Birthday plans and special guest appearance

BBC Sounds Music Radio Podcasts Regular Listeners prepare yourself for a shock. I don't feel you want to be paying a fee at any point in this via the magic of podcasting I'm going, to go and do those numbers now. I've got a question for you. Okay , how did you pushing already? Carry on, yeah. Way more important than any of that. She dropped . But we lost that . Hello and welcome to the cunningly named for Martin Lewis podcast. I did wonder what that's going to be about. And this is our Question Time episode where you are ESQ's extra savvy questioners get to ask for your questions on absolutely anything and everything open brackets within reason close brackets. This week you asked me, Martin, what's the best way to stoose? For those of you who don't know, that means how do I get money off a zero percent credit card so I can save it and earn interest on the money they let me for now . My child is seventeen. Should she use a children or an adult savings account? Will I lose child benefit if I only earn over the minute for some of the year ? I'm nervous giving my eighteen year old a credit card for his first trip abroad. What are the alternatives ? And finally , I got a surprise with a special guest last call . Play the theme tune . I got meals . I got fain Hello everybody and welcome to our question time edition of the podcast where you get to ask me questions on anything and everything within reason . But regular listeners , prepare yourself for a shock . Because for the next few weeks, there's no Professor Sir Matthew Burnham Esquire . Instead , we've got an upgrade or a downgrade. I'm staying absolutely neutral. You can decide this one yourselves. I don't want to get involved in the competition between the two of them. We have PPS here , no not parliamentary private secretary, but podcast producer Simon who normally does the producing on the big issues version of the podcast, but you're joining us for question time for the next few weeks. How are you feeling about it, Simon? How are you feeling about the big game? Well, I'm not absolutely delighted to be here. Matt's had so many names on this podcast. I mean, maybe let's change his dude of charms at this rate. Well, we've got so many holidays coming up. I haven't seen any of these badges yet. I must admit my plan was that the moment they came in, I was just gonna steal one anyway, but at least by doing this podcast, I am actually entitled to it. I'm going to say that you can officially have a badge one of our, ESQ badges extremely savvy questioners badges that anybody who calls up or does a voice note for the podcast gets if your question is read out you can still put within the the canon of podcast not legally ESQ after your name you become an Esquire but it's only the callers who get the badges. Yes, Simon because you're filling in for Matt, you absolutely do get to give yourself a badge once the badges are produced. So yeah, I just need to say as obviously consumer rights is everything I'm saying. Let's do the terms and conditions. Anybody calls up who will get a badge. We only came up and the vote only happened for the ESQs last week . The badges are not ready yet. So there will be a substantial delay from the time if you're on the show today and you're a caller between actually getting your badges. But hey , think about the anticipation, the wait. It's like the finest food. Your mouth will be salivating with the idea that an ESQ badge is coming to your house one day. You imagine probably could be even a gray day in the middle of winter in twenty twenty nine and you're sitting there going What's going to cheer me up? And then an envelope arrives, you open it and there comes a badge saying ESQ It's like an idyllic future dream. Shall we go in with some questions ? Yes, let's get into them. We've got one in from Ryan. He's asking about Stoosing . He says hi, Martin and Matt. Thank you for the brilliant work you do to get the community thinking more about money. I like to think of myself as a reasonably financially savvy and have been thinking about stoosing strategies and wanting to get your take on something a bit more nuanced . Is it generally more effective to use a zero percent money transfer card to access a lump sum upfront and place it into savings to earn interest from day one compared to the more traditional approach of using a zero percent purchase card and drip feeding savings by covering everyday spending . On paper, the lumps sum approach seems like it should generate more interest due to having a higher balance invested for longer, but once transfer fees are factored in, I'm not sure how often it actually comes out ahead. Is there a clear rule of thumb for when a money transfer strategy beats drip feeding or does it depend entirely on fees, interest rates and the length of the zero percent period? Okay, this is a fascinating question. Let's just go through the basic premise of stoosing which is for the financially savvy who are debt free. The premise of stoosing is if a credit card company is willing to lend you money at zero percent over a longish period, you can take the money they lend you , build an artificial debt with it, and then take that money and put it into high interest savings. It should always be easy access because you shouldn't be investing this because they can call the debt back at any time, should always be able to pay off the debt. And therefore you are making money on money they have lent you for nothing. That is the basic stoozing premise . The challenge in stoosing, and I'm fascinated that we seem to get a lot of stoosing questions on this podcast. I think this is becoming the Geeks podcast, which I love. But the challenge on stoosing is how do you get the money onto the credit card? You know, how do you effectively build that zero percent debt? And you're quite right that there are two ways. I'm just going to explain them more in general for people . One way is you get a zero percent for spending credit card that gives you interest free spending, let's say for twenty six months on anything that you pay for with the card. So what you would do then is you would just then use the card to do all your normal spending, building up a debt on it, making over the minimum repayments . And because you're not using the money in your bank account, money builds up in your bank account and you put that money into high interest savings . That's the first method . The second method as you're rightly talking about is to use a money transfer card. They're not that good at the moment. You get twelve months zero percent there and the fee is three or four percent depending whether it's the Tesco card or the Virgin card, which are the two that offer money transfers . A money transfer is a bit like a balance transfer, but with a money transfer, you get the new zero percent card and it pays money directly into your bank account for you so you now owe the zero percent card instead. So it's a much quicker way of transferring the money but you pay the fee . I would generally favor doing the purchases route because I don't feel you want to be paying a fee at any point in this. But we need to do some numbers and via the magic of podcasting , I'm going to go and do those numbers now. The numbers have been crunched and the results are in and let me tell you, it is a very, very easy win for the purchases credit card route. Let's look at the money transfer card . You can get zero percent for twelve months, but there's a four percent money transfer fee. So if you had a credit limit of five thousand pounds, in fact, it'd have to be slightly harder to do this, but if you shifted five thousand pounds of debt into your bank account and save that in the top easy access savings account at four point five percent and we'll assume you don't pay tax on your savings interest . It would earn you two hundred and twenty five pounds over the year, but the four percent fee is costing you two hundred pounds. So there's only a twenty five pound gain . Or we look at the purchases card . So let's imagine you've got a twenty six month zero percent purchases card. And you're spending four hundred pounds a month on it. You could arguably be spending a lot more. I went very conservative. You might be spending eight hundred thousand pounds and could do this much more quickly. And we'll assume again you've got effectively you're allowed to put up to five thousand pounds on the card. Well, four hundred pounds a month over twelve months means by the end of the year you'd have four thousand eight hundred pounds on it. The interest , well, of course, in the initial months you'd only have four hundred and eight hundred , then twelve hundred and sixteen hundred pounds on it. So the interest would not be as high . Over the first year in a four point five percent account, the interest would be one hundred and seventeen quid , but there's no cost. So all of that is profit. And then remember for the second year you've now got all of your five thousand pounds on the card, which means in the second year assuming interest rates stay where they are, you get two hundred twenty and five quids worth of interest without doing anything. Do remember you still need to make minimum repayments on it. That's always worth remembering. So just taking some really simple sums there, you're going to be far better using the purchases route where you use that card for spending each month. And if you had the money transfer card after a year at zero percent, yes, you could try and get a no fee balance transfer, but they're not that good at the moment either. So I think actually the way the products have changed recently , it used to be money transfer cards were much better than they were. They've got a lot worse, whereas purchases cards have stayed around the same . It's a very easy route now. Do it with a purchases card, do your normal regular spending , build up the debt that way, have no fee whatsoever at all, put the money in high interest savings and you'll make more money that way. And remember , for those who listened a few weeks ago we had a couple who've got a thirty thousand pounds stews pot . So by putting money onto the card and then balance transferring it to new cards, they have thirty thousand pounds of zero percent debt that they have in a savings account earning them four percent interest . So that's around twelve hundred pounds a year interest. And some people even do it and then they use the money in their offset mortgage to reduce what they're paying on the mortgage too. Stoosing can be incredibly lucrative, but it is very risky if you don't know what you're doing, so you need to be debt free, financially savvy, good at spreadsheets, and then it can be a winner . Otherwise, being a stoozer can be a loser. Okay, so Simon, it's the second question in the show and under Matt's format that normally means this will be a caller. I know what Matt's like. He's pretty straight. He would have told you a call a second, you do a caller every evening. So I'm guessing because we're all a bit scared of Matt that you've got a caller. Oh, I do not want to break the system. We have lined up Joe in Lannick show. Hello Joe. Hi Marston how are you? I'm very well. Thank you very much. What is your question? I wanted to ask about a bit the high income child benefit charge . So just last month I've moved up to the top of my pay schedule and because I'm a single parent it's just tipped me over the top of the threshold So can I just check? Yeah , and let me just explain to everybody listening . So the rules on child benefit is if there is a single earner so it could be either parent who earns over sixty thousand pounds then the, amount total amount of child benefit you get is reduced if they earn over eighty thousand pounds, the net effect is you don't get child benefit. And if you're between sixty and eighty, it's a linear sliding scale between the two. So when you say you've tiedpp over, have you tipped over the eighty or tipped over the sixty? I'm sixty. Okay, well in a way good and in a way bad . Carry on. So as I'm afraid to this, my car is quite old and my company has introduced a new electric car salary sacrifice scheme so I've been looking into that it does still look quite a good fit for me so technically if I sort of do that it'll drop me back under the threshold . So I'm kind of in the position where I'm probably going to be just above the threshold for maybe the first half of the year and then just below it again the second half . So I was wondering Denny to do anything in terms of paying back for part of the year that I'm above it or just things sort of average out over the year ? So big picture , things average out over the year . You only lose child benefit if you earn over sixty thousand pounds in the tax year of adjusted income. I mean, it's also worth noting it's the salary you're talking about before or after pension contributions . Am After ? After. So okay, so there's money already been taken off. Are you salary sacrificing for those as well? Okay, that makes sense . Right. So if your total adjusted earnings are below sixty thousand pounds in a year you don't have to pay , but but you may end up paying and then have to reclaim if you do it via the PAYE system . So I would suggest you don't set this up to pay via the PAYE system , you would do it on your self assessment form or you'd do it via self assessment , but you would only have to do it if your total adjusted net income goes above sixty thousand two hundred pounds . Okay and so what it seems to me is you're saying it won't . So basically you just you don't want to deal with this. I mean if at the end of the year it does you're going to have to deal with it and you can go on to the gov. UK child benefits tax calculator to have a look at this and exactly what the situation is, but it's sounding to me like you're going to be below the threshold . So you don't need to declare you don't need to do anything because you will still get full child benefit. That would be good. And I mean, don't get me wrong, I don't mind sort p ofaying back I'm if above the threshold and things then I'm happy to play by the rules, but I think my worry is just round about that whole self assessment view of things. It's not something that I've done before and yeah, I was just worried about what that would look like. So overall, while I think obviously doing self assessment would be a hassle for you, it sounds to me like you're not going to need to do it. So we're best to just hold off and go for the system where you would have to do self assessment if you were going to earn over sixty thousand two hundred pounds because it looks like you're not going to, which means on that premise, the best thing to do is to do nothing. And in fact, it gives almost an extra advantage of doing your new car via the salary sacrifice scheme, isn't it? Because it means you don't have to get rid of the child benefits. So it's effectively that's a really efficient way for you to do it. Yes, yes, thank you so much. My pleasure. Joe, you dropped and it gave me a chance to eat a biscuit and I'm hungry, so that was good. That's good. I think I'm just now gonna choose the biscuit so people can't hit me using the biscuit if you don't mind. Your biscuit, no problem . Thank you very much, Joe, that was brilliant. Not only does that mean hopefully you're going to keep your full child benefit and get a car paid through salary sacrifice, which if people don't know means the company says we're going to pay for your car for you, the payments for you each month by reducing your salary the same amount which can be quite tax efficient or national insurance efficient to do so. But way more important than any of that . Joe, you're going to get a badge. Are you excited ? A she dropped . We lost her . Oh my phone's dropped. Oh no , leave that in, Simon . Leave that in. I built it, I did all that. I built it up so well, it can't go to waste. I reckon I would I reckon she would have stayed on the line if it had been NPC she's an STU. I'm sorry Are you sitting there thinking oh I know what I wanted to ask him? Well this is your opportunity if you've got a question then just send them in to Martin Lewis podcast at bbcoto. uk please and do start them dear Martin . No, dear matt, dear Martin. Dear Matt. Or Simon, maybe Simon? Okay, well the answer to that one fell flat Let's hope we can do better. It's just me and you now, Simon. We can't mess this up. You at least cannot drop off the line. No, I'm going to stay till the end of the pod. I'm contractually obliged to don't worry about that. Mikaela has got in touch. Hi Martin. My sixteen year old daughter had a kid's savers account with the Halifax. This then changed to an everyday saver, but the interest is poor. She is seventeen in June. She has two part time jobss and want to put her wages into a savings account with better interest . As she is under eighteen, can she apply for a regular high interest account? She appears to only qualify for the kids savers. Hello Mikala, and thank you very much for your question and well done to your daughter on getting the savings habits so young. Now one of the most important things exactly as you're asking is to try and get the best interest rate that can be paid. I'm not sure which of the Halifax savings products she had before. The most lucrative is the Halifax Kids Regular Saver that's five and a half percent interest . But that's not one where you can put lumps sums in. That's why you put in a set amount each month. I think it's up to one hundred pounds you can put in each month to get that interest rate. It's fixed for a year. So she may have had that or she may have had the standard Halifats kids account that pays about two percent. If it's moving to the everyday account, that could pay even less. So generally, most adult accounts you have to be aged eighteen to get . So we're really looking at what are the children's savings accounts that still allow sixteen and seventeen year olds to put money in. Now, if it was a regular saver, so she's putting a regular amount of money each month and that's what she wants , well the top payer now is the Saffron Building Society three point nine five percent variable And in a way I don't really think that's worth it because you can get better interest rates in a lump sum account . The best payer is the nationwide Flex One saver for children. You must open nationwide flex one current account to get it. It pays five percent interest on up to five thousand pounds in there . She can open it either in a branch or varitz app or online and it works up until age seventeen , some other options. Kemp reliance at four point one eight percent on up to twenty five thousand pounds. So if a Saturday job is paying really, really well, you can get that on a larger amount. And then going down below that you've got HSBC my savings at three point seven five percent in the family building site at three point six percent. But it sounded to me like the nationwide is the best account . And it's, you know, the more that you can educate her about her money at this point, the more she gets into it, the more she understands that putting a money away in a top savings account means she has more money the better. You never know, she could even try and put ten pounds a month in an investment account too to see how that grows for her. Thank you so much for your question that you get to call yourself an ES . Right, Simon, so it's the even number questioner in this. So it has to be a caller. Is it a caller? You've got to form me next? No, we've got a voice note on this occasion. Okay, well I think you'll really enjoy. Very important. Precedent has been set that voice notes do qualify for a badge. So what's our voice note caller voice note caller? Are they a voice note caller? A voice note, yeah, I'd be rependent of our ESQ . What's our ESQ's name? Well, it's Kate and Charley, but I should flag before we play this. Now I book a lot of guests. I ask a lot of people for voice notes. This is something I've been doing for a while. People sometimes get bit nervous a bit overwhelmingly can you just send in a voice note to play to Martin Lewis? I'll often send them a bit of a kind of template of how to start it to get them into it . And so with Kay after I chatted on her the phone I, sent her an email saying, Oh if you could just start with something like this like hi Simon and Martin. Let's see how it goes. Hi Martin and Simon. Kate from Shaley here. My son's going on his first last holiday this summer. He's just turned eighteen. What's the best card for him to take with him or should he just take cash? Not keen on introducing him to the world of credit cards just yet as I think the temptation to overspend would be there as he has no financial discipline yet . We've also realized that where he's staying requires a three hundred pound credit card deposit and I'm not sure if there's any other way around this. Any advice you could give would be much appreciated. Thanks. Yeah, Simon, I know that Mat will bet very interested. It's a Martin and Simon in there. He won't like that. He'll be on his holiday. You know, be having his break and he'll listen to this podcast and he'll be there. I can see he'll have daggers in his eyes . So let's answer the question. The credit card bit at the end is the difficult bit. What card would I get an eighteen year old who you don't want to have a credit card? Well, the obvious one is the chase card. Now technically you have to open a bank account to get it, but you don't need to switch bank account and the chase bank account is available for anyone aged eighteen or older. It's openable varin app. So effectively you can open this up. You put money in it that you want to spend and it gives you the same near perfect rate that the bank gets when you spend because it doesn't add a non sterling exchange rate fee. So I think that's a really simple option and it's a debit card. It doesn't have an overdraft facility . It doesn't do a hard credit check. It just does an ID check and it doesn't affect his credit worth enough . An alternative would be something like a revolut prepayment card which equally it could get where you're loading the money up and I think either of those two would work . Now your final bit was leaving a credit card deposit. I mean, that is much tougher. If they want a credit card deposit and you have this when you're hiring cars abroad, although they're eighteen, you won't be able to get a car hire anyway . Then they tend to mean the credit card. So the question is either you're going to need to get him a credit card which could be quite tough. I mean it'd be something like the Barclay Card reward card but it will take a credit check to get a credit card and an eighteen year old may struggle to get to pass that credit check anyway or, could you pay the deposit for him? Would it be allowed that you could ring them up and make the credit card deposit for him and then that would be totally separate to the amount that he's going to spend? It's a very simple suggestion, but that seems to be the easiest suggestion I've got. But most of all, enjoy your lads holiday such an exciting time in your life. Well, yeah, eighteen years old yes, just be careful. And let's remember when we're talking finances and young people. Well, they're the biggest dangers for finances and young people . And Simon, I could almost hear the glee in your voice when you were saying it and I suspect this was you. Oh is drinking and I bet when you were eighteen, Simon, yeah, yeah, I suspect you might have had a jar or two if you went on holiday with your friends. Fair No, not fair at all, not one or two, many more than that. Exactly. And the problem when we drink is we lose all our sense of control. And so it's very difficult what you advise young people. Do you tell them to take cash out and only take cash out. So you've only got the amount that you can spend on that day, that keeps you to a budget, but then if it goes wrong, they haven't got any money left and they can't get back to where they need to go, which can be dangerous. Or do you have a card that has an unlimited spending facility on it . It's quite a difficult one at that age. The best thing is to be sensible and not drink too much. But let's be honest, no one's going to listen to a boring old fart fifty three year old like me saying, are they? Simon and listeners , I have to tell you something that's just happened here that I think is really someone over egging their role. So regular listeners will know that Rosie sits next to me and she is here to lie fact che meck because I'm giving answers off the top of my head and they're just making sure that the words coming out of my mouth are the right ones because sometimes you don't hear what you're going to say . I just mentioned that I'm fifty three on air and Rosie t,aking her fact checking a step too far , just said to me Hold on, are you going to be fifty three when the podcast comes out? Rosie, you are technically correct , but I don't think that was a sensible thing to say. So yes, we're recording the podcast on the Thursday. It is my birthday on Saturday and the podcast will be going out on Monday. But I think as I am speaking right now , I am still fifty three and I am sticking with it as long as I possibly can. If you hadn't given me those biscuits earlier, we could be having words. So does Rosie never speak on the podcast? No, this is one of the big things. R us is asey looming presence over the entire podcast, but she's above her voice being in the podcast . Regular listeners know she's here. They know she's overseeing the whole process. She's in the corner, she gives me looks, gives me she little notes in between what's going on , but Rosie is this mysterious figure. Nobody knows Is she real? Is she not? How tall is she? two foot six? nine foot two. Nobody knows. Well, I know because she's sitting next to me, but listeners don't know. Maybe one day we'll ask people to send in their view of what Rosie is actually like. Maybe we'll do it now. If you are a regular listener, what's your visual image of Rosie like? Please be nice. She's a lovely person . Right, Simon, so we're coming to the last question. Matt normally puts a funny in, Matt has to be obeyed, what do you have for me? Well, yes, as we referenced, we are doing this podcast the week of your birthday . So I thought it was a special treat. I'd bra with a normal cycle and we'd get a caller on to the funny question. Okay, so we're joined by Lara in London. Lara in London? Yeah. Okay. Yeah . Hello , you might recognise my voice. Hello. Yes, how interesting I've got a question for you. Okay. Looking already, carry on, yeah. Well, you might be wondering what's coming. My dilemma is quite simple. I'm wanting to know if it was somebody's birthday this weekend , what might be nice for me to do for them and do you think it's offensive to use a two for one voucher? Or would it actually indear you to someone? So when your wife calls you up unexpected in the middle of your podcast and asks what she would like her to do for you on your birthday . You have to be very careful of what you answer and what's appropriate to say in the middle of a podcast. So look, a two for one, I have no problem. It's our m oney. So if you want to use a two for one voucher if it's something good, I think that's absolutely lovely and I wouldn't be bothered at all . Well, we have a very busy weekend as you know, because we're going to the Baftas on Sunday, which is your birthday. I know. And after you've arranged that on my birthday, you've arranged to win a bafta on my birthday . The bar is set pretty high here. I don't know what I'm meant to do on Saturday. I genuinely don't know, so maybe there's a solution here or not. Well, so I'd first of all like to say to listeners that we have this problem each year that my birthday is the ninth of May and Lara if you haven't worked it out now who's my wife, her birthday is the tenth. Oh, you're gonna start with theft? I'm going to start with theft. Her birth is the tenth of May, which means every year she steals my birthday so I get I don't steal it. It's not your birthday anymore. No, but it is. Most people have a birthday weekend, but I don't because you take it off me and then for the rest of the year it's your birthday until it safers and then it gets there . this But year on your birthday , we're going to the Baftas so I get my little bit of revenge. You know, I am incredibly difficult to buy a present or a gift for. I just honestly, all I want to do, I'd be love to go out with the dinner with my two girls who I love and just have the two of you that. I don't need anything more than that. And if you've got a voucher. Okay, so I'd better just find the voucher, hadn't I? Wherever we going, I'd better find a voucher. Find a voucher. Simon, that was quite a brave move for you on your first pod. You got to take chances in life. That's what I always . And I thought it'd be good for Sapphire to be able to inherit a Martin Lewis badge. And so this way, Lara's now earned one. I was getting one because Sapphire. Why don't you get a keyfair? I was going to wear it everywhere. No, you get a badge and Sapphire will get her own badge because I've promised her because Safar is a regular listener and I just pronounced our daughter's name . But anyway, Sapphire is a regular listener and so we'll find this most intriguing to hear you in this. Thank you for coming on board. I will see you later. We'll have much time. Thanks for having me. Not that you invited me. Thanks Simon for inviting me. Oh, you smash that? Cheers guys bye. Bye . Oh, that was nice. Yeah, that worked perfectly. That worked just as I'd hoped. Good. Yeah, that did. And by the way, for regular listeners, just imagine we both talk a lot and fast. Just imagine what the conversations are like at home. I mean, seriously, you heard it there. It's like that a lot. And I think that seems a good place to end it. Simon, thank you so much for doing your first PPSing, sitting in as curator of the questions I look forward to next week . That's it for this week's Question Time. Don't forget to subscribe so you know when we release a new episode. We put out a new question time podcast each Monday alongside the big topic podcast with Adrian on Thursdays . Aren't you lucky? Two doses of money saving tips and tricks a week. Make sure you send in your questions. You can email Martin Lewis podcast at bbccotco. UK and for the next few weeks you can address them to dear Martin, Dear Martin and Matt Dear Martin and Simon. We'll see what you pick I got milked , I got . So I'm gonna work . I know that he so I'm gonna make sure that everybody eats. Martin Lewis is the founder of money saving expert. 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 Martin Lewis podcast at bbc dot co dot uk . 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