Life lessons for all ages! A warning if you’ve booked a holiday, and no standing charge tariffs?

Martin Lewis tells us his four life lessons he gave to graduates recently, so we asked you for yours! Plus, Martin’s annual warning if you’ve booked a holiday, an update to Ofgem’s no standing charge tariff for energy, and Mastermind is all about borrowing: does the length of a loan matter more than the interest rate? You’ll have to listen to find out! If you want to ask Martin a question, you can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!). So, if you’ve always wanted to know his go-to dance move, if he knows the secret to parallel parking, or have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

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

• 0:00Speaker 00

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• 1:48Martin Lewis?

  You need to get your travel insurance A S A B.

• 1:53Speaker 03

  You're the lucky one, and you should get back.

• 1:55Martin Lewis?

  This is my five minutes of processing time.

• 1:57Speaker 03

  If I'd bothered you that time, you would have certainly told me to bell top. You've triggered me a bit, you know.

• 2:02Martin Lewis?

  That's done with love and kindness.

• 2:04Speaker 03

  Toflop.

• 2:05Martin 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 Five Live show with Adrian Charles, but there's also bonus money-saving tips just for you lucky, lucky podcast listeners. In today's pod, an important warning for anyone who's booked or is booking a holiday abroad at the moment. Then the big one, life lessons, four from me, but most from you. With the wisdom of experience, what lessons have you learnt that you'd wish to tell your younger self? Whether money issues, work issues or more, it is a fascinating listen, whatever your age. This week's mastermind is all about personal loan interest. And to finish, where are off gems promised new low or no standing

• 2:50Martin Lewis?

  charge energy tariffs? Play the theme tune.

• 3:07Martin Lewis?

  We have to stop cock news. We can always have a bit of stop cock news. There's never too little time for a stop cock.

• 3:14Speaker 03

  I'm going to remind you that the second syllable there are always autocorrect. Wait, it doesn't autocorrect, it just gets blanked out by our.

• 3:24Martin Lewis?

  Stop mail chicken if you want to write it.

• 3:26Speaker 03

  Stop mail chickens is what it says. But just catching up on your podcast, strangest place I found a stop cock was plastered into the wall with a skirting board over it, the wall in the cover. It took four years and visits from three different plumbers to find it and cut into the wall to uncover it. Sleeps so much better now I know where it is. Sweet dreams to Robin. Robin said she's in Scotland.

• 3:51Martin Lewis?

  Wow. So I think that was about six weeks ago before Christmas, we were talking how it's very important in this winter period when it's cold for everyone to know where their mains water off switch or stop cock is. And we were talking about where you find them and found them. But plastered in a wall is not good. It's not very helpful. You also need to test whether you can actually turn it off and on. And it's not, you know, so if that horrible moment comes when you've got a leak, you can just go, stop the water and stop the damage. Costs thousands of pounds sometimes to leak damaging houses if you don't know how to turn your stop cock off.

• 4:23Speaker 03

  Okay, now we've had a lot of people getting in touch with their debt-free stories. This came to you on your Question Time podcast, and there's one you want to play us.

• 4:33Martin Lewis?

  Well, yes, so this all comes from people hearing the wonderful story of Robert in Glasgow, who came on our Question Time podcast and told us how he was finally debt-free for the first time in his adult life, and wanted to ask me what he does next, but his tale was inspiring. We'll just play a little bit of it.

• 4:51Speaker 04

  I'm 42 just now. I live with my wife and my 10-year-old daughter. I work in the civil service by day and have done so since I was 18. Now, during that time, I've been promoted a few times, and I could probably say that I earn a reasonable salary when compared with some.

• 5:09Martin Lewis?

  Good for you.

• 5:10Speaker 04

  However, when I was 18, I made quite a few poor financial decisions, I'll say, and debt began to build up. I refinanced this several times, and things just got worse and worse. I then got used to living in credit and having that revolving credit and never actually having access to my full salary. And that situation continued until my mid-30s. And really, around about then, I began to get sick of it, and I decided to do something about it because I was really struggling quite significantly. So I took your advice and contacted Step Change, who then helped me through some things. And basically, for

• 5:54Speaker 04

  the last five years or so, I have been using a significant proportion of my salary every month to pay down my debts. And next week is my final payment.

• 6:04Martin Lewis?

  Oh, your debt-free day?

• 6:07Speaker 04

  My debt-free day, yes, will be next week.

• 6:09Martin Lewis?

  Oh, I love it.

• 6:10Speaker 04

  And I'm very much looking forward to it. Thank you. So really, I have, I will have, I don't have just now, any credit cards, any car payments, any loans, anything like that. The only thing that's there now is my mortgage, which is fine. So really, my question is, what now? What do I do when I have no secure debt? How much should I save or invest? How should I allow myself luxuries? I know that these might to some people sound like some kind of silly questions. Um, but literally at no point in my adult life have I worked and had no debt. Um, and perhaps my family background, money was always a problem as a child for my parents. Um, and so I've never really seen that positive um financial situation.

• 6:55Speaker 04

  So how do I go about living the rest of my life, enjoying this kind of newfound freedom whilst building a future for my family? And perhaps most importantly for me, being a positive role model financially for my 10 year old daughter for the future. So that she doesn't have to go through what I have been through.

• 7:12Martin Lewis?

  Wow. So there you go. Uh, and that was just the start of what turned into about 10, 12 minutes. And we heard far more about Robert and his tips for those people who are in debt. And the reason I wanted to play that now is at this time of year, many people, the credit card bills from Christmas are coming through the door. Many people are struggling and they're stressed and they think there's no route out. Well, go and go on and have a listen to that question time podcast that we put out on Monday. Listen to the full story with Robert. It's the the last question in there. I think it starts about 20 minutes in and to hopefully feel inspired to know that there is light at the end of the tunnel. It takes some work and it's not easy, but there is light at the end of the tunnel.

• 7:51Speaker 03

  I mean, that that would be my sort of tell us question about what advice you'd give your younger self or your equivalent is that.

• 8:00Speaker 03

  I mean, you see, it's not necessarily from my own experience, but I see it in a lot of people around me that once you get into debt. A, do not, do not put your head in the sand.

• 8:10Martin Lewis?

  No, no, never. You need to communicate. You absolutely, absolutely.

• 8:14Speaker 03

  B, I've also noticed this thing where you're in, you're in debt and you're miserable. So you think, well, I'll never repay what I've got to repay. I might, so I need a new telly. What's another, you know, what's another grand or something? I'm so far in debt, another grand's not going to make any difference. So you get more in debt. I've I've really seen that a lot.

• 8:34Martin Lewis?

  It's interesting because in in in the podcast, the question time podcast, I actually talk about this. And a lot of people think, you know, I'm about saying, don't spend any money. I'm not that. That just isn't what I care about. What I care about is maximizing happiness and debt is miserable. And the gain you get from buying consumer items and putting things into debt. Does not, the happiness you get from that does not offset the misery of feeling constantly under pressure and chased because of your debts. So when you are in debt, actually working towards getting yourself out of debt is the right thing towards maximizing the happiness and utility in your life. And then what we moved on with Robert is to talk about, okay, now he's got this wonderful sense of financial discipline because he's had to have it for

• 9:19Martin Lewis?

  so many years to get himself out of debt. What does he do with that debt, that financial discipline to now get himself some happiness? And that's what we went on to talk about.

• 9:29Speaker 03

  Let's move on to travel insurance. January, big holiday booking month. Many have booked their summer getaway. So you've got your warning at this time of year.

• 9:37Martin Lewis?

  I do this every, this, this time every year. The key warning is you need to get your travel insurance ASAP, as soon as you book. And if you've already booked and you don't have travel insurance, you need to do it now. Now, the reason for this, it is very simple. And I'm going to do it from what, you know, my personal experience of what happens to me each year. Sometime, and we'll probably get one in the Question Time podcast this year, someone will get in touch with me, it'll probably be June or July, and they will say something like, I've booked my main summer holiday, we're due to go away in six

• 10:16Martin Lewis?

  weeks' time. Last month, I was diagnosed with a cancer, a leukaemia, some form of serious illness. We now can't go. I've been in touch with the flights and the hotel and they say that we can't cancel because we didn't have cancellation. What are my rights? And my answer back to them, unfortunately, and it's not with lack of sympathy, it's explaining the rules is, there is nothing faulty with the flight or the hotel. And the analogy I always use, because it works, is if you bought a tennis racket and you broke your arm, you couldn't take the tennis racket back for being faulty. The issue unfortunately is with your

• 10:55Martin Lewis?

  health. And therefore, you don't have a right to a refund on your flight or your hotel. This is what travel insurance is for. Now, some I say, have you got travel insurance? They say, yeah. So go talk to them. And some I say, have you got travel insurance? They say, no, I was going to book it just in a couple of weeks before we went. That is the nightmare. That is why it's ASAB. And if you have a holiday booked right now and you do not have travel insurance, you are both taking more risk than you need to, but also losing value. Because half of what you pay for in travel insurance is the protection in case something happens before you go that stops you going away so that you're covered. Now, look, I need to be honest, it's not perfect.

• 11:40Martin Lewis?

  Some firms may cancel cover if you're diagnosed with a serious illness before you go, but then there are rights that are involved within that. But absolutely the best practice is to get your travel insurance ASAB. And what does that mean? Well, if it's a single trip policy, that simply means if you're going away on the 1st to the 15th of August this year, you go and buy a single trip policy to cover the 1st to the 15th of August, you pay for it now. The fact you've now paid for it means you have got your travel insurance policy, you're fulfilling ASAB. It's a little more complicated with annual policies, but I think we've got some questions on that, so I'll just, I'll hold my fire for a sec.

• 12:22Speaker 03

  Okay. Kyle Pachinko, great name. If you have an annual policy that finishes, say, at the end of March and you're booking a holiday for May, should you take out a new policy that starts on the 1st of April? What if something happens in February that requires you to cancel your May holiday? Will your existing annual policy cover it? Or the one that doesn't start until April? Or neither?

• 12:49Martin Lewis?

  Okay. So with annual policies, these are policies that will cover all the trips away you make within a year with certain conditions. You should have a live policy covering all the time up to and including the end of your trip. So that means if you don't already have one, get an annual policy starting the date that you book, or if you've already booked, starting today. Not the day that you go away. You don't just say, you book an August holiday. And you don't think, right, I'll get a policy to start the first of August. No, because then you're not covered beforehand. So it's slightly different rules to annual. If you've already got an existing policy that covers you beyond the date you return from your holiday, great, you're done. But if your existing policy ends, existing annual policy ends before you return

• 13:34Martin Lewis?

  from the holiday you've booked, you will need cover that runs straight on after. So either renew or take out a new policy to start the day your old one ends. So I'd probably do it the day before. I'd have it starting sort of on the day your old one ends rather than any any gaps. Now, most annual policies do not exclude issues that happen within the cover year for booked trips, even if the travel is after your renewal date. In other words, you've got a holiday in August, you've booked the holiday now, your annual policy runs until April, something happens before April that stops you going in August, you should be covered with 95% of annual policies. But of course, it is worth you checking that. So that's how

• 14:19Martin Lewis?

  I would do it in that case. So yeah, you would want a policy that covers you from the first of April. You can normally buy annual policies up to 90 days in advance. So you probably couldn't quite get one now, could you hold on? No, you couldn't quite get one now, but you probably want to be starting to look for one and get that cover booking to start on the first of April from the beginning of February, when you can do it. But if anything better happened beforehand, hopefully you've got one of the normal now in your policies and you would be covered if something happened to you now that stops you going away on the holiday that you've already booked. But what you can't do is have overlapping policies. Well, all you'd have is a jurisdictional issue. And in fact, if I'm really honest, one of the frustration, if you're in that position, while it may not be the cheapest

• 14:59Martin Lewis?

  route, then the best thing to do is to have the same policy starting the next day. So no, if you're with Adrian Insurance on its gold plan, and its gold plan will be a great plan. So then, and that ends on the the twentieth of April, then you want a new policy starting the next day with Adrian Insurance. Why do I say that? Because then you don't have jurisdictional issues. So what you may have isn't if you've got two policies running is you could have each of them arguing that the other one should pay out, therefore they won't pay out. But if it's with the same company, you can't have that jurisdictional crossover.

• 15:34Speaker 03

  Okay. Alan says, if you book a holiday with an annual travel policy in force, but that policy expires before the holiday is taken, and you take a new annual policy with a different provider, who do you claim from if you're unable to take the holiday for medical reasons? This this is related to what you're saying.

• 15:54Martin Lewis?

  So my answer would be, I would go to the policy that is in place on the date the issue happened that stopped you going on your holiday. So again, we'll do that, the cutoff the twentieth of April. If your medical issue that stopped you going away, you know, heaven forbid you're diagnosed with cancer on the twentieth of March, then you would notify your travelling insurer at that point that you wouldn't be able to go on the other holiday, and you would notify the one that is in place on the twentieth of March, not the one that comes in place on the twentieth of April. Did that make sense? Good, okay.

• 16:28Speaker 03

  Okay, Delta Ferguson, how long after something has been on your medical records do you have to declare it? If you had a cancer diagnosis in 2000 and have been in remission since 2005, do you still have to declare it, or is there a point at which it no longer counts?

• 16:45Martin Lewis?

  You're going to hate my answer. My answer is, it depends on what they ask you. You know, when you are filling in an insurance form, if they ask you questions, you need to answer those questions honestly. And lack of declaration can be a problem. So you need to read what that insurance firm's request is, and and check with what that insurance firm is asking you.

• 17:09Speaker 03

  So on, but it sounds like you're saying that on balance, on the side of declaring.

• 17:17Martin Lewis?

  Okay, yeah. But but but it depends what they're saying.

• 17:22Speaker 03

  I mean, you'll hate this question, but but how could they know? I mean, how far can they go back into your medical records? To some I thought they were, you know, it always worries me that they're not confidential. I understand why it's relevant here and it's impractical. But, you know, your your medical records are your own, aren't they?

• 17:41Martin Lewis?

  Well, your medical records are. What would happen here is this is an issue that if you have a dispute and it comes out later that you had treatment and it would be worked out, then you could be done either if you deliberately did it for fraud, or they could simply say your policy is invalid. That's what we want to avoid. Now, I don't want to belittle the enormous problems that we have with pre-existing conditions out there. You know, I'm involved with my charity hat on. We see some people who've had past bipolar issues that they haven't had for years being charged 25 times more than everyone else, even though the risk, the increased risk for the travel insurer is definitely not 25 times. And it's something I'm looking for the charity to do a super complaint on to investigate. There are huge problems with that. But all I can answer is, you've got

• 18:25Martin Lewis?

  to be honest. Because if you're not honest, the likelihood is, if they if they can't say they think they spotted a rat, you're going to be in trouble.

• 18:35Speaker 03

  Okay, Charlotte Byrd, if you buy an annual couple, husband and wife policy, does it cover you if just one of you goes on a trip? Or is it just for joint travel?

• 18:44Martin Lewis?

  So 95% of annual policies for couples will cover you for both travel together and independent travel. But again, it's not every policy. It's almost all policies will. And you don't need to notify if you're travelling independently. It is different if you have if you had a child under 18 who was travelling independently, you would then, i.e. you know, your child's going on holiday with another family or something, you would need to call the insurer and check that they were still covered. But as an adult, generally, independent travel is covered within a couple's policy. But you'll forgive me for saying check. But

• 19:26Martin Lewis?

  the one thing I will say, you know, modern technology can help here. If you're struggling to be able to understand the ridiculously over long terms and conditions of your travel insurance policy, take that PDF, put it into a Gemini or a ChatGPT. And then put that document in and then ask it the question, or at least ask it to point you to the relevant paragraph. So if you don't trust the AI, you can read it for yourself, and that will hopefully help you navigate through it.

• 19:54Speaker 03

  And how long do the TNCs tend to be on these policies? Are they ludicrously like sort of iTunes long?

• 19:59Martin Lewis?

  Well, you get basic cover levels and then you get very long pages of legally small. Yeah, you know, eight, nine, 10 pages of really quite dense and tough to get through stuff. Yeah.

• 20:09Speaker 03

  Well, this time last year, I got caught, nearly got caught out for something that must catch a lot of people out when my daughter was going away travelling for several months. And I thought, oh, I've got, she's on an annual policy, so that'll cover her. But then of course, then.

• 20:23Martin Lewis?

  90 day trip maximum, they often have.

• 20:25Speaker 03

  Yeah, yeah. I mean, for once, I checked probably because of something you said. And I mean, she would have essentially been going away sort of without cover.

• 20:36Martin Lewis?

  Yeah. So that you need backpacker insurance for that. I mean, it's a different type of policy. And you know, there are so many things people don't understand. There's like groups policies as opposed to family policies. If you're going away as a group and you're not all in the same family, you just need to check these things out when you're going through it.

• 20:53Speaker 03

  Elizabeth Britland has a 90 day policy for, is a 90 day policy for 90 days in one year, or can you have several holidays in a year for up to 90 days at a time?

• 21:06Martin Lewis?

  You'll forgive me doing my same caveat again at the start of that. In general terms, 90 day cover would mean you can, on an annual policy, you can take as many holidays as you like in the year, and the holiday can be a maximum of 90 days in length. There may be conditions about how long you then have to be back in the UK for. All of those things are possible, but 90 days would generally be the length of an individual holiday. So if that's what the cover is telling you. So you could go away under that policy for 90 days to the States and 90 days to Africa and 90 days to Asia, as long as you've got the right amount of time covering you in the gaps in between back in the UK. That's generally what it means. But check your policies, never assume.

• 21:49Speaker 03

  And if, if you make a claim, God forbid, something goes wrong, and it doesn't matter what the, what the issue is, but you then. You know, what a surprise, then get into a squabble and they say they won't pay for whatever reason. They might be justified in that or they might not. But if there's no resolution, where do you take your complaint?

• 22:09Martin Lewis?

  Really good question. Anything to do with a regulated financial firm means you have a right to go to the Free Financial Ombudsman, including if you dispute whether they have paid your claim or not. So you can absolutely, if you believe your claim has unfairly been rejected, you would then formally complain about that to the firm. If they reject your complaint, then you have a right to go to the Free Financial Ombudsman Service, which will impartially adjudicate and can order the firm to do whatever it thinks is right in those circumstances. The only time that is a problem in travel insurance, and this is something that we have really pushed hard on, and we haven't got a resolution

• 22:49Martin Lewis?

  yet, and there was a case of this, is heaven forbid you had an accident abroad and someone was in need of life-saving treatment abroad that the travel insurance needed to pay for, and the travel insurance said no. Well, unfortunately, the protocols at the ombudsman are not quick enough. You know, if you've got a two or three day, we need this surgery, they won't pay for it, we can't afford it, it would generally be America because that's where surgery is really expensive. Then there is a problem in the protocols because you can't wait the formal complaint in eight weeks once the firm's turned it down. And we've been calling for an escalatory procedure to be put in on that.

• 23:25Speaker 03

  And there must be ranking somewhere that you provide or others, which travel insurers tend to generate the most complaints and which ones tend to pay off?

• 23:37Martin Lewis?

  I mean, when you're going through travel insurance, I list two types of policies. I go through it. We have no frills, which are basic. Do they fulfill the cover levels that we require and are cheap and cheerful and they've got to be FCA regulated so that they can complain if there's a problem? That's basically, you know, you're very simple, like just getting it just in case it's going to be cheap. Or you can go for value insurance. The problem with insurance and the problem with travel insurance agents, pretty simple. When we're insuring, we're insuring for an outcome that we don't know what it is. So therefore, we don't know what to check for. And people were not checking before that Icelandic volcano. When was that? It was about 2016? They weren't checking whether they were covered

• 24:18Martin Lewis?

  for their flight being stopped due to volcanic ash. And there's known unknowns and unknowns unknowns, as Donald Rumsfeld said. And the problem with insurance is you can't check for the unknown unknowns. So what we do in our value cover is we look at a range of issues and see, do they tend to pay out in those circumstances when something unusual happens? But insurance is not foolproof, but it's absolutely worth happening if you're going abroad. You know, you're talking for a single trip Europe for someone who's relatively young, nine quid for a week? Just get your travel insurance and make sure you've got your E-HIC or G-HIC card if you're going in the EU as well.

• 25:00Speaker 03

  I saw you do that speech at University of Sheffield. I meant to watch it properly. I was watching a bit of it, when you had to give your five life lessons to graduates.

• 25:07Martin Lewis?

  Yeah.

• 25:07Speaker 03

  And that's given you, just given you an idea for our tell us today.

• 25:12Martin Lewis?

  So the tell us is, I was going, I was very kindly honoured by the University of Sheffield who gave me an honorary doctorate of letters and I was speaking to a postgraduate graduating ceremony on the back. And I thought on the way, I had five, six minutes, what would I talk to them about? What life lessons would I have liked to have known when I was leaving my undergrad or my postgrad degree that I could tell them? And that is what this week's tell us is. And we have had a huge response on it. What life lessons would you say that you've learnt now that you wish someone had told your equivalent younger self? Although it's slightly technical because it's for younger people today, but sort of if you were that young today, but then we're getting into all different realms. So I will start with my first one before we get into, we get into the listener ones. And my first

• 25:55Martin Lewis?

  one is that it takes four things to be successful. It takes talent, but lots more people have talent than they think. It takes hard work. I'm sorry, I don't believe all those people who say, hey, it just happened naturally. You don't have to work hard. I mean, it's it's you you're working and you're grafting. And when I was building my career up and building my website up, you know, it was seventy, eighty hours a week and and sacrifices everything else.

• 26:22Speaker 03

  Yeah, I mean, like you, just briefly, you're so right. I just want to say you're so right because like you, I've met a lot of very successful people. There are none of them that for a long period of time haven't absolutely worked their backsides off. You know, I mean, really put a shift in for a long period of time.

• 26:39Martin Lewis?

  Focus is next. No one is clever enough to be brilliant at everything. So zone in, focus in on what you're good at, the narrower you go, the more chance you have of being successful at it. And then the most important one, Adrian, and this is the one you have to remember. The most important part of the recipe to be successful is luck. You can do everything right, but it still may not work for you. So we have to accept that luck plays a big role, and it certainly has in in what I've done in my life. And so on the back of that, failing does not make you a failure. It can help you learn for the next time. We also have to accept the fact that we're talking about success and pushing to the maximum level.

• 27:24Martin Lewis?

  But success in itself can be a stress and it can be stressful and you have to question how hard you want to push. And whether you actually want to balance, you know, have a good work life balance and balance happiness with success. Success shouldn't necessarily be the aim. And when I'm talking success here, I'm talking financial and career and right, you know, the the uber success coming at the top level. And the final one I would like to say, and I've been very lucky to have been very financially successful in my life. If you find success and it pays.

• 27:56Martin Lewis?

  Remember the luck part and give back because there is a moral duty to understand that you're the lucky one and you should give back. So that was my first tip.

• 28:05Speaker 03

  Martin Graham Hutton says not working is an important part of working. So many people these days don't switch off properly from work during the evenings and at weekends. Taking proper breaks is important for keeping fresh and keeping sane.

• 28:19Martin Lewis?

  I couldn't agree anymore and I need to continue to learn that lesson myself. Graham Hutton's fascinating. That was my economics teacher in sixth form. I wonder if it's for you, Mr. Hutton. Maybe it is, maybe it isn't. I have no idea. Look, I try and sign off social media every weekend. Some people say why I do it and the reason I do it is because when you do what I do, you often get very desperate people and they get very angry that you haven't replied. So I like to have a clarity that I'm off social media. It doesn't mean I don't work sometimes at the weekend, but I actually find that detox is really important. And you know, old religious ideas of the Sabbath have some wisdom in them that there should be a day or two days, hopefully in the modern world, where we stop. And that's not accidental. That is how we're built.

• 29:02Speaker 03

  I did an interview yesterday with a neuroscientist about a book he's written called Why Doing Nothing Can Change Your Life. That was on at eleven thirty-five yesterday. If anyone wants to go back and listen. And he made the point how important it is to have moments during the day, even at work, just stare out the window for fifteen minutes. Go for a walk and just try and empty your mind and think of nothing. That'd be so beneficial for your work.

• 29:25Martin Lewis?

  They teach kids these days, don't they, that if you want, that retaining information is sometimes about doing that, is not just keeping going, stopping. It was funny because I hope my mate Mike who works with me on my show is the, the current affairs, he came in the other day when I was doing the show and I'd been through the rehearsal and where we walked through the staging and everything and I was doing it and I was thinking about what was going on in the show and I'm sitting in the green room. And I have this five minutes to have my, to have my food before we carry on. There's absolutely no, and I like that five minutes down to, and it came in, he started chatting with me. And he's a lovely fellow, but I just wanted to say, this is my five minutes of processing time. Just, just it's the one time I'm not doing anything and I just need to get everything right in my head. I do think it is important, yeah. Anyway, we'll move on.

• 30:09Speaker 03

  Okay. I mean, if I'd bothered you at that time, you would have certainly told me to bell top. So I must meet this man who's got this level of authority on you. That's interesting. Emma Rommel says, start saving, pay a pension at eighteen, always have a thousand backup in the bank. Get those driving lessons and tests, take your holiday entitlement. And also think about moving out of London to get on that property ladder.

• 30:31Martin Lewis?

  Well, there's a lot in there, Emma, and that got a lot of likes on social media. So pay a pension at eighteen. I'll just take that one. So we have auto enrolment in this country. That means if you're an employee. Then and you the and you're earning over ten thousand pounds, your employer. You will automatically be contributing to a pension and your employer will have to match to an extent those contributions. You put five percent in, they put three percent in. If you're eighteen and you're earning over, I think it's roughly six and a half thousand pounds. You are not opted into a pension, but if you do opt in, your employer still has to do the matching contributions. Now, I actually think we should pre-stend the rules because it starts at twenty two auto enrolment. I think because the earlier you start putting money in your pension, the longer time it has to compound.

• 31:13Martin Lewis?

  So I totally agree with that. The thousand pound backup in the bank. Only disagreement is, I would say, three to six months' worth of bills is a better aim. Than a set thousand pounds because it depends on circumstances, but absolutely, Emma, good for you.

• 31:26Speaker 03

  And Elise Everett Stevens says, look after your mental health. It takes strength to ask for support. Good managers don't make you feel worthless. Stand up to them if you can or change jobs.

• 31:37Martin Lewis?

  I agree and hasn't hasn't society changed in the thirty years since we started work with mental health? I obviously have a mental health, money and mental health charity. It's a big part of my life and I've had my own dark days. And I think that, you know, it is important that we acknowledge that we're not always having a good day.

• 31:53Speaker 03

  Also, I just think it'd help if, you know, when we're thinking what we want to do when we're like twenty, twenty-two years old, whatever. I want to be successful. I want to be successful. And you're told you can be as successful as you want to be. You can achieve what you want to achieve. I just think the best thing to say would be. Would be you can be as happy as you want to be.

• 32:12Martin Lewis?

  I agree. And actually, I think it's interesting, the people who say, don't let them stop you. You can do anything and look what it happened to me. And I'm just like, we never hear from the people who were brilliant and hardworking and focused. And who it didn't, weren't successful. And not everyone is going to achieve that. So. You know, happiness is where I sort of started as a better aim. Shall I do my next method of mine now?

• 32:35Speaker 03

  Yeah, go on.

• 32:36Martin Lewis?

  So my next thing that I said to these graduating classes, protect your reputation now for later life. Those leaving university in the moment are the first truly online generation. Every moment recorded, every second mapped. What you do now will likely last in perpetuity. It can be used when you apply for jobs, when you write your first article, when you run for office, when you release your first album. So enjoy yourself, but be circumspect. Don't screw over your future self with five minutes of madness. And it is a changed world that we live in. We were very lucky when we grew up, there weren't cameras recording every single moment.

• 33:19Martin Lewis?

  And some of those moments, if they came out now in our careers, would be very unpleasant for us. But the younger generation don't have that luxury and they need to be aware of it.

• 33:28Speaker 03

  Interesting. Russell, when choosing a career, don't worry about what you're good at. Humans become good at everything with practice, so just pick something you enjoy. In ten years, you'll be incredibly good at it. And when you're good at something you're passionate about, things get really interesting. Well, there's a lot to unpick, a lot to unpick there.

• 33:50Martin Lewis?

  Well, I think there's certainly wisdom. I actually might move to one of my other tips on the back of that because I think it links. This was my fourth one, but we'll do it third because we're nothing if not flexible age.

• 34:00Speaker 03

  We're not.

• 34:01Martin Lewis?

  You know, there's another life lesson.

• 34:02Speaker 03

  Yes.

• 34:03Martin Lewis?

  Don't be afraid to change path. I did. When you leave school or university, you are being born again into a world of work. You are a newborn just starting out. I hope that whatever you choose to do goes well and you're happy and content with your choice. But after a couple of years, once you start to have an understanding of the world of work and the way it operates and what's going on out there. It is worth assessing again, is what you're doing really right for you before you get locked in forever? And if you're waking up miserable going to work. Don't feel locked into the unhappiness. See what else you can do. Test the waters and be fluid.

• 34:44Speaker 03

  Yeah.

• 34:44Martin Lewis?

  I changed career at the age of twenty five. I was working in financial P R. I got told I would maybe one of the youngest partners ever at the firm. And I always say, in my head, I left the next day. What happened in reality is I said, I don't want that. I don't want this and I don't want to start being paid too much where I feel I can't leave. And so I applied to go to journalism school, to do a postgrad in journalism school and had to go through that whole process and was eventually accepted and got in. And it was six months later when I actually resigned because, but in my head, that moment of dawning realisation, when I was told that my future would be a partner at that firm, and it was an incredible firm to work at, and I'm very glad I worked there. It just wasn't right for me personally, was the moment I thought, actually, I don't want

• 35:28Martin Lewis?

  this and this isn't right for my image of myself.

• 35:31Speaker 03

  It's interesting because you can be in some careers, you kind of decide at eighteen what you want to do if you enter the professions or medicine or something. And it's harder to back out. Funny, I was talking to a guy who taught dentistry and he said there was one lad, he never forgets the conversation he had with him. He took him to one side, he said, look, and he was close to graduating, this guy, he said, look, you're good at this and you will graduate, but I can just tell you, you just don't like it, do you? You just don't like doing dentistry. And the guy went, yeah, you're right. I don't know how to tell my parents. I'm just gonna have to go through with it. And so this friend of mine who was teaching him effectively talked him out of staying in dentistry. And he said he always think it was one of the wiser contributions he made.

• 36:16Martin Lewis?

  Well, I think, look, and whatever you've done, even if you've gone to qualify for the high end professions like law or medicine, if it's not right for you, you've got quite a high end academic degrees that are going to be wanted elsewhere. I was talking to someone the other day who had been a doctor, but now, you know, worked in business for a pharmaceutical company and that's what he found his passion was. And there are routes to go out. We're not saying it works for everyone. We're not saying the job market is that flexible or that easy. But my mainstay is test the waters and be flexible. If you're not happy early, don't think you have to stick with it. See what else is out there. Yeah, but don't sort of leave and then wonder what you're gonna do. You know, have something to go to.

• 36:55Speaker 03

  Absolutely. But, you know, yes, okay. Harlow, Harlow, brush your teeth regularly.

• 37:03Speaker 03

  I mean, that's that's a place for advice like that, so you don't have to pay out expensive dental repair bills. Staying with the dental theme.

• 37:09Martin Lewis?

  Brush your teeth, make sure you know how to brush your teeth. I was listening to the other day, you're meant to do it for two minutes and you're meant to do it at a certain angle and you're meant to be mindful when you do it.

• 37:17Speaker 03

  One, two at a time, front and back, yeah.

• 37:19Martin Lewis?

  Yeah, and you're also, and it's meant to be good for your mental health when you do that and and floss as well. My wife is brilliant at flossing, I'm not a good, are you a good flosser?

• 37:27Speaker 03

  Oh, absolutely, well, well known for it, peerless.

• 37:30Martin Lewis?

  Do you, do you floss, how regularly do you floss, Adrian? Are you a daily flosser?

• 37:34Speaker 03

  Oh, yes, every evening.

• 37:35Martin Lewis?

  Yeah, you see, I'm not, I'm not a good flosser and I know I should be, but you're quite right.

• 37:38Speaker 03

  Are there bits, are there bits of meat and stuff in your, between your teeth? I would have you down as an absolutely fanatical flosser.

• 37:47Martin Lewis?

  I am not, I'm not a fastidious flosser.

• 37:49Speaker 03

  Okay.

• 37:49Martin Lewis?

  I'm a fastidious brusher, but I'm not a fastidious flosser.

• 37:52Speaker 03

  You disappoint me, you disappoint me.

• 37:53Martin Lewis?

  I'm so sorry, I'm so sorry, but but actually it is true, the expensive, I mean, if some people do everything right, they still have expensive dental repair bills. I quite like that tip. What have you got next?

• 38:01Speaker 03

  Emma, learn about tax increase savings and avoid short term debt, especially debt you won't be able to see tangible assets you bought with it five, 10 years from now. Well. I mean, you're all over that one, aren't you, Marta?

• 38:13Martin Lewis?

  Well, yeah, look, learning about, I I am still gobsmacked, the the number, I mean, I've even had it, people who are about to go into the state pension age. And they ask the question about tax, income tax. And they still don't realise that income tax is a marginal issue. I mean, so I'm going to phrase this the way I most commonly get it, but it happens at all ages and all stages in life. And young people need to be taught this at school. And there is the Your Money Financial Education textbook that's available for free, that I was involved in and funded. That we got into schools and you can download that for free, that goes through tax and pay slips and how they all work. But it it staggers me that I will get people saying. They're about to make me a higher 40% rate taxpayer by giving me a salary increase. Should I turn it down because I don't want to pay 40% tax on all my income?

• 38:58Martin Lewis?

  And of course, you only pay 40% tax on the amount above the threshold. You're still earning more and the fact that we still have people in society. Who don't know that means we have a real poor, really poor educative process. So do make sure you understand about tax and you understand. About your pay slip and you understand what your pension is and look to save or even better in the long run, look to invest. Do avoid short term debt, you know, debt can, there are reasons and times that debt is going to be necessary in your life. If you're, if you're buying a house, you're going to have to have debt. If you want to go to university, you're going to have to have what they call a debt. Uh, in most cases, and sometimes you, you know, if you need, you've got a new job and you're going to need a car to get to work. And there's no other way to do it, otherwise than getting that car, you might have to have a debt for the car too.

• 39:43Martin Lewis?

  But those are investment asset type debts. It's willy nilly, you know, debt for a holiday, debt for Christmas. Those are the things I really don't like. So Emma, I'm with you.

• 39:53Speaker 03

  Silent Bob says, my advice to me on the day I left school, I should definitely go to that disco at the church in Sheepwash Lane. Because I want to meet a beautiful girl who will make me so happy for the rest of my life.

• 40:04Martin Lewis?

  Oh, you old romantic.

• 40:06Speaker 03

  Do you know what? I thought I'd look up where Sheepwash Lane was. And they're everywhere, Grantham, Barrington, South Chad, Burstock, Tipton, Wolverley. Uh, Godsville, Southwick, East Lavent, Denmead, Great Corby and West Wittering. There's a lot of Sheepwash Lanes.

• 40:23Martin Lewis?

  And somewhere Bob let, met his, now we presume. Wife or partner there. But I mean, you would think it's not surprising Sheepwash Lane because clearly that was in old agricultural land, something you had to do with the sheep. And that's where they did it.

• 40:39Speaker 03

  Do you want to do one of your, uh, other life lessons?

• 40:41Martin Lewis?

  Yeah, my next one, I'm a bit more practical on this one with my, my life lessons in for these graduates. If you're self-employed, a third of what you earn isn't yours. For employees, you're paid via the payroll and that means tax is normally taken off. So what goes into your bank account is your money to spend. Yet if you're self-employed or freelance, you're normally paid before tax. Misunderstanding that causes huge problems for many young and some not so young people. So for every hundred pound you earn. Put 30 quid-ish straight into a separate bank account, preferably a high-interest savings account. Then at the end of the year, when your tax bill comes, you've got the money sitting there to pay it and you might have a little left over and that's the time to go and treat yourself.

• 41:24Martin Lewis?

  But do not touch that account until your tax is paid. It is, do not think of it as your money. It's no longer your money. You've sort of paid it into that account and that's just preempting what you're going to pay in the tax bill. If there's any spare, it's great. But I just think that's one of those things, especially if we want an entrepreneurial society and we want people to go and work for themselves and set up their own businesses. The fact that we don't give them this very simple tip and really warn them, you know, you've been paid 100 quid, but it's not really 100 quid because you're going to be earning 30,000 pounds over the year. You're going to be paying a level of tax and national insurance. Have that money put aside to do it because it's absolute hell if you haven't and suddenly you're having to find that whack of cash.

• 42:05Speaker 03

  Shall we get the flipping mastermind out of the way?

• 42:07Martin Lewis?

  Oh, of course.

• 42:15Martin Lewis?

  Welcome to My Money Mastermind. Adrian, the score stands at 15 right and 30 wrong in this three-option multiple-choice quiz, which means you are...

• 42:33Martin Lewis?

  Yeah, I'm afraid you're back to no better than random chance. Not good. And for the year, you're 2-0 down. So let's see if we can improve that, Adrian. Are you ready? You up for it?

• 42:44Speaker 03

  Yes, I'm ready.

• 42:45Martin Lewis?

  You sound so enthused.

• 42:46Speaker 03

  No, I am not. Hang on, let me, I don't do enthusiasm really.

• 42:49Martin Lewis?

  I know.

• 42:50Speaker 03

  I've got, yeah, I'm right up for this.

• 42:52Martin Lewis?

  Yeah, my yin, your yang. Adrian, you've finally decided it's time to treat yourself. Not a holiday, not to a new boiler, not even to one of those mattresses that claim to change your life. No, you have set your sights on the ultimate Val Doonican collection. Every album, every single, every compilation, every obscure B-side that sounds like it was recorded in a cardigan shop on a windy Tuesday. Let's just hear a little of the maestro now.

• 43:28Speaker 03

  That's what my mama told me when I was about me high.

• 43:32Martin Lewis?

  Yes, indeed. Adrian, you want to become the Don of Valdunicon. But the Don don't come cheap. So, I was very pleased with that line. The Don, I'm so gonna say it again, I was so pleased. But the Don don't come cheap. So you'll need to borrow for it. Small public service announcement. Borrowing money for Valdunicon is not generally considered a fat-sound financial strategy.

• 43:54Speaker 03

  You triggered me a bit, you know, because my Croatian grandmother couldn't speak English. She'd come every Christmas for two or three months and she used to flipping love Valdunicon.

• 44:02Martin Lewis?

  Oh, I so got a good one. I'm so pleased.

• 44:04Speaker 03

  Yeah.

• 44:05Martin Lewis?

  But still.

• 44:06Speaker 03

  It takes me straight back. Anyway, go on.

• 44:07Martin Lewis?

  To go on with the question, the long setup was just for this.

• 44:10Speaker 03

  Okay.

• 44:11Martin Lewis?

  You need a loan. So what's cheaper? I can't believe I've done all that setup and this is a question. So what's cheaper for a loan of £5,000? Should you get a five-year loan at 7% or a three-year loan at 10%? Yes, indeed. The question is even only scarcely Valdunicon-adjacent. But I mean, it was slightly better. So that's your question. What's cheaper for a loan of five grand? Get a five-year loan at 7% or a three-year loan at 10%? Is it A, five years at 7% is cheaper? Is it B, three years at 10% is cheaper? Is it C, the same? They're both the same?

• 44:47Speaker 03

  Oh, God. I need, I needed to work this out, but.

• 44:51Martin Lewis?

  Do you even know how you would work it out if I allowed you time with a calculator or spreadsheet?

• 44:55Speaker 03

  I think you'd need a comp, would you? I think you'd need a, you'd need a, would you need to calculate the compound interest?

• 45:03Martin Lewis?

  Well, interest is certainly compounded. That's true.

• 45:06Speaker 03

  Okay, so, um, I would, so it's five years at 7%.

• 45:13Martin Lewis?

  Or a more expensive 10% loan, but you'd borrow that over three years?

• 45:19Speaker 03

  I can't sit here and work it out, which is good because you did give me time, I'll probably work it out and still get it wrong. So at least I've got the excuse here.

• 45:27Martin Lewis?

  Or are they the same?

• 45:29Speaker 03

  Or are they the same? Well, you, I know because you've suggested that, you've reminded me that it's not the answer. But I'm gonna say it anyway. I know what you're doing.

• 45:37Martin Lewis?

  I'm not, I'm just trying to remember that there are three options, it's a three option multiple choice.

• 45:42Speaker 03

  If that wasn't the right answer, you wouldn't have said it then. I'm sorry, I'm, I'm, I'm sorry for what that implies about your character. But I, I, it's cynical, absolutely cynical. And I'm going for the one you've just, you've just reminded me of. Just to show you up, right? I think they're both the same.

• 46:00Martin Lewis?

  So final answer, see, you say the cost of those two is the same.

• 46:05Speaker 03

  Yeah.

• 46:06Martin Lewis?

  Play the uh uh. Now, I just.

• 46:08Speaker 03

  I hope you're happy.

• 46:09Martin Lewis?

  I only threw that in because I wanted to do a comparison, but it's a three option multiple choice, so I needed a third answer.

• 46:14Speaker 03

  Right.

• 46:15Martin Lewis?

  Okay, so I'm gonna do the shortcut, then the long cut. So first of all, the, the, the answer is that the three year loan at 10% is cheaper in total than the five year loan at 7%. And the reason I wrote this question is many people think that cost, interest rate is what dictates the cost of borrowing. No. On a standard loan, it's interest rate and the length that you borrow, which is why when some people put, you know, their debt on their mortgage and go, hey, I'm moving my debt to my mortgage at 5%. Well, you were moving a 10% debt over five years onto a mortgage of 4% over 25 years, you're actually gonna pay more. And you therefore need to factor in that the cost of a loan is a function of the interest and the borrowing time.

• 46:58Speaker 03

  Yeah.

• 46:58Martin Lewis?

  So the actual answer here is on the, um, uh, on the three year loan, you pay 5,800 back in total. On the five year loan, you pay 5,940 back in total. So 130 quid more interest, although you have lower repayments. So the cash flow is easier because you're spreading over a period. So you, there's two ways I can teach you. You want the shortcut way and then the better way to have worked this out that you could have done.

• 47:23Speaker 03

  Uh, go on, good.

• 47:25Martin Lewis?

  So the shortcut way to give you a relative cost, and it's not perfect, is literally multiply the two figures together. So five years times seven is what?

• 47:36Speaker 03

  Thirty five.

• 47:37Martin Lewis?

  And three years times ten.

• 47:39Speaker 03

  That's thirty.

• 47:40Martin Lewis?

  So.

• 47:41Speaker 03

  This has got to be worth a point, this has that, that, I mean, that mental arithmetic.

• 47:44Martin Lewis?

  It was, it was, I mean, it was superb, but that is, that's a very rough rule of thumb for people working this out, of course, use a loans calculator. And how to do it. Now, your question about compound interest, if you ask me to work out three years at ten percent in my head. In fact, you can give me another one, let's, give me a loan amount, not relatively simple, and a number of years and a percent, and I'll try and give you a rough idea of what it is.

• 48:06Speaker 03

  Okay, let's stick with five hundred pounds.

• 48:08Martin Lewis?

  Five hundred.

• 48:09Speaker 03

  Five, what, what did we say, five hundred?

• 48:11Martin Lewis?

  Five thousand.

• 48:11Speaker 03

  Okay, let's say five thousand um at, for ten years at two percent.

• 48:19Martin Lewis?

  Okay, so here's what I would do. I would say my average balance over the time, because you pay a loan off in set rates. On a five thousand pound loan over ten years is two and a half thousand pounds. So I would then work out what is two percent interest on two and a half thousand pounds, so that's fifty pounds a year interest. On two and a half thousand pounds over ten years, my interest is five hundred pounds. I would then, because compounding happens, add a little bit for compounding, so I'd make it five hundred and fifty pounds of interest. So I'd say your total repayments in that case would be around five thousand five hundred and fifty pounds in interest, maybe five thousand.

• 49:01Martin Lewis?

  Six hundred pounds in interest, that would be my rough guess. Um, I, if you want to talk for a second, I'll go on to a loans calculator, which I hadn't prepared to do. And I'll see what it actually is. Go on, Adrian, Phil, you read one of the, um, tell us out.

• 49:13Speaker 03

  Yes, I'll read, yes, good idea. Um, Donald says, save ten percent of everything you earn in an I C, use index funds to do this, that way you get tax-free growth. And access, and you can access it anytime you want before retirement.

• 49:28Martin Lewis?

  Absolutely, I mean, and, and investing is something that we need to teach our young people. If you're putting a money away for a long time. Money that you don't need to touch, investing will generally outperform savings. I'm just pressing calculate.

• 49:42Martin Lewis?

  And I put the wrong interest rate in. I just got a shot but I've got it so wrong and it's because I put the wrong interest rate in. In total, over the 120 months of your loan, you'll repay £5,520. I said £5,550. So in the right ballpark. And that's how you do it.

• 49:57Speaker 03

  So your 10 times 2 thing still work 10 years?

• 50:01Martin Lewis?

  Yeah, it does. I mean, the key that people get wrong in personal loans is they think I'm borrowing £5,000 over 10 years. It's 2% interest on £5,000. But you're not because you're paying it off, which is why I take the average balance, which is basically take half the balance and assume that you had half that balance for the whole 10 years and put 2% interest on that. That's the real trick to working it out in your head.

• 50:22Speaker 03

  Okay, that's, look, fascinating. And when we've got plenty of, plenty of other suggestions.

• 50:28Martin Lewis?

  Go on, do one more because I've lost my place in it.

• 50:30Speaker 03

  Okay, Heather, treat others as you would like you treated yourself. Doesn't take much to be kind. Make this world a better place to live in.

• 50:38Martin Lewis?

  Well, we couldn't say anything nicer than that, especially in a social media age. We all need to be a little bit nicer, a little bit kinder. And remember, there's often real people behind it.

• 50:46Speaker 03

  Coming from the bloke who sets the mastermind questions for me.

• 50:48Martin Lewis?

  Yes, but that's done with love, Adrian. That's done with love and kindness.

• 50:55Martin Lewis?

  And that's all we had time for in the show with Adrian. We're now in the pod only bit. I'm here with podcast producer Matt. Hello, Matt.

• 51:02Speaker 05

  Hello, you okay?

• 51:03Martin Lewis?

  Yeah, Adrian's 3-0 down for the year. Even for me, I don't want that. I want him to get some right.

• 51:08Speaker 05

  Do you think you're throwing him off too much?

• 51:11Martin Lewis?

  I think he thinks I'm trying to say it. Well, all I was actually trying to do is to say that there were three options he could choose from, not two, and just wanted to remind him. But he seemed to think it was a clue, which it genuinely wasn't. I wasn't trying to be off putting.

• 51:22Speaker 05

  He just gets in his head too much, doesn't he?

• 51:23Martin Lewis?

  Yeah, I know. He should focus on answering the questions rather than trying to answer them by psyching out what I'm doing. But anyway, that's not what we're doing. So it's been a really interesting pod and so many of those tell us. So I'd just like us to do a few more because we've got so many good ones. I don't want to waste them. In the pod only bit, so hopefully you've got them in front of you.

• 51:40Speaker 05

  I can see them.

• 51:41Martin Lewis?

  Why don't you read them and I'll talk about them?

• 51:43Speaker 05

  Okay, cool. First one from Let Hold Us. If you get into debt and are struggling, talk to them. Don't ignore the letters and phone calls. They're there to help you. It's in their interest to come to an agreement. Don't risk losing everything just because you didn't talk to them.

• 51:56Martin Lewis?

  That's very important information and not just about debt. I'm always surprised by people who send me questions saying, if I do this, can I do this with this firm? And it's one of those, it's subjective, it's whether the firm allows you to or not. And I say, well, what did they say when you asked them? And they go, I haven't asked them. I'm thinking, ask them. We mustn't be scared to ask people questions and talk to them. And often, especially in regulated sectors, if you're having problems, firms have duties and obligations to behave to you in a way that treats you fairly. So it's important to let them know that you are having problems.

• 52:30Speaker 05

  And then Andrew, Andrew Ashworth, the importance of compound interest, he says.

• 52:36Martin Lewis?

  Absolutely. Everybody should understand compound interest and it applies both ways round. It's bad in debt, it's good in savings because debt and savings are two sides of the same coin. So compound interest is where you get interest on interest. Let's just do it very briefly for anyone who doesn't know. Imagine you've got a thousand pounds in a savings account. If you earn 10% interest on that thousand pounds, then at the end of the first year, you'll have 1,100 pounds. At the end of the second year, you get 10% interest on the thousand pounds, but you also get 10% interest on the interest you were paid the previous year. So 10% interest on the hundred pounds. So you get 110 pounds interest. So now you have 1,210 pounds.

• 53:20Martin Lewis?

  And the following year, you get interest on the thousand pounds, interest on the first hundred pounds and interest on the 110 pounds. And that's compound interest. And it means that over time, the interest on the interest accelerates the amount that you're gaining. And that doesn't just work in savings, it works in investment too. So for example, imagine that you are invested in a fund that pays dividends. So that's the payment you get each year from shares or funds coming back towards the stockholders. Well, you could use those funds to buy more shares in that company. And if that company is doing well, because you've now got more shares and it compounds, so you get more dividends year after year after year, that grows too. Equally in debt, it works the other way around.

• 54:03Martin Lewis?

  It's because debt is effectively, the lender is saving with you, if you like, and therefore you have to pay it compound interest back. So, compound interest means the longer you're in debt for, it's almost like the mastermind question we were talking about, the longer you're in debt for, the more it costs you because you're paying interest on the interest, year after year after year.

• 54:20Speaker 05

  So, in some ways, it's good, in other ways, not so good.

• 54:23Martin Lewis?

  Well, you need to understand it, like everything else. Interest is great when you're saving and it's bad when you're borrowing.

• 54:28Speaker 05

  Fair enough. Ramsey Sharon, your job is not your personality or identity, you'll be replaced in a heartbeat. Enjoy what you do, but don't make it your reason for living. Put the effort into people and experiences instead, and pay into a pension too.

• 54:41Martin Lewis?

  Oh yeah, definitely pay into a pension. It's slightly difficult for me because I guess, I mean, in a way, my job is my identity for many people, but I think that's probably right outside of the weird world of broadcasting and being on telly and stuff.

• 54:57Speaker 05

  And Jane, this one got a lot of likes, 572, well, last time I checked. If you are a woman, make sure you keep your own bank account. When you find a partner, have a joint account for shared expenses, but keep your own account. To be fair, it's a good idea for men too. And make sure you take time to understand pensions and start paying in early. Being retired with a comfortable income is a huge plus.

• 55:18Martin Lewis?

  Incredible how many people have mentioned pensions, isn't it? I think this is really interesting because 50 years ago, I don't think you would have got this. If we go back to the 19, well, maybe more than 50 years ago, 70 years ago, if we go back to the 1950s and 60s, when we were in this sort of old style society where men were the primary breadwinners and women stayed at home to look after the house, then joint accounts were much more common because it was seen as a team unit, you're doing it together and therefore you would have a joint account, you both spend from it. These days, we tend to couple up later. And we, people are more financially independent once they get into a relationship and they're used to having their own money. And differences in personality, money personality, one being a spender,

• 56:03Martin Lewis?

  one being a saver, for example, can actually cause real frictions in relationships. So having a form of separate bank accounts is a good protection from that. You can still have a joint account for your bills, as long as you both got a decent credit score, because otherwise that can affect your credit scores with each other. And there are some, you know, Santander Edge is particularly good for that, as it gives you cash back on bills paid by direct debit, and it's currently paying switches at the moment. But yeah, generally, I, I think for the modern generation, I'm with Jane, keep your own bank account, as well as possibly having a joint one, if you trust each other.

• 56:35Speaker 05

  Moots, learn about finance, mortgages, taxes, banking and savings, and how they all work in detail. Learn a foreign language fluently, I wish I'd have done that. I'm trying, though. Take calculated-

• 56:47Martin Lewis?

  What language?

• 56:48Speaker 05

  I'm trying Spanish, well, I know a bit of Spanish, so I'm, I'm doing that. He goes on to say, take calculated risks and stay single until you're in your twenties. And Andy says, take more risks, life's too short to worry about the negative sides of calculated risks. Believe more in yourself and your own abilities.

• 57:06Martin Lewis?

  Yeah, I think we are a very risk averse as a nation, and it tends to make us, sometimes can mean we make bad decisions. And we often, I've talked about this before in the pod, we often confuse a bad outcome with a bad decision. You can do everything right, you know, you can make a decision that you're going to, whether it's fix your mortgage, fix your gas and electricity, marry someone, change job, and you do it based for all the right reasons, after a decent analysis, but it doesn't turn out right for you, based on unknowns that you could not have known when you made the decision, and we go, I made a bad decision. Well, no, you had a bad outcome. The way I often do it, Matt, I'll just do this quickly, I won't go into too much detail, is I say, imagine I've got a coin now, and I'm going to offer you this bet, I wouldn't offer you this bet.

• 57:52Martin Lewis?

  If I toss the coin, and you call it right, I'll give you a hundred quid. If I toss the coin and you call it wrong, you have to give me one pound. Would you take that bet?

• 58:04Speaker 05

  Yeah.

• 58:05Martin Lewis?

  Well, of course you would.

• 58:06Speaker 05

  Absolutely.

• 58:06Martin Lewis?

  So let's pretend we do it now, what you're going to call, heads or tails?

• 58:09Speaker 05

  Heads.

• 58:10Martin Lewis?

  Oh dear, it's tails. Was it a bad bet?

• 58:13Speaker 05

  No.

• 58:13Martin Lewis?

  It was a good bet. You know, you had 100 times gain on the way up than the way down. You could afford to make it and it was on a 50/50 probability. You had a bad outcome. And in that binary mode, it's very easy to see the difference between having a bad outcome and having made a bad decision. We're not as good at that with things where the decision has more finesse in it and it's not quite as obvious and it's not quite as binary. But there are times in our lives we have to accept, I did my best, I had a bad outcome, that doesn't mean I made a bad decision. Because if we start putting it down to bad decision making when we made the decision as well as we possibly can, we become too risk averse for later in our life. Anyway, next one.

• 58:54Speaker 05

  Jason, don't worry about a career. Travel the world in your youth, then go to university and study a subject you're passionate about. At 56 years old, I've only just learnt that lesson, but I'll be starting my post grad degree, sorry, in September.

• 59:08Martin Lewis?

  Oh, well, it's such a lovely one. I don't want to say, you know, you need to think about what you're going to do in your career. I love the idea, you're passionate going back to university at 56, Jason. I wish you all the best with it. And I think that's rather a nice way to end this pod.

• 59:23Martin Lewis?

  Now, just before we go, on Monday on Radio 4 You and Yours, I did an interview about the promised Ofgem low or no standing charge tariffs that we were told would be coming in January. But so far,

• 59:38Martin Lewis?

  tumbleweed, we've not heard anything. Have a quick listen.

• 59:41Speaker 06

  From this month, there were meant to be options with the standing charges on energy bills for people in England, Scotland and Wales. Standing charges are the charges companies make to bring the energy supply to your home. They vary a lot, and there was nothing you could do to bring them down. People who are low users of energy really resent that. Well, last year, the regulator Ofgem promised change. Suppliers would have to offer at least one tariff with a lower standing charge. Now, everyone would still have to pay for the energy to be brought to their home, but there'd be new tariffs with lower standing charges and higher unit prices for energy. So it'd be a judgement for individual consumers. Here's Tim Jarvis of Ofgem telling us about that in September.

• 1:00:22Speaker 07

  I would say to people, if you are interested in getting more control over your bill, and you are perhaps a low energy user who want to see a greater link between perhaps safely reducing your energy and the amount that you pay, then have a look at these tariffs, talk to your supplier and get some advice to see whether this is the right thing for you.

• 1:00:39Speaker 06

  Well, there's been no sign of these tariffs yet. Martin Lewis, the money-saving expert, has been campaigning about the unfairness of standing charges for years. And Martin, hi and welcome. These new tariffs, then, tell us a bit more about what they are meant to be going to offer us.

• 1:00:55Martin Lewis?

  Well, your September interview was already at the point when Ofgem had gone flaccid on what it was originally proposing to do. So I was one of the people behind pushing for this. Standing charges are a moral hazard. They disincentivise lower users from cutting their bills. They punish older people who only have their gas heating on during the winter because they've got to pay for it all year round. And they're absolutely too high. Now, this was about shifting some of the cost of the standing charge, the fixed charge, onto unit rates. There is nothing that defines, you know, when you go into a pub and you buy a pint, the pub has fixed costs, you know, it has the premises, it has all of the different things that are going on, but they don't say you have to pay a fee to be able to access the pub and then you pay for the pint separately.

• 1:01:40Martin Lewis?

  All those costs are factored into the pint. But on energy, for some reason, we say any fixed cost has to be put on the standing charge. And that philosophically doesn't work. Now, what I'd been calling is a split price cap rate, and that was the original proposal. So there would be two price caps. There would be the price cap, the normal price cap, and then there would be a low or no standing charge price cap that each firm would have to offer. So that, and the vulnerable people would automatically be defaulted on to the right one for them, which means basically if you're a lower user, you'd be on the lower no standing charge price cap. If you're not, you'd be on a higher price cap. So when you were talking to Tim Jarvis then, they'd already softened that in a way I was very uncomfortable with.

• 1:02:20Speaker 06

  Yes, because it puts it all down to you, doesn't it, Martin, that you must decide?

• 1:02:23Martin Lewis?

  Yeah, and many of the people who are the worst victims of this pricing policy are the people who never switch. And the whole point of the price cap, even though it covers far too many people now, it's a pants cap, most people shouldn't be on it, is the price cap is meant to be the backstop tariff for those who are unable to engage in the competitive market. But what Ofgem did is take that original proposal for a dual price cap and say that firms must offer a switchable low Or no standing charge tariff. Now, that will help some, but it won't help many of the most vulnerable because they're the ones who never switch anyway. They're the ones on the price cap, which is why it should have been through a price cap tariff. So the, the energy firms hated the dual price cap system. So then you came and they said, well, let's do the low or no standing charge alternative.

• 1:03:07Martin Lewis?

  And then people like me were going, well, that defeats the whole point. And Ofgem, as it classically does, gone for a halfway house option that leaves nobody happy, which is probably why nothing is happening this month, even though it was all meant to be happening this January.

• 1:03:20Speaker 06

  So in the meantime, what do you advise someone who really wants to reduce what they're paying for their standing charges?

• 1:03:25Martin Lewis?

  Well, I, I actually think philosophically, that's a poor question. You'll forgive me, because what you should be doing is looking to reduce your energy bills. And there is always an interrelation between the standing charge and the unit rate. So what you have to do, regardless of your usage, is you go onto a whole of market comparison site. So that's one that doesn't hide tariffs that don't pay it. My Cheap Energy Club, of course, doesn't do that. And you go onto that site, you put in your usage and it will calculate what the cheapest deal is on your usage, factoring in the interrelation between standing charge and unit rate. I know there are many people out there who go, I want a lower standing charge and I get it, but you don't want to lower standing charge if it ultimately means you will be paying more. So I think what this would have done is brought in more options that enabled people

• 1:04:10Martin Lewis?

  to switch to tariffs that were better for them. But at the moment, you just have to pick from what's available on the marketplace and you can't just look at standing charge alone. You have to look at the rate for each unit of gas and electricity you use and a comparison site will do that for you. Or you can go and check the rates for yourself and get on a spreadsheet and calculate it for yourself.

• 1:04:26Speaker 06

  Ofgem told us it had heard people's concerns about standing charges loud and clear, but that it needed to, and I'm quoting now, carefully consider stakeholder feedback on these proposals and that any changes don't have unintended consequences. What do you think that means?

• 1:04:43Martin Lewis?

  Well, look, when they first launched the consultation on this, I was encouraged people to feed in and they had by far the biggest consultation by many factors of any consultation they've ever done. Standing charges are easily the biggest single complaint on any subject I get into my mailbag. I've spoken to the Secretary of State for Energy about it, spoken to Ofgem about it. People hate them, as I say, they're a moral hazard. I think what happened is they tried to put the original price cap proposal in place. Energy firms were up in arms and hated it. They tried to come up with some type of conciliatory switches tariff. Nobody really liked that. And so they're trying to find a way that pleases the consumers who think that these charges rightly are rancid and too high. You know, standing over £300 a year just for the facility of having gas and electricity is too much.

• 1:05:28Martin Lewis?

  It should be in the region of £100, £150. That would be, in my view, a balanced version. But also, they have to appease the energy companies because they've got a remit to balance at the same time. And I don't think they've pleased anybody with what they were proposing to do.

• 1:05:42Martin Lewis?

  That's it for this week. We tend to put out a new episode every Thursday and Monday, which is our Question Time podcast, where you can ask me absolutely anything and everything within reason. So if you've got a question, send it to [email protected]. And if you've enjoyed today's podcast, please tell your friends you've been listening to the Martin Lewis podcast. And why not subscribe? Then your pockets will be pleased with you. And if you haven't enjoyed it and you're listening this far, you've only got yourself to blame.

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• 1:08:17Speaker 08

  Welcome to The Haunted Library. Join me, Colin Morgan, as I read Frankenstein by Mary Shelley. A story of science and ambition, loneliness and longing, and what it truly means to be human.

• 1:08:36Speaker 08

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