Best of Question Time: How do I escape a joint account? Save hard, or spend more on my family? Top tips for beginner investors

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0:53Martin Lewis:So you get yourself a cash-icer and you take your cash-icer and you take your three points at the back of the cash-icer and you put the cash-icer back in. Do I stop putting so much emphasis on paying off the debt and spend a little bit more money spending time with my wife and my son making memories? This is not the first time I've heard of this scenario. It was like a revelation. Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is a special Best of Question Time episode where the curator of questions himself, Professor Sir Matthew Burnham Esquire, has chosen his favourite questions that you are Esquire's extremely savvy questioners have asked me on absolutely anything and everything, open brackets within reason, closed brackets.

1:36Martin Lewis:In this best of question time episode, you've asked me, how do I escape a joint account? Should I continue to save hard, overpay my mortgage and invest, or spend a bit more enjoying life with my young family? What are your top tips for beginner investors? We have a lovely success story involving a nine-year-old who's doing jobs for her parents for pocket money. I remember that, it really is very nice. Plus, do I find the Dead Ringer's impression of me funny? Play the theme tune.

2:18I've got an email from Greg here. He sent it to martinlewispodcast.bbc.co.uk. He says, hello, Martin, Matt. No Martin, no Matt. I think he had a bit of a panic of who to address it to.

2:31Martin Lewis:Fine, your question's being read out. You're good. Don't worry, Greg.

3:02He says, she doesn't have enough money to clear it. What can she do about this as the overdraft is obviously costing her per day? Can she get the bank to stop any future transactions from his card? She's panicking over this and initially the bank said there was nothing they could do as he has the right to use the account. However, it's quite clear he isn't going to contribute any money towards clearing the overdraft.

3:25Martin Lewis:This is not the first time I've heard of this scenario and it is a very difficult scenario and it's something that the economic abuse charity looks into. Now, I'm not saying in this case, you know, because let's be plain, in some cases, economic abuse is a form of domestic abuse. That's not what we're saying in this case at all. But this has really serious repercussions on people, especially if they can't talk to their ex-partner. Now, the actual rule is it depends on the bank account, I'm afraid to say. Some banks will allow one person to close a joint account, but then typically that's where it is a want to sign joint account, while others require you both to complete a form and submit it.

4:03Martin Lewis:So the simplest thing is if there is still an amicable relationship or at least a cordial relationship between your friend and her ex-partner, that they should have the conversation and they should agree some formula and agree to close the account together. I'm suspecting from the way that you've written this, that is not going to happen. now you can usually remove yourself from a joint account without permission from the other party but that's only if the account is in credit so that's not going to work here which makes me think probably the strongest thing that she could ask to do at this point I mean you're not going to like this and I find it uncomfortable that I haven't got a better solution is that she could ask for the account to be frozen now that wouldn't deal with the existing debt but it should stop more transactions.

4:51Martin Lewis:I think what she should do is she should call the bank again, tell them that she's feeling vulnerable in this situation because she's disempowered from her finances and doesn't know what to do, and would like to know if they have someone she can talk to about her options to try and extricate herself from this situation, which is not a good one, and what her rights are. If she feels she isn't being dealt with adequately and she's notified the bank, then I'd do it as a formal complaint. I don't like what I'm saying. I just need to be honest. I don't like that I'm having to come up with this type of solution because it's not a solution.

5:27Martin Lewis:She needs to make a formal complaint and then take them to the ombudsman that they have not followed the consumer duty, that debt is being run up in her name, that she's asked them not to allow it to be run up and it's continued to be run up after she has notified them. And I would put it as a consumer duty. I wish I had a stronger answer. I think, I'm sorry for doing it as a reflective lesson, because that really is no help to your friend whatsoever. But the reflective lesson is only have joint accounts with someone you absolutely trust and is there for the long term. And if it's not going to happen, then get yourself out of it before that you're splitting up.

6:02Martin Lewis:And just as an afterthought, you are hearing me right. Subtly, if she feels vulnerable or that the situation is being abused in this context, then being classed like that tends to give the bank more powers to act. Now, clearly, I'm not suggesting that anyone pretends they are being abused. Abuse is a very wide term. But clearly, her ex-partner is abusing financial trust by spending money and building up a debt. I presume she has asked him not to when they shouldn't be doing so. So the definitions are pretty difficult here. But I think it is a problem that we have with joint bank accounts. For me, it seems that you should have a unilateral right to close down a joint bank account or at least remove yourself from the joint bank account because in these type of eventualities.

6:46Martin Lewis:That doesn't mean that you abrogate responsibility for debts built up before you did so because that's the nature of a joint bank account but there should be a point where you could say I don't want to be linked with this person in a bank anymore and that should stop and that you should have a right but as far as I'm aware you don't have a right. Although the argument on this is that consumer duty that you now have that you could argue under the consumer of duty, potentially they should do it. But that's a tough one to find. On the back of that question, I'm going to speak to the Economic Abuse Charity to see if they've got anything that I don't have and I will cover it in a future week.

7:22Martin Lewis:Right, so I presume it's that time in the programme where we have a caller. The reason I presume that is because of timings, we're actually having to record this caller before we do anything else. So you, of course, are going to put it in the show at the point where a caller should come in. So I feel pretty certain that I can say we're at that time of the show where you're going to put in a corner, aren't you, Matt? No, let's do a read instead. Just kidding. Dan is in Maidstone and he is on the line. Hi, Dan. Hello, Dan. Hello, Dan. Hello. What can we do for you? Lovely to hear from you. Thank you.

7:51So I'm sure it's a question you get all the time. But my good interest rate on my mortgage is coming to an end after a five year fix. It's coming to an end in October. That interest rate is currently just below 1%. Well done, you. Thank you very much. And obviously, we're looking at interest rates of around 5 % when we renew. Over the last five years, because the interest rate on our mortgage has been so low, we've been putting extra money into a cash ISA, which has been earning anywhere between 4 % and 3.6%. So my question is, do I go ahead as intended and throw the lump sum that we've grown over the last five years at the mortgage at the point of renewal?

8:46Or do we look at stocks and shares, stocks and shares ISA, in the hope that we can outpace the 5 % of the new mortgage? Or do I stop putting so much emphasis on paying down the mortgage, paying off the debt, and spend a little bit more money spending time with my wife and my son, making memories?

9:09Martin Lewis:Well, first of all, what a lovely question and well done. You know, financial security and stability is really important. And we shouldn't, you know, many people think of money as just a money issue, but money isn't. Money is a core, crucial wellbeing issue. And the fact that you've managed to build up this pot of money to reduce your future mortgage, to give you more financial security for yourself and your family, all of that adds to your wellbeing. Now, it's not something that makes you happy, but it takes away some of the anxiety and stresses and the misery that comes with life. I always think of money.

9:41Martin Lewis:Money doesn't make you happy, but it takes away many of the negatives. And I think you've done that. And I think you and your family can be very proud of yourself. So let me try and I think I've got the question. It's basically pay off the mortgage or invest or have a bit more fun and spend a bit more. So let's do the first, the easy bits, the bits that's in square brackets in my head, which is paying off the mortgage as opposed to saving, just saving rather than investing. Well, first of all, you've been doing it right. And just for those people who are listening, because your mortgage rate was lower than the interest rate you could earn in savings.

10:18Martin Lewis:You were absolutely right to build up your savings rather than overpay the mortgage because you could earn, because you know,£1 ,000 at 4 % in savings will ignore tax, gains you£40 a year. £1 ,000 on a mortgage costing you 1 % only cost you£10 a year. So you were£30 per£1 ,000 better off saving than overpaying the mortgage. So you've done that right, but now the mortgage rate is going to be higher than you can earn in savings. You want to reduce the amount on your mortgage. I don't know, and I'm not going to ask you exact numbers because I don't particularly want you to give them out in the podcast.

10:50Martin Lewis:Do you know what a loan-to-value is on your mortgage? Yes, I do. Is your loan-to-value below 60 %? Are you borrowing less than 60 % of the house's value? Yes. So overpaying the mortgage isn't going to help you get a cheaper mortgage. Generally, that only works up to 60 % loan-to-value. So we can factor that one out in this decision. let's let's move to the next stage which is so overpaying the mortgage is definitely right compared to savings because you're going to be at a five percent rate and you can't get that in savings if that's what you're saying the rate that you can get i'm sure you've been to a mortgage broker you're sounding like you're someone who's on top of it and is very financially savvy so i'm and i'm framing my answers in the context of of thinking of you that way if you're not speak now but it sounds you you know what you're doing roughly don't you yes i do yeah good good and it helps me to know that.

11:39Martin Lewis:So the next question is one of risk. If we think of overpaying the mortgage as a certain 5 % return, the question is, what type of return would you want to look at in order for it to be worth you not getting the certainty and you taking some risk? Where's your head on that? Well, I'd be looking for a 7 % or 8 % return, which I am not convinced with my knowledge of stocks and shares that I would be able to do that consistently or comfortably. The balance against that, and just to play the other side is, it sounds to me like you're probably going to have this mortgage cleared in what, seven, eight, nine years?

12:21If I've done my maths correctly, it should be five years, yeah.

12:24Martin Lewis:OK, so you're going to have your mortgage cleared in five years. And with investing, the longer you invest for, if things go right and there's no certainty and you know all that, the better. So starting off some investing sooner may well be good. And in terms of what you do, the standard thing is a global tracker. Put some money in a global tracker that's got a broad spread of investments. We had the investment podcast a couple of weeks ago where you can hear about that in more detail. And go for nice, easy tracker funds at the start where you've got a really broad spread of investment. And over the long run, there is a decent chance that you will get 7 % on those.

12:58Martin Lewis:Of course, you may not. Of course, you may lose money. But I would say with the amounts that you've got and certainly listening to you, I would be looking at overpaying your mortgage. But I wouldn't be saying it is a binary thing that you should only overpay your mortgage. I think there is certainly room for you to maybe take 20 % of that. That's an arbitrary number, not a suggestion. 20 % of that and start to invest in stocks and shares. Obviously, in a broad spread of funds we're talking, not individual shares where the risk is high. Where would your instinct go? Because this is your decision, not mine.

13:32Well, my instinct is that I wanted to pay down the mortgage as much as I could, retaining enough for an emergency fund, as you always advise. Yeah. and at that point probably start drip feeding a percentage of what we are currently putting away into savings some into a overpaying the mortgage additionally and some into a stocks

13:55Martin Lewis:and shares isa yeah i mean i think why i would say why don't you dip your toe in i don't know what would be dipping your toe in amount that you wouldn't worry about too much be uh probably a hundred pounds a month something like that so here's a suggestion for you and again i have to be very careful i'm not telling you to do anything right why don't you start because you're worried about your lack of knowledge but you sound to me like somebody who is capable of gaining the knowledge over time so why don't you start by drip feeding a hundred pounds in a month into a stocks and shares isa yeah start doing that now and use that both as an investment in its own right but also as an educative process for yourself in future for once you're going to have more money to be able to do this with.

14:37Martin Lewis:How does that sound? It sounds good. My only fear is that I did start drip-seeding some money into a stocks and shares ISA. And, of course, the war kicked off and that money sharply went down. But you know, you've got to close your eyes to that. You're talking about money you're putting away that you're not going to touch for five, six years. The worst thing you can do if you've got simple investments in stocks and shares is look at it every day. I mean, it's terrible for you. You know, look at it once a year and remember, the only prices that count, we'll ignore dividends for a second, is the price you buy at and the price you sell at.

15:14Martin Lewis:Everything else in the middle is irrelevant. So, you know, volatility happens in the world. I think we should go on to the next one, which I think is probably the most interesting bit of all. And I love your question. Thank you so much, Dan, for coming on. Which is, should you live life a little bit more? How old are your kids? I've got a three-year-old son who's going to be starting school in September. OK, that's how lovely. Look, they grow up really quick. Mine's 13 now. I cannot believe it. You know, everybody says it to you. It's so true. That's not financial information. It's just true. They grow up so much more quickly than you can possibly imagine.

15:46Martin Lewis:And I don't think there's anything wrong with someone who's in a stable financial position saying, maybe I don't put every single penny away. I mean, it's interesting. We have money personalities out there. There are some people who are terrible and never look after the futures. And there are some people who actually restrict their lives by being too overly focused on the finance. And it is me saying that, you know, my underlying philosophy of what I do, the whole idea of saving money is not to stop people spending. It's so that you get maximum utility from the money that you've got so that you minimise the cost of the things where you're not seeing gain from, you know, paying your bills.

16:25Martin Lewis:You want them to be as cheap as possible because you don't get happiness from them being bigger. but that doesn't mean you shouldn't spend on something that you enjoy and that you can afford and it's going to make your life happy. So I think if you... I'm trying to... Reading between the lines, it sounds to me like you've been pretty tight and controlled over the finances while you've been doing this for the last five years. Is that fair? Yeah, that's a fair assumption. Well, you've done incredibly well and I think if you had maybe saved you know five ten percent less than you had you would have still done incredibly well and you may be if that will give you and it will give you genuine real enjoyment and time with your child then i don't think you should feel guilty if that's what you choose to do and i suspect that your question is because you sort of want to do that but you're worried you're doing a bad thing for the long term and it's what i call a permission question so if if i'm right and it is a permission question if i'm wrong and i hope it's not patronizing but if i'm right and it is a permission question then you definitely have my permission to do it a little bit because i don't think you've done so well is that why you were really asking if you're honest that's definitely part of it and it's it's uh my and my wife's uh priorities not aligning my priorities were to to save up as much as we could whilst we had the good interest rate in order to get rid of that anxiety she is much more in favor of making memories and uh and living life you you have done incredibly well and it sounds to me like you will continue to do incredibly well and if you can increase the happiness in your life by doing putting 10 less money aside but you're still putting lots of money aside and you're still overpaying the mortgage and you're still putting that money which i think you have the room to do by the sound of it then i i think you could probably get a bit more happiness by just loosening up a bit on it i think that's very good advice thank you very much and and i'm saying that which hopefully you i know what's gone on here.

18:23Martin Lewis:There's guilt, there's worry and guilt and stress, and I just want to get it right. And I just want to, I think you're pretty comfortable. I think you can do it by the sound of it. And just to say to the listeners, I have a written question from Dan in front of me that he sent in that includes some numbers that I'm not giving you, which is why I'm saying some things that you might think, how does he know? Okay. I think you've done well. Thank you. Thank you very much. And I wish you good luck. And I wish you and your wife and your son a lot of happiness as well as lots of wonderful financial security too.

18:54Martin Lewis:Bravo to you. Appreciate it. Thanks very much. So we've got a caller for the next question, as is the itinerary, as I understand it. We're joined by Natalie in Gosport, and you have a question about junior ISAs. Hello, Natalie. Hello. Hi. Thank you for having me on the show. I do have a question, please. And I'm wondering if you can help me out. So I have recently opened a junior stocks and shares ISA. I have a nine-year-old daughter and i'm currently investing 30 pounds a month so i've just done two months at the moment so i'm going very slow that's good uh and you're doing what's called you know that's called drip feeding do you know about that yes perfect i do know about it because i've followed you yeah okay good so i'll explain it to everyone else so when you're investing and you put money into the markets you can either if you've got a chunk of money one you want to put in you can either put it all in at once and then you're it's all crystallized on that day so whatever price you're buying the fund at on that particular day that's the price you buy it and it could go up and down from that point so that's slightly increasing your volatility or you can do what they call dollar cost averaging or here in the uk we'll call it pound cost averaging which is where you say well i'm going to put that same amount of money in but i'm going to do it over a year so therefore i sort of smooth out the vagaries if it goes up and i buy on a high bit and then it comes down well while i might have lose out on the money i put in last month i'm now buying at a cheaper price this month and it's smoothed it all out.

20:18Martin Lewis:So great way to start. Do you carry on with your question? Okay, thank you. So I realise with the amount I've got invested at the moment that the value can go up and down. But my question is, if the stocks and shares value goes down, will it impact only my investment percentage or will it impact the total that I've invested, the entire investment? I'm not quite sure I understand your question. Forgive me. Can you Can you explain what you're thinking a bit more? Yeah, absolutely. So I've put in£30 a month for two months. I've got£60 in there at the moment. And I have had a little check, and it's up at£63 total, which is fantastic.

21:01It's gone up. But as I know, investments can go up and down.

21:06Martin Lewis:Not only can, will. They will go up and down on a short term. All right. would I lose the£60 that I've put in or would I potentially lose the entire thing which could be a whole£63? OK. So once your money goes into a fund the value of its fund is its value. What you paid for it is irrelevant. So there's no division of the£60 and the£63 if you like. The fact you put£60 in is irrelevant. You now have an asset worth£63. pounds. Now, when you're investing, the value can go up and down. So if you had a single share, if you'd bought a share in one company, let's say, well, that company could go bust.

21:54Martin Lewis:And if it went bust, you would lose all your money. Simple. So the whole 63 pounds would go. Equally, if you bought in a single share, it could suddenly be the next stock market darling and go up 100 times in value so your 63 pounds would suddenly become worth 6 300 pounds but i'm hoping if you've been listening to me as a beginner investor for your child you don't have a share you have a fund oh i do sorry that's my terminology yeah can you tell me what your fund is yeah do you want me to name the uh the provider just just just the types good generally you know It's a Vanguard, something Vanguard.

22:35Martin Lewis:Is it a global tracker or a UK tracker? Yes. A global tracker. It's a global one. Perfect. I had a feeling it would because it sounds like you've listened to the pod. So I'm presuming that you're actually in the MSCI World Index, which was not recommended by me as regulatory reasons, means I can't do that by our independent financial advisor we had on the podcast, which was Ed Marshall. and that has about 1300 constituent firms from around 23 countries though it's heavily weighted in America so you've got that spread that diversity of different shares across the world so while nothing is impossible it is absolutely incredibly unlikely for you to lose all of your the money because you've got 2200 shares in there and what your fund is doing is it's basically giving you a balanced average of what's happened to all of those shares.

23:26Martin Lewis:Now, the advantage of that is, unlike you buy an individual share, the company can go bust. Well, even if one of those companies went bust, you wouldn't lose all your money. And in fact, because it's an index, if one company starts to shrink, as it's measuring the biggest companies, that would just drop out of the index and the new company would go into the index. And it's just computerised trying to manage it. The other side to that is, you're never going to get that sort of tenfold in five weeks stock market darling, everything's gone up type of return. You've done something to spread the risk.

23:56Martin Lewis:So technically, the answer is all of your£63 is at risk because that's just the markets. But because you've got a broad spread of fund, what you've done to mitigate that risk is you've diversified. You've got your lots and lots of tiny little eggs in that basket. And so if one of those broke, it's not such a big deal because you hope some of the others are going to grow anyway. so the technical answer is all the money in there at any point is at risk but risk can also mean growth too so i hope i've explained it are you understanding have i got i've got through the point yes absolutely i i wasn't quite sure but i think the way you uh laid it out and explained it now has settled in my mind and can i give you can i give you another tip your daughter's nine so this is money that you're locking away for at least nine years which is perfect time period so it's money you can afford to lose not that i hope you do and it's money that you're locking away for at least nine years i wouldn't be looking at the price that often there lies madness right because as i always say with investing there are only four things that matter the price you buy at any income it gives you and that type of global return you'll probably get some income each year and they'll be reinvested and it'll buy you more shares, the price you sell at and inflation.

25:18Martin Lewis:So if you look day by day, and this is what I said earlier, it will drop in price. There will be days it drops in price. There will be months it drops in price. But what you're looking at is over this near 10-year period, if we track this back over the last 10 years, well, if you'd put that money in 10 years ago, you would have three times what you put in now. And what we're hoping is you'll have something similar over the next 10 years. But during specific months of that, you may end up with less money than you did the previous month. And so you sort of, that can play on your mind a little bit.