it? Because if it feels as if it's counting against him, should he not switch banking? I suppose that's, that's Jason, that's the core of your question, isn't it?

• 18:30Speaker 03

  Yeah, pretty much. I mean, because I've spent years trying to get my credit, well, the non-existent credit score up. I had to be looking good for lenders.

• 18:38Martin Lewis?

  Are you just talking about doing one switch and do you have any imminent debt applications pending, like a mortgage or something?

• 18:44Speaker 03

  No, no imminent debt applications and it would probably just be one switch.

• 18:50Martin Lewis?

  So I would say in that case,

• 18:54Martin Lewis?

  do it, if it's right for you, do it. Accept that it's going to be unpleasant viewing for a couple of months when you get your credit score coming in, it's going to drop. Which of course, you're really not going to like if you've had a poor credit score in the past, because, because you've worked very hard to get where you are, I appreciate that. But understand that after a few months, it's going to come back to where you are right now. Or roughly where you are. And remember. My my big message on the credit scores from the credit reference agencies, don't sweat small moves. Small moves, that they are, these are not hard and fast. Small moves are meaningless. Big moves, you see as a big warning sign, something's going wrong. Small moves, if it moves by five or 10 points, big deal. It does, you know, and and I'm afraid if it moves by five or 10 points upwards, it's also no big deal.

• 19:39Martin Lewis?

  You know, because because it doesn't matter that much. So. I would, and and I I have to say credit scoring has an element of art as well as science in it. So you have to, you have to give me a little wriggle room. If I were in your position and you could get a good lucrative bank account that was going to make your life easier and put more money in your pocket and you do not have any imminent debt applications coming, I would do it. And even better, now you have to do it with your eyes open that, yeah, you're going to see your credit score drop on those credit reference files. But it is not really going to have an impact when you come to do your next application. It's going to be trivial because that application's, I don't know, six months, a year, two years, three years away.

• 20:15Speaker 05

  Okay, Jason, thanks very much for for for calling in. Shall we look at joint accounts? David says, are there joint accounts where you can benefit from free cash switching?

• 20:24Martin Lewis?

  Every bank account I mentioned, apart from Barclays, allows joint account switching.

• 20:28Speaker 05

  Okay, so that was from David, Piccone, I think the name is. Why is switching a joint account over so difficult? Is it?

• 20:36Martin Lewis?

  No, not generally. If you're switching a joint account to a joint account, if you're changing the the substance of your account, it can get a little more difficult. I tend to get pretty decent feedback on joint account switching. Again, it's not normally an issue. So I'd love to hear from people. What how your experience of a joint account switching, please?

• 20:53Speaker 05

  Rachel, I've switched before to all bank accounts, but not all of them, surely. I find that these offers don't allow you to do it again. Are are there any out there?

• 21:02Martin Lewis?

  It's got much more difficult. So it used to be that you sort of could renew encounters and new customer again, because of course, remember all these switches are new customers only. What they now and and but and then so it was like, if you haven't banked with us in the last three years. Now the terms for many of them has changed to if you haven't had a reward payment from us before. So people are getting to a point where they have done them all. I mean, there are people out there who've done them all and you just have to watch out for the terms and conditions. There can be clever ones. Sometimes even existing customers can get a switch if they're opening a new bank account in certain circumstances. But at the moment, again, I haven't done a double check on every single one of them. Uh, so I can't 100% answer it, but you're right, it becomes a problem. You do run out.

• 21:46Speaker 05

  Um.

• 21:46Martin Lewis?

  That's not a problem for most people. You mean, it means you've done eight or nine switches or something.

• 21:50Speaker 05

  Daniel, so I have a three thousand six hundred pound overdraft. Don't really wanna take it over to my new bank. Can I switch and set up a payment plan? With the current bank to clear down the the overdraft with the old bank.

• 22:03Martin Lewis?

  So this is quite important. So the only bank account that's offering a decent zero percent overdraft at the moment is First Direct. But that's only two hundred and fifty quid. Most customers get it. It is credit score dependent. And of course, First Direct is paying. Switchers hundred and seventy five pounds minimum at the moment. So if you think about it, for those on lower overdrafts. If your overdraft was two hundred quid right now and you were to do that switch. At some point in the next couple of months, you're gonna get paid a hundred and seventy five quid. So that reduces the overdraft and the rest of the overdraft is at zero percent. It can be incredibly lucrative, but First Direct won't actually move your overdraft. So if you're switching and you're overdrawn. You will be given the choice of whether you want your old, generally, your old bank, it does depend on which individual bank.

• 22:46Martin Lewis?

  I'm gonna give you a generalized description. It can change bank by bank. Of whether you want your old bank account closed, or whether you want it to sort of switch across, but your old bank account will be open. So you can keep the debt there. Now, what you could do, of course, is you could use your new account to pay off the old one. What I'm trying to say is it won't automatically port an overdraft. It will port any credit, but it won't port your overdraft across for you. So then it depends on the old bank on what it could do. Now, there are other things you could look at. You could look at getting a loan. To pay off the overdraft. You could look at getting a money transfer credit card. Tesco and Virgin Money. That's where you get a new credit card that pays money into your bank account for you.

• 23:27Martin Lewis?

  So you owe the credit card at zero percent. They're only about one year zero percent and you'll pay a fee of around four percent for doing so. But that is effectively a way of shifting your overdraft to zero percent interest on the credit card. So there are things that you can look at. I'm slightly concerned by the amount of that overdraft. Three thousand six hundred is a big overdraft. And it is worth a reminder here that most overdrafts now, we talked about it in Money Mastermind a couple of weeks ago. Is the most expensive form of mainstream borrowing. A typical high street overdraft is forty percent. A typical high street credit card is twenty five percent. So actually, if you have an overdraft, your priority, unless you've got other extreme debts, your priority should be getting rid of the overdraft ahead of paying off credit cards.

• 24:11Martin Lewis?

  Just pay your minimum on your credit card and use any extra money you have to reduce the overdraft. So there are things that can be done, but it does get tricky with bigger overdrafts like that.

• 24:19Speaker 05

  Can you get a package bank account with a switching bonus? Cath has a Lloyds account because they're offering free A I cover now that we're drawing this. Is it best to swap? Do other accounts offer similar?

• 24:28Martin Lewis?

  So a package bank account is, I tend to think of it as an insurance product. So these are where you get generally worldwide family travel insurance, mobile phone cover. If you're lucky for the whole families, mobiles and breakdown cover all included for a one off fee within your bank account. So they call them package bank accounts. I tend to think of them as insurance cover with a bank account on the side. Because the real benefit is if you need all those different insurance policies, it can be vastly cheaper just to pay the fee for the bank account than it could to get the insurance separately. And they tend to be pretty good quality insurance as well. So you're asking me, are there any that package that have switching? Two at the moment. You've got the Santander. Can I just say for regular listeners?

• 25:10Martin Lewis?

  You may remember my new year's resolution two years ago was to stop saying Santander. I still have to consciously think every time. And I'm not sure, I think I'm closer, but it is an absolute mental hiccup saying that word. And so if you ever hear me pause when I say that particular bank's name, it's because I'm determined to. So the Santander Edge account, sorry, the Santander Edge Explorer has a seventeen pounds a month fee, but gives you a hundred and eighty pounds for switching to it. So effectively the fee is covered for just over ten months. It includes worldwide family travel insurance, max age seventy five, including winter sports, household mobile phone insurance, so for all the phones in the home. If you've got young people, you've got kids, teenagers with their own phones.

• 25:55Martin Lewis?

  So good for smartphones and UK and European breakdown cover for the account holder. So if you're in a trusted relationship, you could get this, but technically make your partner a joint account holder as well. So that would cover you both. The one is Club Lloyds Silver. That's arguably better, slightly less insurance, but cheaper. So £200 switch cash, but it's only £11.50 a month. So effectively the switch cash there is covering you, what's that, 18, 19 months? This is European, not worldwide family travel insurance. Mobile phone insurance, but for the account holder, not for the whole family. And family UK breakdown cover with recovery to the nearest garage or at home. So those are two you should look at. Effectively, I mean, just think about this for everybody else who wasn't thinking about that.

• 26:39Martin Lewis?

  Effectively, on one, you're getting 10 months. On the other, you're getting well over a year free insurance. Family travel insurance, mobile phone cover and breakdown cover. So if you're paying for those separately, that's a pretty lucrative deal. A year's free insurance, what I mean by that, you'll still have to pay the fee, but you will have got the free money that could cover it. So Adrian, you've been asking me questions. Now it's time for me to ask you them.

• 27:07Martin Lewis?

  Hello and welcome to Money Mastermind. Adrian, the score stands. And you've got 18 right, but 37 wrong in this three. You've got last week's wrong. I thought you were gonna go, I thought you were gonna change it. In this three option, multiple choice quiz, which means sadly you are.

• 27:26Martin Lewis?

  No better than random chance. We have to improve this, Adrian. We have to get you better than random chance.

• 27:31Speaker 05

  Don't start implying you've made it easier. So I'll get it right. Because then when I get it wrong again, then I'll feel even worse.

• 27:38Martin Lewis?

  So I haven't made it easier, but I'm not, I'm trying to be sort of not help you and not tease you. Fair, not fair, I was always fair.

• 27:47Speaker 05

  No, you weren't.

• 27:48Martin Lewis?

  I was fair.

• 27:48Speaker 05

  No, you were, you were slightly, anyway.

• 27:51Martin Lewis?

  Adrian, I'm a BAFTA winner now. You can't say that.

• 27:53Speaker 05

  Of course, I'm sorry, Your Majesty.

• 27:56Martin Lewis?

  Right, so listeners. I want you to imagine a rugged 59 year old man, a broadcaster from the West Midlands. Handsome, charming, with a reputation for sparkling repartee and sharp sardonic wit. I know it really is not easy for anybody to imagine. Let's try though. This man earns one hundred thousand pounds a year and has long been contributing to his pension. Unfortunately, he has a long owed legacy debt he's still repaying. He borrowed to invest in what he thought was a fantastic opportunity, Pinterest. But it turned out it was just the attempt at a beer mat app, Pint Rest, by one of his best friends.

• 28:39Martin Lewis?

  And that flopped. So last year he decided to take thirty percent of his money out of his pension, some of which was taxed, some of which was tax free, and use it to pay off the debt. My question, having taken the money out of his pension, if he wants to contribute to his pension again this year, can he and how much? You're with the premise. He had pension money, he took thirty percent out, twenty five percent tax free, five percent taxable, took the money out and now wants to start putting more money back into his pension, he's aged fifty nine, can he do it? Here are your three options. A, yes, he can put in up to sixty thousand pounds or his earnings, whichever is lower. B, he can put in up to ten thousand pounds or his earnings, whichever is lower.

• 29:23Martin Lewis?

  Or C, non, once you've withdrawn, you cannot put money back in your pension.

• 29:32Martin Lewis?

  So talk me through the first options. The first is sixty thousand pounds.

• 29:35Speaker 05

  But I mean, that seems high, but whether you've taken money out or not, you just want to make, setting that aside, you just want to make an extra pension contribution.

• 29:44Martin Lewis?

  So he wants to make an extra pension contribution to a, but he's already withdrawn money from his pension and had some pension money. That's the key point.

• 29:51Speaker 05

  Okay.

• 29:51Martin Lewis?

  So, so the question is, first of all, your decision is, is he allowed to put anything back into his pension and continue to save in his pension?

• 30:00Speaker 05

  Taking it as read that if he'd never taken anything out, he could put more in.

• 30:05Martin Lewis?

  He could put more in than the general limit. If you haven't taken any money out, you can put in up to sixty thousand pounds or your earnings, whichever is lower. Of course, we're talking about the amount that you contribute tax free. I mean, you can put more in, but it'd be taxed. So this is the amount that we generally talk about going into your pension. So that's the general rule for anyone. So my first option A, see, I'm being helpful, see, helpful. First option A is the fact you've taken money out doesn't change anything. The last option C is non, once you've withdrawn, the fact you've taken money out means you can't ever put money back in again. And the middle option B is, is there a rule that says if you've taken money out, you can put less in each year in future?

• 30:43Speaker 05

  I think it's B because that sounds a reasonable compromise because they don't want you just using it as a bank account, taking money in and out. Because the money you took out.

• 30:51Martin Lewis?

  Well, that was literally, I'm not trying to, this isn't trying to lead you, but literally, George Osborne, when he did his pension freedom, was he wanted people to use it as a bank account. Side note, never do that because it could be huge tax implications just taking money out of your pension. You, the, the way you take money out of your pension really matters. If you're near pension age, call Pension Wise and make sure you talk to them about it. You could pay way more in tax than you need, but that's not today's question.

• 31:14Speaker 05

  No.

• 31:14Martin Lewis?

  So Adrian, you were gone B.

• 31:16Speaker 05

  Yes, what was C again? Just want me to say.

• 31:17Martin Lewis?

  C was you can't put any money back in.

• 31:20Speaker 05

  That C would say an excessive penalty for something where there was some exceptional circumstances. I think C is a compromise. You can just put up to 10K in.

• 31:29Martin Lewis?

  So B.

• 31:30Speaker 05

  B.

• 31:31Martin Lewis?

  B is a compromise.

• 31:32Speaker 05

  Mm hmm.

• 31:33Martin Lewis?

  Final answer.

• 31:34Speaker 05

  Final answer.

• 31:35Martin Lewis?

  Adrian, you're locked in on B.

• 31:37Speaker 05

  On B.

• 31:39Martin Lewis?

  So the usual rule is you can put in up to 60,000 pounds a year or earnings, whatever is lower tax free. Yet, once you take your pension or more specifically access taxable income from a defined pension contribution, and if you remember in the question, 25% was tax free lump sum, 5% was taxed, you dropped the lower money purchase annual allowance of 10,000 pounds on which you still get tax relief. Adrian, you got it right. Break the hallelujah.

• 32:10Speaker 05

  Beautiful.

• 32:12Martin Lewis?

  There you are. And that's your award today.

• 32:15Speaker 05

  Thank you very much indeed. Thank you, thank you, thank you.

• 32:18Martin Lewis?

  So look, this is really important to know. The exact rules are pretty complicated. Do not do this again without talking to Pension Wise, which is totally free guidance for you on this because it's really complicated. What I'm about to give you is broad brush, but it's really complicated. Have I mentioned it's really complicated? Do you think I've sold it enough that it's complicated and I'm just giving you guidance? So if you take a lump sum, let's say, and 25% is tax free, 75% is taxable, you go down to 10,000 pounds. If you just take your tax free lump sum and to just take your tax free lump sum, you'd have to put the rest in a drawdown or an annuity. You would not drop down to ten thousand pounds.

• 32:59Martin Lewis?

  If you took your tax free lump sum and you took a hundred quid of taxable income from your drawdown, you would drop down to ten thousand pounds. If you had an annuity payment, you wouldn't. But it's complicated. Have I mentioned it's complicated? I think I've mentioned it more than once. It's complicated. So talk to PensionWise. The the big message you should take from this, rather than the complexities of this, is if you take money out of your pension and at some point in future, you're going to want to put more in, it can reduce the amount that you can contribute and get the tax benefits on. So it's really worth thinking out and checking that you're not doing anything to change that before you do the decision. That's all. That's the bit to remember. It can change things. I need to check before I did it.

• 33:45Speaker 05

  Pension credits.

• 33:47Martin Lewis?

  Yeah, so look, I mean Pension Credits was a really big issue during winter fuel payment. Because, and I was very critical of the government for doing this, when it what it announced it, it was going to link eligibility for the winter fuel payment to a pension credit. And I mean, that was a mistake because Pension Credit has for over a decade, I've been talking about it. It is a fundamentally underclaimed benefit. The hope was that while it did temporarily link it to winter fuel payments, I mean, that's all changed now, that there would be communication out there that would mean far more vulnerable pensioners, many state pension, many people on very low incomes would start to claim it. But the latest stats are still over nine hundred thousand

• 34:29Martin Lewis?

  of two point three million people who are eligible aren't claiming it. And as it's just been increased for the new tax year, even more people are now eligible, some who weren't before. But what I really wanted to do, Adrian, is I got an email. And I found this email really important. Because some people don't claim Pension Credit because they think it's not going to be very much money. Actually, the average payout's over four grand. But you can get Pension Credit and only get a tiny little bit of it. So this email I thought was really interesting. I've changed a couple of details because the person wanted anonymity. I'm going to read it to you if that's okay. So, Dear Martin. As a direct result of your and the government impressing on the older generation to apply

• 35:09Martin Lewis?

  for pension credit, I have saved almost three thousand pounds in the last year. My husband and I retired, eighty-three and seventy-six, with a state pension. I filled out the necessary forms and was awarded pension credit of six pounds ten pence a week. So, doesn't sound that much, I mean, it's not bad, it's three hundred quid a year. But she then goes on to say, this opened up benefits. Due to the application being backdated to when I applied, I didn't have any council tax to pay this year, a saving of two and a half thousand pounds a year. Add to this a free TV licence, warm home discount and lower water bill. This has resulted in the saving of over three grand a year. This has made such a difference to my husband and me, with less worry over the cost of living.

• 35:53Martin Lewis?

  I'm still budgeting very carefully, but with less pressure and anxiety. It was, as you advised, that we were owed the money and not the pariahs that I decided to apply. My husband and I worked as a self-employed plasterer and me as a receptionist. We had worked hard to buy our own property and had only one child. We'd never applied for benefits. How many are in a similar position? I regret to say that I'm too embarrassed to tell my friends that I'm in receipt of these benefits, but please keep impressing on your viewers, in this case listeners, their rights and urge them to apply. I know the forms online are a little daunting, but I'm sure family or a trusted friend would help. So that's my big message, right?

• 36:34Martin Lewis?

  Pension credit isn't just about the money you get itself, it is the core gateway to so many other things. You know, free TV licence if you're over seventy-five, housing benefit if you're a renter, council tax deductions, free dental treatment, reduced prescriptions, glasses and contact lenses. It's absolutely crucial people know if they're eligible or not.

• 36:54Speaker 05

  Okay, so do you want to go through the basics about how do you know and how you apply and so on?

• 36:59Martin Lewis?

  Okay, so I'm gonna give you my rules. These are my rules. Because it's incredibly complicated who is eligible and who isn't eligible. So we're going to be talking about, it's all about your total weekly income. This is for people of state pension age, so roughly sixty six or more. Now, your income is any income from any work, any private work or state pensions, and some benefits count your income as well. Plus, if you've got over ten grand of savings or investment, each five hundred pounds you have above ten grand counts as one pound a week income. If only it really generated that much. It doesn't, but that's how it's counted. But anyway, it's mainly income from work and pensions and the state pension. So this is my rough rule of thumb.

• 37:42Martin Lewis?

  If you are a single person and your total weekly income is under two hundred and thirty eight pounds a week, you are likely to get pension credit. If you're a single person and your total weekly income is under two hundred and fifty pounds a week, it is definitely worth checking to see if you'll get pension credit. I'm not saying you will, I'm saying it's worth the time to check. If you're a couple, both of state pension age, if you earn a combined three hundred and sixty three pounds a week or less, you are very likely to get it. If you earn a combined three hundred and eighty pounds a week or less, it's definitely worth spending the time to check, but I'm not saying you will get it. To check, it's dead easy.

• 38:25Martin Lewis?

  You can go online to gov.uk/pension-credit. Just go to gov.uk and search pension credit. Or you can call the pension credit hotline if you're not good online, oh eight hundred ninety nine one two three four. My biggest message, if you're going to apply or if you're asking about it and you're not eligible, they won't tell you off. There's no discouragement from application. The best thing to do is think you may be due, don't stall, just call. Or click, actually, it's easier online. But that's the message, don't stall, just call. And please, what I'd like to say to everybody listening to this, if you know someone that this may apply to, if you know someone of state pensioner age, living on a very low income,

• 39:07Martin Lewis?

  just talk to them about pension credit, maybe help them through it if you have the relationship that you can do so. It is, you know, many people talk about intergenerational arguments and intergenerational wealth gaps. What we're talking about here. Is 900,000 pensioners, many of whom are living off under £238 a week and potentially substantially under, who can get their income topped up. These are some of the poorest and most vulnerable in society, and we all have a duty and obligation to make sure they're getting what they're due.

• 39:41Speaker 05

  As I was successful in Mastermind, I'll be generous, I'll give you a chance to talk about a big win you had on Question Time.

• 39:47Martin Lewis?

  Yeah, your success, my success. Yeah, we just wanted to play this because the Question Time podcast, which goes out pod only, is well worth a listen. And this week's, we had someone who got £5,000 back just from calling the podcast. Effectively, he had an issue, his builders had gone bust. He called up, he hadn't been able to use Section 75, which I know you know what it is, that's the valuable credit card protection. He asked what should he do, and I gave him a different solution, something to try. I wasn't 100% sure it worked. Well, this week, he got back in touch to tell us what happened. Have a listen to this. Mark in Northumberland.

• 40:31Speaker 07

  Martin, we spoke in January. I gave you, I called and asked a question because I'd made a Section 75 claim.

• 40:39Martin Lewis?

  Are you bust builder?

• 40:41Speaker 07

  Yes, that's right, yeah, yes.

• 40:43Martin Lewis?

  Yes, that's about your builder went bust, it's not about some, you're not trying to enlarge your chest, yes.

• 40:49Speaker 07

  No.

• 40:51Martin Lewis?

  Sorry.

• 40:52Speaker 07

  So, yeah, it went bust and we owed about £7,500. And we'd had the Section 75 was rejected.

• 40:59Martin Lewis?

  Yeah.

• 41:00Speaker 07

  So it was really a cry for help in January. And you suggested as a last resort to try chargeback because about £5,000 of that £7,500 was paid by credit card.

• 41:10Martin Lewis?

  Yeah.

• 41:12Speaker 07

  So I raised that with, it was M&S Bank. I raised that, that was the same days that... As the call and filled the form out, gave them the evidence and within about 24 hours, they said, yes.

• 41:22Martin Lewis?

  Wow.

• 41:22Speaker 07

  You've got a valid, you've got a valid claim. Um.

• 41:25Martin Lewis?

  I've got goosebumps. I promise you, I genuinely have goosebumps. I'm, I'm so pleased to hear it. Cause it was, it was, it was my last thing scraping the bottom of the barrel that I could think of. Brilliant.

• 41:35Speaker 07

  It was, it was a last chance and um what they actually, I didn't, didn't realise I did this, but they actually recredited the money. The same day, but you, you, you, I didn't know this either, but it has to go through Mastercard and you've got to wait 60 days before.

• 41:48Martin Lewis?

  Because, because, just to explain to people, so the way a process, a chargeback process works. It's actually, it's your card company or bank in this case. Asking the, the vendor, the, the firm's card company or bank. To, for a reimbursement because you did not receive the ser, the service. So there has to be time for the other people to put in an objection.

• 42:11Speaker 07

  Yes, and they did. They objected after about four weeks.

• 42:15Martin Lewis?

  Yeah.

• 42:15Speaker 07

  Um, but um to their credit, M and S um fought my corner and it, it was. Successfully challenged and um I got a call, so I got an email a few days ago to say. It had all been successful. Uh, it was all complete and they sent the money through.

• 42:32Martin Lewis?

  Oh, wonderful. I'm so pleased.

• 42:34Speaker 07

  Yeah, I mean, yeah, I mean, it's not everything that we had, but it was better than the nothing that we thought we were going to get.

• 42:40Martin Lewis?

  Five grands, five grands. You've got to look at it from that perspective, haven't you? Not what you lost. Cause you'd lost everything and this way you've got five grand of it back. I'm so pleased.

• 42:48Speaker 07

  Yeah. And so it, it was a, a big thank you from us, you know, for the, for the help. Um, and also, well, M and S as well, they, they actually gave us an additional £250 in apology. Because they said they should have also told me about chargeback as well. So, so they had, they had missed out on that, but um, but you, you caught it. So.

• 43:06Martin Lewis?

  I, well.

• 43:07Speaker 07

  I'm so fantastic.

• 43:08Martin Lewis?

  I am genuinely smiling. I love this. Why I do it, right? And, and absolutely wonderful. I just gonna, I'm just going for, for everyone listening, just want to, just do a little, get a bit. Technical nerdy, because I think this is interesting. So you, you, section 75 that Mark was talking about is where if you buy something on a credit card that costs between a hundred pounds and 30,000 pounds. The credit card company is jointly liable with the retailer. Uh, so if the company goes bust, you can go to the credit card company for it. If I remember, in your case, it was over 30 grand, wasn't it?

• 43:40Speaker 07

  It was, but I was trying to argue. Because there was distinct stage payments in there and but that they didn't they didn't accept.

• 43:48Martin Lewis?

  So you could have gone to the Ombudsman with that, but I I'd said, I think, if I remember rightly at the time, I said I thought it was unlikely the Ombudsman would award because there's a hard rule over thirty thousand and you were your transaction was over thirty thousand for your building.

• 44:01Speaker 07

  Well, I did it as well, and you were right. The Ombudsman rejected it. I had to try everything.

• 44:06Martin Lewis?

  Yeah, quite right. But now what's really interesting now, section seventy five is much meatier than chargeback because it's a legal right. Chargeback is a sort of a term and condition of Visa, Mastercard or Amex. So like as an internal dispute resolution process as opposed to a law.

• 44:25Martin Lewis?

  But actually, if you have a chance to charge back, they tend to be in some cases more successful because you if it's section seventy five and if you had, let's say you had a case with section seventy five, M and S Bank would have had to pay. And it might have tried to fight you because it doesn't want to pay. But if you're doing a chargeback, M and S Bank suddenly becomes your agent on your side. Because it's going, well, actually, he's probably got a case for a section seventy five if he doesn't do a chargeback, but we'd far prefer that he does a chargeback because then he gets the money money off the vendor's bank rather than off ours and we don't have to pay out.

• 45:05Martin Lewis?

  So there's an argument that chargeback is in the interest of your card or bank to do because they're not the ones shelling out. So often, if you have both cases, what you should always do is you should put in a note, right? This is you've done this. I know you, Mark, I know you've done yours, but just for everyone. If you do, I would probably start with a chargeback, but say if the chargeback doesn't work, I reserve the right to do a section seventy five. You know, and put that in and I want to put a note that I would like you to try both. And that way you actually give them a sort of a vested interest in helping you, which is exactly what happened in this case. And I am delighted. So are you go? How did you get with the building? Did I did they half do it? Do I remember?

• 45:45Speaker 07

  They made a start. They hadn't done very much. So we've just been waiting really to you know, to get the outcome of this before we could restart it. So we're just about to get going again. So the job is back on.

• 45:57Martin Lewis?

  Great stuff. I wish you all joy and happiness with it. And thank you so much for getting back in touch. We love a success like this. It's brilliant. Thank you.

• 46:03Speaker 07

  I had to was I had to say thank you because it's it was obviously beyond what we'd expected.

• 46:09Martin Lewis?

  So thanks again. So yeah, that's on the Question Time podcast. It's available on BBC Sounds and anywhere else that you get good podcasts. Do have a listen. It's a different feel to this podcast, I have to say. If you're wondering why there's no reply from Adrian, that's because I'm just doing this bit by myself at the end. Yes, we're in the podcast only bit, but as we were recording this particular podcast, not live, we were doing it just for the podcast. There isn't a podcast only bit because the whole thing was podcast only. Although just to be really confusing, while it was podcast only, it will be played out on Five Live, but it'll be the podcast played out on Five Live rather than the Five Live played out going into the podcast. I think that's probably where I stop.

• 46:49Martin Lewis?

  That's it for this week. We tend to put out a new episode every Thursday and Monday. The Mondays is the Question Time podcast of which you've just heard a little bit. That's where you can ask me absolutely anything and everything, open brackets within reason, close brackets. If you've enjoyed it today, please do tell your friends you've been listening to the Martin Lewis podcast. And why not subscribe as well? That way your pockets will be pleased with you. And if you haven't enjoyed it and you've been listening this long, I'm shrugging my shoulders. I mean, what do you want from me? You chose to keep listening. I think we should just leave it here.

• 47:41Speaker 06

  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.

• 48:16Speaker 01

  It often starts with a question. What were lines doing in York in the third century? Why was Jeremy a lonely snail? Then we search for answers.

• 48:27Speaker 02

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

• 48:31Speaker 03

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

• 48:35Speaker 01

  As I was doing the research for the programme, my jaw just dropped further and further down. In Our Time is a world-class seminar every week. Watch the discussions unfold and explore over a thousand conversations in our archive. I'm Misha Glennie and every week I'm joined by expert guests to explore the ideas that shape our world. In Our Time, listen on BBC.com or wherever you get your podcasts.

• 49:05Speaker 01

  Coffee? Love a cup of tea.

• 49:07Speaker 02

  I'll have tea too.

• 49:08Speaker 01

  Tea for me, please.