A Bills Special!

In this Bills Special, Martin goes through everything you need to know about Council Tax, including how to check and challenge your band. Plus, his four easy steps to help reduce your mobile phone bill.

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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• 1:46Speaker 03

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• 1:49Martin Lewis?

  Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually, much of it comes from my BBC Radio 5 live show with Adrian Charles, and this one is extra special. Oh, yes, indeedy, because I'm on a break, so it's a good excuse for a Best Bits pod. The producers have put together what they think are some of the most pertinent and still relevant elements of the podcast we've done so far this year. Let's just hope they're right. Though worth noting, if I do mention specific products, do be aware they could have changed. So double check before you take any action. We don't want you listening to February's best buys once you're in August. And this week's best bits podcast is a bills buster.

• 2:33Martin Lewis?

  That's a lot of B's in one sentence. I've got four easy speedy steps to help you slash your mobile bill and I'll go through everything you need to know about council tax. Play the theme tune.

• 2:59Martin Lewis?

  I'm delighted to be doing this update for the council tax podcast I recorded at the beginning of June because there's good news. I talked about a potential government consultation on the administration of council tax and my hopes for what would be in it. Well, it came out today and most of my hopes have come to fruition. For me, parts of the council tax system are broken and I've called for some of these fixes for nearly 20 years. So it is a delight that the government has listened and rapidly launched this consultation, which includes many of the areas I've been talking to them about. And I can now tell you, it was a few weeks before all of that podcast that I met with Angela Rayner and put these points to her, and I do believe that she did listen.

• 3:43Martin Lewis?

  So the first one and the biggest and the most important for me, council tax debt debt collection. It is rapid and aggressive and the collection methods currently hurt millions of people and disproportionately affect those with mental health problems. Here's how it works. You miss a monthly payment because you can't afford it. Within three weeks, the council can tell you, you have to pay for the whole year. Within three weeks of you not doing that, they can go to court, get bailiffs, add charges on what you already owe and come in and take stuff from your house, which can be incredibly detrimental to people. No commercial. Lender would be allowed to behave like this, they are not allowed to behave like that. Constituents are treated worse than consumers.

• 4:27Martin Lewis?

  It's counterproductive, it can add to council's costs, and it still doesn't mean people can pay the money back. If they don't have the money, they don't have the money. The government is consulting on slowing the whole process down, adding in that councils must be considerate of people's circumstances, capping the extra costs, and, as you have to do in consumer lending, pointing people towards getting help with their debts, which might just mean they're more able to repay the council. So I'm very delighted on that one. It's work that my charity, the Money and Mental Health Policy Institute, has long been campaigning on, and we've been doing it for a good amount of time, and it's brilliant to see that things might actually improve and people's lives could change. So do feed into that one.

• 5:11Martin Lewis?

  Next, as I talk about in the pod you're about to hear, council tax bans in England and Scotland haven't been revalued since the stopgap drive-by valuations first done back in 1991. Now, rebanding is not in the scope of this. This is about council tax administration. But the point I've made to them, that I'm delighted it is in the consultation, is with potentially 400,000 homes in the wrong band. If people think they are wrongly in too higher band, they should be able to challenge it. Now, there is a blocker in place that says, once you've been in a property more than six months, it gets much, much more difficult to challenge. But I don't think people know enough about the system to be checking within the first six months. So what I'm suggesting is

• 5:56Martin Lewis?

  everyone is allowed one formal challenge once they've moved into a property with no time limit. It's worth noting, all of this consultation is about England, but often when the changes come in England, they do sometimes roll out to Scotland and Wales too. The consultation is also proposing help for some of the most vulnerable. Another one of those campaigns, you'll have heard me say before that severe mental impairment discount is horribly named. It's a discount that is potentially there for people who've had dementia, Alzheimer's, severe stroke, severe Parkinson's, and are no longer able to function socially in the way that they could. The problem is it's been under-publicised, under-claimed and over-complex. It's far too difficult to do.

• 6:39Martin Lewis?

  There are different systems with different councils. Sometimes you need a doctor to sign the form and you need to go to the doctor. Other times the council sends a form to the doctor. The backdating is inconsistent. And in this consultation, there is an opportunity to move towards a simpler, more universal, less off-putting application process. So they were my three main ones, but there are some other things in the consultation I should tell you about too. They're talking about changing the default that you will pay council tax every month. So 12 monthly payments instead of the current system, which is the default is you pay for the first 10 months of the tax year and then you have a couple of months where you don't pay.

• 7:23Martin Lewis?

  Now, the reason that's done is so councils can bring money in more quickly, but the government's saying it doesn't make any sense and of course it's right, you wouldn't invent that system to begin with. Now, when I was first told about this, my point was, I think it's right that you shift the default to 12 monthly payments, but there are some people who like the 10 monthly payment system because they use it for budgeting and when they have those couple of almost payment holidays from council tax, that's what it feels like, though it isn't, you're still paying the same amount, that they put that money to other things like car insurance. So while the default will be shifted to 12 monthly payments, those people who want to stick with 10 monthly payments are still able to do so. You just have to request it and you can be on the current system.

• 8:02Martin Lewis?

  They're also looking at potentially upgrading the eligibility for carers and apprenticeships because the amount that you're allowed to learn to count, there's a limit and that hasn't gone up with the minimum wage, so that's a pretty simple one.

• 8:19Speaker 05

  Let's go through the checks then.

• 8:20Martin Lewis?

  Okay, so we'll do the checks before the challenges. The first check is very simple. It's the neighbours' cheque. Is your band higher than neighbours in preferably identical, if not in similar homes? Now, you don't need to ask them. You can simply check your band and your neighbours' bands at gov.uk in England and SAA.gov.uk in Scotland. You find out what the bands are and you can talk to the neighbours about the property. I need to just, the cheques that I'm doing here, these are the cheques to see if it's then worth doing much more investigation in the challenge. These are the spot cheques, if you like, to see if it's likely to be worthwhile. These are not your formal. So the first cheque is the neighbours' cheque, makes sense?

• 9:02Speaker 05

  Okay. Richard is already sort of worried, say, challenge the band if it goes up instead of down, do you have to pay more?

• 9:09Martin Lewis?

  Absolutely. You cannot request that your band is lowered. You can simply ask them to reassess your banding. Now, let's just be plain. The problem with the neighbours' cheque is this. If you are in a higher band than neighbours in identical properties, it may be that they are all in too lower band and you are in the right band. And what you don't want to do is A, do an appeal and find your band goes up, or worse, you get in touch with this and they put all your neighbours' bands up. Now, that-

• 9:38Speaker 05

  But as long as they don't tell the neighbours why they're doing it.

• 9:40Martin Lewis?

  Oh, it all comes out and it's happened. And this is because people do this speculatively without doing the proper cheques. Now, when I invented this system back in 2007, of course, I mean, I didn't invent council tax challenging, but I tried to formulate how you do it. I came up with this second cheque. And the second cheque is called the valuation cheque. Now, it's very important for me to say, when you go on to the challenge later, the valuation cheque is not evidential. You cannot use it in the challenge, they won't look at it. This is just my second cheque that gives you-

• 10:09Speaker 05

  To inform your decision.

• 10:10Martin Lewis?

  To inform your decision of whether it's likely you're in too higher band or your neighbours are in too lower band. And I would absolutely not go any further unless you pass both cheques. And I have never heard of, I can't say it didn't happen, but I've had tens of thousands of successes on this, I suspect, that type of scale. I've never heard of anyone having their band up if they'd passed both cheques.

• 10:31Speaker 05

  Okay.

• 10:31Martin Lewis?

  So the second cheque is the valuation cheque. Which is effectively, what was your house worth in 1991? That's because the bands were still in, not only were they last valued in 1991, but they're still based on 1991 prices. So for example, in England, a band A is under 40 grand, a band B is 40 to 52,000, a band C is 52,000 to 68, a band D is 68 to 88,000, a band E, 88,000 to 120 grand, a band F, 120 grand to 160, a band G, 160,000 to 320,000, and a band H over 320,000. Well, 320,000 isn't that big a house price anymore. So you know, if it were on today's prices, everyone, you know, half the country would be in band H. So what do you do?

• 11:15Martin Lewis?

  Well, if you bought your house in or after 1991, take the price and sale date, if it's earlier, take the price and sale date, and then you need to back calculate the value in 1991 prices, which people can work out where, whereas I've been doing this, there are free tools on the internet that will do this for you, Adrian, that's all I can say. There are free tools that will do this for you. If you bought your house before 1991, it gets trickier. And let me say right now, the system is imperfect. I do not have answers for everything. We're trying to battle an antiquated valuation system based on antiquated data. But what you would do is you'd find a property that was identical or similar to yours, find out what year it sold on Zoopla and Rightmove and what the prices are, and you'd back calculate that.

• 12:00Martin Lewis?

  So if both checks, your neighbour's checks, you're in too high a band, and it looks like that you are still in too high a band in 1991 prices, when you back calculate what your house was worth in 1991, then I think it's safe to move on to looking at challenging it.

• 12:16Speaker 05

  Okay, so Martin says we've discovered that our leasehold house was first sold new in 97 for less than its cancelled tax band valuation, adjusted for inflation between 91 and 97, which would have put it in a lower band. If we challenge the valuation office to correct it, are we likely to get a band reduction?

• 12:32Martin Lewis?

  Irrelevant. Everything you've told me is irrelevant. Because valuations in that sense are not what the valuation office agency looked at. What they're looking at is are you wrong compared to similar? Similar property and identical properties. The neighbours' cheque is the more important one. You've got this giving me the secondary cheque. If you're also saying all my neighbours are in a lower band than me and they're in similar or identical properties, then yes, what you're telling me is important. Otherwise, valuation is not evidential.

• 13:01Speaker 05

  And Adrian says, how do we go about challenging the band we are in when there are no identical houses in our street?

• 13:06Martin Lewis?

  It's really difficult. And in fact, let me go through the technicals of the challenge now, which will answer that question. Okay. So when you challenge, you, step one is to submit a formal, or if you have to, an informal review process. Formal is better, it is a set process, but it's available to far fewer people. Because for a formal process, you must have moved in in the property within the last six months, which I think we've probably got a question on that.

• 13:36Speaker 05

  Oh, yes, I've challenged my council tax band this year as of March 25 and they have said that because it has been more than six months since I moved in, I can't challenge it.

• 13:45Martin Lewis?

  Right, well, the big question here is where are you? So, England and Wales, there is a formal and an informal process. Scotland, there is only a formal process. If you've moved into your house in Scotland over six months ago and you think you're in the wrong band, I would say it is nearly impossible to challenge it. I spoke to the Scottish, the head of the Scottish Assessors Association about it when I did a show on it in the past. And she says, we won't say it's impossible, but you know, there has to be some serious error. Now, one of the arguments that you can use here is the council tax office have to buy statute to maintain the integrity of the list. So if you believe you're the fundamental error of your council tax banding, you can challenge them on the they're not administratively doing their job properly.

• 14:29Martin Lewis?

  But it's really, really hard and it's not for people who don't have, can't grit their teeth and focus on something, you know, it's going to be a big job. So, let's go to the formal challenge. In general, you must have lived in the property for six months or less. This is renters can do this as well as people who own. But if you're a renter, courtesy would indicate tell your landlord before you do that. You may also be able to formally challenge if the property has fundamentally changed. For example, it's changed from a house into flats, or its use has changed, for example, some of it is now being used for a business. Or the local area has changed, for example, a nightclub's being built next door and it's fundamentally not the value. In Scotland, you may also be able to challenge formally if there has been a

• 15:13Martin Lewis?

  material, significant drop in property prices where you are, but that is Scotland only. So technically, no evidence is needed in a formal challenge, but I would do the evidence I'm going to talk about. The informal challenge is for those people who say you can't challenge because you've lived there too long, which is exactly like that question you just had. And this is all about the VOA having a legal duty to uphold the integrity of the council tax lists. But to do an informal challenge, you must provide compelling evidence that you are in the wrong band. So you can see what we're talking about here is the criteria for the challenge is different. If it's a formal challenge, you can say to them, I think I'm in the wrong band, can you have a look at it? And here's why.

• 15:55Martin Lewis?

  If it's an informal challenge, it's hardcore preparation to get in and really push your case in England and Scotland that there's compelling evidence, not that you're on the border of being in the wrong band, but you are manifestly in the wrong band.

• 16:12Speaker 05

  Right.

• 16:12Martin Lewis?

  Okay.

• 16:15Speaker 05

  So if you can do informal or formal, which should you go for?

• 16:21Martin Lewis?

  Always do formal, if you're able to do formal. Informal is for those who can't do formal. So always do formal first. Now, when it comes to challenging, again, in England and Wales, there's a brilliant thing that you need to get. And it's called, and people don't know about this, it's called your property attribute details that is held by the Valuation Office Agency. So the way you get this, I'm sorry, it's convoluted. You go to gov.uk, you go to the Contact VOA, Valuation Office Agency page, you select council tax, then you select other, then you type in, request my pad, P A D.

• 17:02Martin Lewis?

  Alternatively, you can call the VOA, but their phone lines will be busy. 03000 501 501, 03000 501 501. They'll normally come within five days, but this and the podcast will probably mean it lasts longer. So this is now everybody, even though you can't get a pad in Scotland, you need to understand what's on your pad, because this is what they're looking at when they're establishing, are you in the right band and comparing you to other properties? Let me talk through what's on your property attribute details now. The property type, is it end of terrace or semi-detached? The property age, is it Victorian or post-war? The number of floors, the number of bedrooms. That includes bedrooms not currently being used as bedrooms. So if you've turned a bedroom into a home office, that's a bedroom.

• 17:45Martin Lewis?

  The number of bathrooms, though that excludes toilets with only a sink. It's got to be a proper bathroom, not just a loo. The number of rooms, the living room, dining room, study, exclude conservatories, the utility room and kitchens. And the floor area, the size of the property measured in square meters. So many people who go through, once you're in the challenge phase, they are on their hands and knees measuring floor property, or they're using the floor property measure they got when they bought to see if it matches up to your pad. All of those things, once you've got your pad, is go through it line by line. Because if it's incorrect, that may be strength towards a rebrand.

• 18:19Speaker 05

  But if it was only done on the basis of a drive-by valuation, how could the pad possibly be accurate?

• 18:25Martin Lewis?

  Well, the valuation of your band was a drive-by valuation, but the pad details were stored, and it was the interrelation between the two, which is how the valuation was done. Yeah, but that doesn't, you know, these, these things aren't necessarily right. But it's always worth going through that. And the reason it's worth going through that is what you then have to do, the next step is I, and you know, this isn't easy to do, but we're talking tens of thousands of pounds for people, is identify similar or identical properties in the lower band. So you did that for my checks. Now, that was, that was your. Should I be looking at this? Should I be doing further work? Now we're in the...

• 19:01Speaker 05

  So I want you to go round your neighbour's house with a tape measure. So can I measure your, can I measure your toilet?

• 19:05Martin Lewis?

  As best as you can, or if not, find their sales data and the floor plans that are available when they were sold on, on the property prices near you. You're looking for same street or estate. That's really important. That helps, although in very rural areas, because you have to submit these. You have to submit the identical properties you are arguing are in a lower band than yours. In rural areas, it will accept up to 10 miles difference. But if you're in a city, you're looking at same street estate. Same style or features, you can't compare a semi to, to a flat. Similar age, you can't compare a new build to pre 1900s. Similar size, usually within a maximum 10% difference, but closer is better. To find those, speak to other occupiers or try property sales site. Or if needed, you can go to the land registry for a small fee,

• 19:50Martin Lewis?

  which has records of other properties. And then, I'm nearly there, sorry everyone. Then you submit your challenge. In England, it's gov.uk/challengeYourCouncilTaxBand. You can phone or email or write to the VOA. In Scot- and, in Scotland, Wales is the same. In Scotland, it's saa.gov.uk/makeaproposeal. Include a description of your property and any disagreement with the pad. If you think the pad is wrong, that's very important. Plus, addresses, descriptions, evidence of lower banded homes. There are free templates available online. The outcomes, success, woo-hoo, backdated. Formal rejection, you can appeal within time limits. informal rejection, that's probably it, unless you find new data that has a substantial change in it. That is the check and challenge.

• 20:39Speaker 05

  Caroline in Birmingham. I've just found my council this morning after several phone calls, emails about my mum's council tax, which you received a court summons for non-payment from when she died. It's been a nightmare and distressing. I had to contact my MP, this needs investigating, because she, she was charged from the day she died. It turns out she was in credit.

• 20:59Martin Lewis?

  Council tax debt collection is a nightmare system. When you talk to the debt counselling agencies, they talk about commercial lenders, but the one that they save the shake of their head is council tax. It is more vicious, more aggressive and more rapid than any other form of mainstream debt collection in the UK. That's why I cried a little bit when I got the win that they're going to consult on changing the way it works. Millions of people's lives are destroyed. The fact that you can't pay a month and you then have to pay a year and you have bailiffs to your door. The story that got me involved in this is through my charity Money and Mental Health Policy Institute of the woman who got her council tax demand for a miss payment because

• 21:44Martin Lewis?

  of delays in the post on Christmas Eve and she had to pay a year's worth by Christmas Day or the bailiffs were coming round. This is a woman with severe mental health problems who was turned into total anxiety, who therefore got a credit card out to pay it. She took out a new credit card at 40% interest rate that she could never afford to pay and it absolutely catastrophised and destroyed her finances. Constituents treated worse than customers and that's why I've been campaigning to change and that's just another symptom of it. And I hope this consultation, I hope, will come out in the next month. I haven't got a date for it, I'm hoping it'll be in the next month. And they've told me it will include changes to getting, you know, just reducing the rapid and aggressive debt collection, which I should note, doesn't mean councils bring in more

• 22:29Martin Lewis?

  money. Telling people to pay money they haven't got just means it adds cost to the individual, cost to the council and cost to the NHS because of the mental health impact that it has on so many people. So it isn't a clever system for anyone and I'm very pleased and I'm thankful to the government for saying they'll look at it.

• 22:45Speaker 05

  Discounts, who gets them?

• 22:47Martin Lewis?

  Okay, so I'm afraid again, and I'm sorry if this programme is being complicated, folks, but it is complicated. It's not me who does the system. These are discounts. What everybody needs to understand is the full council tax bill is based on two or more qualifying adults living in the property. If you are not in that situation, you may be due a discount. An adult is simply somebody aged 18 or older. There are four categories of discount, but they interact in relatively complicated ways. So let me give you the categories first.

• 23:22Martin Lewis?

  Somebody aged under 18, a minor, we're going to call them a minor from now on. A full-time student on a minimum one-year course, we're going to call them students, but they're a full-time student. Somebody with a severe mental impairment, this is the one that is commonly missed out and that I'm campaigning to get better clarification on it. A severe mental impairment is currently defined as an impairment of intelligence and social functioning which appears to be permanent. It is common with Alzheimer's, dementia, severe strokes, severe Parkinson's. To qualify as having a severe mental impairment, you need to have had a doctor certified that you have an SMI.

• 24:04Martin Lewis?

  Councils have different forms, I want to standardise the forms, it makes it too complicated. You'll need to get the doctor to sign the form. And you will need to be getting one of a number of benefits like attendance allowance, disability, living allowance, personal independence payments. Some of those are non-mains tested benefits, so it isn't necessarily about means tested going through in it. In England and Wales, you will need to be getting that benefit. In Scotland, you can just be eligible for the benefit even if you're not getting it, but if you're eligible and not getting it, you should be getting it, is what I'd also say. So we've now got three categories: minors, students, SMI, severe mental impairments. Fourth category, this is a different one, is live-in carers.

• 24:46Martin Lewis?

  So that's someone who is caring over 35 hours a week of care, not for your spouse or partner or a child under the age of 18. Right, so you've got those four categories. If there are two qualifying adults living in the house, even if they're living with a host of people who are discounted for council tax, minors, students, SMI, you pay 100% because there are two adults. So the two adults always override everything else. If there is one adult living in the house with somebody who is discounted, severe mental impairment, student, minor, or a carer, you get a 25% reduction. So that's the single adult discount.

• 25:29Martin Lewis?

  A single adult gets a 25% reduction and you still get that even if you're living with someone who is discounted for council tax purposes, which are the categories I mentioned earlier. If everybody in the household is discounted, so let's say an all-student household, or perhaps two people who both have a severe mental impairment, you do not pay council tax. And then the one slightly hybrid category, if somebody with a severe mental impairment is living with a carer and no other adults, you get a 50% discount. So those are the discounts. So what you need to be looking at is you see the complicated interrelation, but the thing that always trumps that, that people need to understand is two adults, you pay the full amount. Even if you're living with 12 under 18s and four students, you pay the full amount because

• 26:14Martin Lewis?

  it's about the number of qualifying adults in the house that goes for it. Now, if you're suddenly listening to that and going, hold on, I didn't think I was entitled to the single person discount because I live with my kids or I live with my son who's a student and he's 19, so I didn't think I would get it. You do get it. Get in touch with them. Whether you will get it backdated to the moment that it happened to you is council by council. For severe mental impairment in Wales, because they listened to the campaign ask, and I was very pleased and they credited us with this, they have standardised information and standardised backdating for severe mental impairments cases. So people get big backdated payouts on severe mental impairment.

• 26:53Speaker 05

  Reduction then.

• 26:54Martin Lewis?

  There is council tax support worth up to £1,500 a year missed out by possibly two and a quarter million people. The reduction is those primarily for those on lower incomes and in some cases it can cut your council tax bill by up to 100%. Now, you can do both a discount that we've talked about and a reduction, that's why I'm categorising them separately. The reductions often apply to people who are on universal credits and means tested benefits or pension credit. But this is the thing I need to shout, and this is the reason I believe why two and a quarter, potentially two and a quarter, those aren't government stats, those are stats you're in agency I work with, potentially two and a quarter people are missing out.

• 27:38Martin Lewis?

  You have to apply for council tax benefit separately. You do not automatically get it if you are on universal credit or pension credit. Council tax benefit and the exact qualifying criteria. Are dictated by your council and the reduction is dictated by your council and you have to apply to your council. So we do not have a joined up system between the central government benefits and the council tax benefit. And because of that, and because many people assume they would automatically get it if they were entitled to it, millions miss out on it.

• 28:14Speaker 05

  Okay, Kate, so what are the thresholds to be entitled to council tax benefit? Government websites don't specify any figures, nor do council tax, nor do individual council websites.

• 28:26Martin Lewis?

  Well, some individual council websites do, but not all of them do. My honest answer is if you think you may qualify, apply. What's the worst that can happen? They say no. You know, I go back to my, to my major subtext here. I started off by saying council tax is broken. I think you're starting to see why I say that. And I hope that the government consultation will improve that somewhat.

• 28:45Speaker 05

  Why isn't a council tax a flat rate, given we all benefit equally for its service? It must be police, fire services, bin collection, etc.

• 28:53Martin Lewis?

  Well, do we though? Do, do people, whether more people in a household, you would argue, probably use more services, lower income households probably use more council services than other services. All of those things are part of the political equation. But why is it because, it's what I've just explained, because it was, because it is, and there was riots when it was done on a single person basis, which was regressive, the single, the poll tax was a regressive tax.

• 29:15Martin Lewis?

  From me talking council tax with Adrian. Now let's move on to when I discussed mobile bills with Casa Alom, who was standing in for Adrian, and a good job he did too.

• 29:27Martin Lewis?

  The important thing people need to understand about what's going on in the mobile phone market is it is split. Many people will know, many people have got angry and got in touch with me about the fact that for the last few Aprils, consistently we have had above inflation rate price rises for people who are in contract on mobile phones. So even though you're mid-contract, I mean, a couple of years ago, they were up at 18%, they were less this year, you can have your mobile phone bill increased and you can have it increased by above inflation, which is absolutely infuriating for many people. Now, the rules have changed on that. Now, for people on new contracts, they have to tell you in advance what the rises will be during the contract period. So that should be set out for you in advance once you sign up.

• 30:12Martin Lewis?

  For those people still on existing contracts that happened before roughly the start of this year, then you can still have the above inflation rate rises that are going on. But the really important thing to understand on this is that's about people who are within contracts. So prices have gone up and up and up and up if you're within a contract. But at the same time, we've seen the prices of the cheapest SIMs. Now, a SIM, remember, is the little chip, although in some cases now it's a virtual chip, it isn't a physical thing, that gives your phone its identity, i.e. which network you use and what tariff you're on, so how much you pay for data or calls or texts if you were to pay for them. And those prices are a fraction of what they used to be.

• 30:54Martin Lewis?

  You can currently get 150 gig of data. That is more than enough for everybody but the very hardcore, hardcore downloaders who are out there in a month, unlimited minutes, unlimited calls, and it includes EU roaming for around £5.50 a month equivalent. So anybody who's paying more than that right now, there's an argument to say you have to ask yourself why. Now, it may be because you're in contract, but if you're not in contract, everybody should be looking to see if they can get a better deal because those SIM prices have been slashed in the last year or two. So step one, and the most important step is, are you free to switch and save? And we can do this, most people can find out in just five digits. Obviously, if you're

• 31:38Martin Lewis?

  on pay as you go, you're not in a contract, you're fine. But if you're on a contract mobile phone, what you need to do is text info for free, it doesn't cost you anything, so I N F O to 85075. This is an Ofcom service, and once you do that, they must text you back and tell you whether you're out of contract. Now, unfortunately, they don't express it as clearly as I would like them to. What you're looking for on there is what are your early termination or your early cancellation charges. So if it is zero Early termination or zero pounds early cancellation charges. That means you are free to move. You're one of 14 million people who are out of contract.

• 32:21Martin Lewis?

  And the likelihood is the vast majority of people who are out of contract on their mobile phone are either being ripped off or are ripping themselves off by not acting. Now, I do need to do a few caveats on this info to 85075 thing. First of all, if you're with three or Smarty or ID Mobile, you will need to reply with your date of birth to prove your identity. And if you're on a multiple phone contract, so you've got two phones on a household bill, then they don't have to answer you. They will just say, sorry, you're on a multiple phone contract. We can't answer you. But my general rule of thumb is if you've been with the same provider and haven't shifted tariff for two years or more, you're almost certainly out of contract. Now, what is interesting on this is I put this out on social media on a little video yesterday,

• 33:06Martin Lewis?

  and I've had quite a few people saying to me, it doesn't work. Now, I have to say, the huge majority say it does work and it is free. But I've had lots of people saying, they tell me I have to pay for the text. You shouldn't. They tell me they can't give you an answer. They should. So what I'm doing with my team at the moment is we're compiling the data in which providers that is, and we're going to go to the regulator with it. That isn't to put you off doing this. It's just a text. Just do the text. Info to 85075.

• 33:31Speaker 06

  I had a few messages already coming in on this saying, just did the text as Martin suggested. They replied instantly telling me to leave would be for free. Currently paying 27 pounds a month.

• 33:42Martin Lewis?

  Oh, hold. Stay, we are saving you money. I mean, 27 pounds a month. Let's just, let's just examine that for a moment. Why would anyone be paying 27 pounds a month? Well, first of all, because they're still paying off their handset. So you're within contract and you're paying off your handset. That isn't happening here because you're out of contract. Second, because you have some type of huge data deal on a specific service. I still can't see why you're paying 27 pounds a month. Third, because you've got some type of huge international roaming deal. But again, I still can't see why you're paying 27 pounds a month. Basically, if you're out of contract paying 27 quid a month, for me, you are paying massively, massively even, over the odds, which is why I'm going to go straight on to step two.

• 34:27Martin Lewis?

  Let me just run through some of the deals that are available now. What I need to explain about the best mobile phone SIM deals. You will generally not get them direct from a provider. If you go to a provider, they will just tell you their cheapest tariffs. The problem with that is all the discounts and the real savings come from promotional deals on top of the tariffs, but you don't get those direct because if you get them direct, they have to offer them to existing customers who are out of contract. They don't want to do that. So they put all their promotional deals via comparison sites where people who are more price sensitive tend to go. So they try and win the best of both worlds. Existing customers who are just going to lackadaisically renew a contract, they get to give their tariff

• 35:09Martin Lewis?

  rates, but those customers who want their business to be fought for, well, they can get the cheaper deals, but only via comparison sites. Now, many of these deals are uber short-lived. They can only last a day or two and it changes all the time. So the deals I'm going to give you, see them as examples rather than recommendations and prices differ on different comparison sites depending on the deal that they have. But I'm going to give you the cheapest rates available at the moment for a range of different SIMs. Let's start Labara, which has a Vodafone signal. You can get 35 gig of data, unlimited minutes, unlimited of calls and unlimited texts, all unlimited calls and texts. I won't say that again. For about, well, what actually

• 35:53Martin Lewis?

  happens on this one is you pay about one pound for seven months on the cheapest deal. Then you pay about four pounds a month for the remaining five months of your contract, averaging over a year, and it's three pounds 22 a month for 35 gig. We could then move up O2, which is about nine pounds a month on a 12-month contract for 45 gig. And then cheaper than that, on 3 signal is ID Mobile currently giving 150 gig. Now, what you actually do is you're paying about 12 quid a month, but you can claim via some comparison sites up to an 80 pound Amazon voucher. If we factor that in as cash, while over the 12-month contract, assuming you would spend that at Amazon anyway, it's equivalent to 5 pounds

• 36:37Martin Lewis?

  34 pence a month for 150 gig of data, unlimited minutes, unlimited texts. I mean, so 27 pounds a month. What are you getting for your 27 pounds a month? You're free to ditch and switch, would be my point. Step three is all about the things that people get back to me and say, which is... Yeah, it's all very well you saying I can get it cheaper elsewhere, but I'm worried about changing my signal. I'm not sure I'll get the same signal if I go to and move to a different type of place. It's all going to be a little bit tricky. So my big answer to that is to understand that currently there are only actually four networks in the UK. Vodafone 3, EE and O2. And Vodafone and 3 have just agreed a merger, although they're going to operate as separate brands, but their signal may be merged in

• 37:21Martin Lewis?

  time. Now, each one of those networks has its own infrastructure. So when you're using a mobile phone in the UK, you are using one of those four networks' infrastructure, no matter which network you're actually paying. Because that's because every other network is piggybacking on one of those signals. So my answer to those who don't want to switch signal is, is you can switch firm without switching signals if you restrict your choice to only the piggybacking networks using the same signal as you're currently on. I'll just give you some examples of this. If you are on EE at the moment and you like EE,

• 38:01Martin Lewis?

  you could look at WOMP Mobile, EcoTalk, Talk Home, Utility Warehouse and your Co-op. If you're on O2, you could also look at GiftGaff and Sky Mobile and Tesco Mobile. If you're on 3, you could look at Honest Mobile and ID Mobile and Smarty and Superdrug. If you're on Vodafone, you could look at Asda Mobile and Labara and Talk Mobile and Voxi. So there is a lot of choice and some of the good comparison sites will enable you to limit your search to only the providers using the same signal as the one that you are currently on. So my answer would be, to those people who are saying, "I don't want to switch because I want to keep my signal", well, just look at, keep your search to the piggyback networks using that signal and you may well find there's one a lot cheaper available.

• 38:47Martin Lewis?

  If you want to keep your number when you're switching, you text PAC, which stands for Reporting Authorization Code, but you don't text that, you just text PAC to 65075. Your firm will, and what it's supposed to do, is send you a porting authorization code, which you can then send to your new provider to transfer the number over, usually in one working day, but often less. But- What's fascinating here is when you do that text, and some people get the same thing when they do the info text at the beginning to find out whether they're out of contract, many people find their existing phone and their existing network offers them a better deal at that point. It's almost like you're instigating a haggle. And so merely,

• 39:30Martin Lewis?

  I mean, if you really wanted to be play this and you could just cut out all the other steps, if you want to stick with your existing provider and text PAC to 65075 and just see if your existing provider, assuming you're out of contract, offers you a cheaper deal. It may well do. And if you want to stick with where you are, it's a very easy way to haggle. I mean, the other way is you go through customer retentions and you ask them for a better deal. So yeah, so the final step, if you want to move your number across, text PAC to 65075, but don't be surprised if your existing network goes, please don't go, please don't go, don't go. We'll give you a much cheaper tariff if you stay.

• 40:06Speaker 06

  Got a couple of success stories from people who you step for, actually. Heather says, I followed your advice and applied for my PAC code. Within two minutes, EE phoned me asking to stay. There we go. They cut my bill by £20 a month, all sorted within five minutes.

• 40:20Martin Lewis?

  £240 in five minutes' work, that'll do, won't it?

• 40:22Speaker 06

  That'll do, absolutely.

• 40:23Martin Lewis?

  £240 a year.

• 40:24Speaker 06

  Stephanie's also said, I was due to upgrade my phone and plan with EE, requested my PAC today, then went on to check my upgrade prices and they had reduced them by £40 compared to two days ago.

• 40:38Martin Lewis?

  That's it for this week's Best Bits of Bills special. If you enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. And if you're not subscribed, or maybe they're not subscribed, you can do that quite easily. We tend to put out a new episode every Thursday.

• 41:07Speaker 03

  Martin Lewis is the founder of MoneySavingExpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing [email protected]. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

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  Listen to The Haunted Library wherever you get your podcasts, or find us on YouTube.