Car Insurance Prices DROPPING… a perverse warning | Base rate cut help

24:02But multi-car policies are always worth checking if you have two or more cars in the household, but they won't always win. I like the way Debbie's worded this. Why does my car insurance increase if I remove my husband? I mean, remove them from the insurance. I take it, do you mean? Well, it's very important that that does and does happen and people understand. so what happens in car insurance that tends to be average of risk rather than a cumulative risk so adrian shall we get married again we do most times so adrian and i've just got married or maybe we're cohabiting this time maybe we're not quite so sure in our relationship but we cohabit and um we have our own cars now what happens in car insurance you're insured on your car yeah and you decide you want to add me as a second driver now you may think that what happens is well, there's a second person who could drive it that's upping the risk.

24:53But actually, because only one of us can ever be driving it at one time, it's actually averaging the risk between the two of us. So if I am deemed to be a lower risk driver than you, then I may bring our price down because our average risk is lower in combination. But how does the actuaries know how often you're driving it once a year or 364 days a year? It's statistical average. It's statistical average based on profession and all the differences between you. It's not, I mean, unless you've got a black box, which can be very good for young drivers, which is measuring the way you drive. It's based on the statistical difference between us.

25:26Now, actually, as we both, I mean, it depends what you put yourself down as your occupation. Occupation will have a big impact. By the way, tweet your job details. Just check. And there are tools out there available online where you can check your job description. Now, I'd never lie. You should only ever call yourself something that a reasonable person would say is true. True. But bar staff or bar steward or bar manager or PA or secretary, all of those nuanced differences can actually change the price. So it's worth finding out what the best job title for you is. Now, so going back to it, in this case, what's the name of the person?

25:58Sorry. That was Debbie Smith. Debbie, removing her husband. It sounds like her husband statistically is a lower risk driver. So when you remove your husband, you're effectively increasing your risk as he was bringing down the risk average. So how do we utilise this information? This is incredibly important, especially for young drivers. Yes, yeah. This is from Jenny, 22-year-old daughter, just passed a driving test and it's costing a fortune. Also, someone else trying to get, a 20-year-old boy recently passed a test, trying to get insured on his parents' car, being quite nearly£4 ,000. Now, again, we're in an elbow grease situation because different insurers look at different things differently.

26:38the first thing to try is adding an older responsible driver to the insurance someone who could legitimately drive the car as a second driver possibly even adding the second and third driver you know so dad and mum for example would be obvious ways to go forward in the case of a young driver put them as second and third driver on the car insurance and see the impact on price and do that at a number of different insurers because each one can look at it its work you know you can do it via a comparison site as well try different ones on a comparison site to go forward. That can have a massive impact on the driving.

27:11Dad may be better than mum, mum may be better than dad. The two of them together may, in combination, be able to bring the price down. Because of that risk averaging, a very important warning, I actually, someone who shouldn't have gave advice the wrong on this. Let me be very plain on this. If it's your daughter's car, and she's the prime driver, you should not put yourself as prime driver to bring the price down. that is known as fronting it is illegal it's potentially fraud and it can invalidate your insurance it is perfectly legitimate to put someone down as a second or third driver who may plausibly drive the car but it is not legitimate to put them down as a first driver when they are not the first driver so that's what i'm talking about adding a second or potentially third responsible driver in terms of the the young person bizarrely which is cheaper adrian It's not a mastermind question, but it could be.

28:06Which is cheaper, third-party insurance or comprehensive insurance? One would assume it's comprehensive insurance. Really? Cheaper, sorry. Cheaper. More expensive is comprehensive. I mean, you would assume naturally third-party covers a lot less. But I've told you you can't even get third-party now. You can still sometimes get third-party. Many people looking for cheap prices look for third-party. Again, a bit like doing it on the right date, in some cases the fact that you choose comprehensive lowers your risk profile by more than the fact it's a higher form of cover increases it so can bring your price down so let's just go through looking at your job description is important and what you're going through comprehensive can be third party all trial and error none of these are none of these are hard these are all soft adding a second or potentially third driver paying annually not monthly that's pretty fixed if you pay insurance annually what is happening they if you insurance monthly, they are getting you a loan to pay it monthly and charging you an APR afterwards.

29:07Those APRs can be 40%. You always, if you possibly can, want to pay annually. There are a couple who have 0 % interest, but most don't. If not, if you have a passable credit score, putting it on a 0 % credit card and making sure you pay it off within the year, within the 12 months, don't leave it longer or you're going to be paying double car insurance for next year as well, will be cheaper if you can do so. And potentially, if the APR is so high, it's 30%, even putting it on a normal high street credit card at 25 % APR would be cheaper than paying for it by the month. Paying car insurance monthly is a loan.

29:45It is not a monthly policy. It is a loan. And it affects your credit file. So be very careful on that. Again, for the young people, I'd be looking at black boxes which monitor the way that you drive or the time that you drive and go in the car and they can bring your prices down or you can even have their even pay as you go so you only pay as you drive going in there those are all the type of things i'd be looking at yes that isn't the end of car insurance you've got lots more questions and i will be doing some more of them and i might even give an answers to later on in the show so this week's tell us very simply scrolling to the top of my page, I can remember the exact text.

30:24What has your job taught you about money? What do you, did you do and what was the lesson that you brought into your own finances? Have you got one to read out to start? Yes, Rav Roberts on Twitter, working capital management. Specifically, collect payments as early as possible and pay bills as late as possible close to the due date. Amazing how many companies don't do this basic thing. It's not really cricket though, is it? Well, if it's legal, it's legal. I mean, it's basically, but we The place that I would always put that one into is anyone who's overdrawn. You should be moving your direct debit so they're paid the day before you paid.

30:57That way you'll be overdrawn for a lesser amount across the month. It will reduce your overdraft costs and help you get out of debt. Gail on Facebook, I'm a quantity surveyor. My job has taught me you can always negotiate a better price. Never pay for anything up front. Have a budget. Track it as you go. If you go over budget somewhere, you must reduce it somewhere else. The Densky on X, being a roofer, on price, you tend to look at what you earn yearly rather than week to week due to less hours of daylight and weather. So I do the same for everything. It also helps you to cut down when you realise that Greggs every morning is the price of a holiday over the year.

31:38OK, I get the Greggs every morning. I'm not quite sure. Let me give you a quick test. Are you ready, Adrian? Yeah. There are some golden numbers when it comes to saving money and reducing your spending. 12? Yeah. 52? Mm-hmm. 365? Yeah. 250? What are they all? It's 250 working days. That's it. That's 250 is working days. So if you buy a Greg every day at work and it costs you two quid, that's£500 a year. That's what those golden numbers are. 365 every day, 52 every week. I mean, you might have some weeks on holiday and 12 every month. But there's a very easy little bit of maths to do in your head.

32:15Let's do Amy. B, I'm a debt advisor for a charity. My job has taught me lots of obvious things about money, but the less obvious thing is talk, talk, talk. Be honest and open about money. Teach your kids about budgets and get them involved from a young age in managing the household budget. Amen, Amy. Talk to your partner. Tell your friends how much you earn. Stop being an ashamed and embarrassed about money. Ask for help. Oh, Amy, I so agree. And it's obvious you're a debt counsellor because you see the similar things that I do. One of my messages when I do my debt programmes on the telly is actually we need to be honest with our friends when we're struggling with our finances so they don't put peer pressure on.

32:53Oh, come on. Oh, it's only a dinner. You're actually saying, look, I'm struggling. I'm trying to pay off my debts at the moment. Can we do something else? Honest and upfront can take the pressure off. We've got a caller, Neil. So you worked at the official receiver's office. It seems like a lifetime away. But at the start of my career, I was at the official receiver's office. Now known as the insolvency service, interviewing people that have been made bankrupt and directors of companies that have been put into liquidation. And, yeah, some of the stories and the people that I met have informed my opinion on finance, my own personal situation.

33:24Essentially, what I mean is that my my risk reward level is very much on the risk side of things. So I'll never be a millionaire because I won't take those risks. Similarly, seeing people come through the door who'd got themselves into a whirlwind of debt through high APRs. but also those individuals that were able to stomach so much more risk and just play the system, they tend to win in the long run, unfortunately. So you're saying it's made you higher risk or lower risk? Oh no, much lower risk, much more prudent in terms of my own personal finances. So you've decided to be the tortoise, not the hare, slow and steady gets you there.

34:03Absolutely. Yeah, and I think that's prudent for most people. It doesn't mean it's wrong. I mean, gearing, which is all about high risk, if it pays, let me explain gearing very briefly in a sensible way. You'll understand this. So let's say you buy a house, but it's not for you. You're renting the house out and you buy a house. You put a£10 ,000 deposit and you've got a£90 ,000 mortgage. We'll call it a£100 ,000 house. Let's pretend that those are easily available these days. Gearing means if the house goes up 50 % in value, you've effectively made, if we ignore the interest cost just for simple sums, you've made 50 grand on 10 grand, woohoo, five times your money because you were borrowing the money to invest it effectively.

34:44But if the house price halves in value, well, you've lost 50 grand on your initial 10 grand investment. So gearing accelerates the rewards if it goes well and accelerates the losses if it goes wrong. Now, that doesn't mean good or bad, but exactly as we're discussing here, it means you need to be aware of your risk tolerance and in the uk we'd actually tend to have quite low risk tolerance compared to the states fascinating but another lesson you could have taken away is that some some people get away with it i know why the laws on on limited companies exist but you know there are companies that just go bankrupt leave a load of creditors that owed money and they just start up again somewhere else you know that's agreed it tends It tends to be us because often the petitioner was always HMRC.

35:32So it's the tax man that loses out in the long run. And some of that has been in the news recently with, you know, Lord Mayor or Mayor of London, applicants, things like that. You've got HMRC that sits there with a huge debt for corporation tax, PAYE, VAT, you name it. They were the ones that missed out and that's you and I. Okay. Neil, thanks very much for joining us. My pleasure. Thank you, Neil. I find these fascinating. Claire on Facebook. I've worked in retail, in stores and various head office roles. What's it taught me? Own brand products are usually just as good, sometimes better than the branded equivalent and a lot cheaper.

36:13Sometimes it's exactly the same product with a different label. I used to have a list of where people who worked in factories told me when they were making the same product the same way and just putting different packages on it. it got quite litigious. It got quite tricky to do. Because what they'd often do is they'd have slightly different sugar or salt content, so you couldn't say it was exactly the same thing. They would just, you know, if it's a food or something. Painkillers I remember doing with you. Well, painkillers is, painkillers you have a proof. So if you're buying, obviously it's the active ingredient on painkillers that matters.

36:44So, you know, ibuprofen is ibuprofen, whether it's in urofen or whether it's in generic ibuprofen. But more, on the side of all pharmaceuticals and some cosmetics there's a thing called a PL code. A PL code is a long number. I don't know. It's probably 10, 12 digits long. If a product, if two packets have the same PL code, and you'll often see this with allergy medication, well, you'll have an expensive branded one and a generic one. If they've got the same PL code, then unlike where I was just saying, you know, ibuprofen's ibuprofen, it's the same active ingredients, but the other stuff and how quickly affecting and whether it's sugar-coated can be different.

37:17Same PL code. It's exactly the same thing. I mean, it's exactly the same thing. And you can find two old PL codes on products where there's, you know, one is less than half the price of another. So watching PL codes. Now, I'll go on with Claire. Best before dates are just a guide. I like these people. And food is still safe to eat after this date. Use the sniff and smell test. Some products may have artificially short dates to get you to dispose and replace of. And she says, NB, as I was about to say myself, but I'll let Claire do it. Use by dates should be taken seriously. Use by are a health thing.

37:49Best before are just the store's view of optimum quality. Then she says, if you see a brand advertising, EG on TV, remember this will be paid for in the product price. More expensive isn't always a better product. Yes, retail snobbery. Don't buy things you don't need. If you buy something and then decide you don't need it, take us back as soon as you can, assuming you're within the refund policy, and compare price per 100 grams. Bigger packets aren't always better value. Well done, Claire. Love it. Love it. Olivia Finucane worked in retail, learned that people will buy literally anything if they think it's on sale or that they're getting a bargain.

38:22taught me to be more careful and only buy things that I need. This is a bit... I'm going to do this one. I debated whether I was going to do this one or not. This is Carrie Ann Cognito. I'm a social worker, and I've learned that money is social and cultural capital. Money gives access to things that poor people need to access for social mobility. Without money, social mobility is restricted and people stay poor. Telling people they can climb their way out of poverty is said by people who didn't understand their own privilege. For example, I grew up in a poor family, but I'm naturally academic, studious and quiet.

38:56That gave me the foundations I needed for social mobility. If someone is born poor and doesn't have a mitigating factor, and they don't have anyone recognise their natural talent or help them develop it, that will restrict their potential. So I've learned that the ability to acquire money requires either money or talent in the first place. I don't buy into the emotive rhetoric about giving children a leg up in life. If I can give my children a leg up, you can bet your last dime I'll be doing it. I give them opportunities, access to clubs to develop their skills and broaden their social circles.

39:27If I have a pot of money when they're adults, I'll give it to them. Because I know money isn't really about having money. It's social mobility, social and cultural capital, reaching your potential, even staving off poor health. I thought that was interesting. Very interesting. There's some very interesting stats. Probably going off subject, but I'll do it quickly. I need to say I'm going to semi-make them up because I can't remember the exact numbers. but their scale of magnitude correct, if not exactly right. And it came from Professor Nick Barr at the LSE. They did some look and they talked about developmental issues and they took the top 10 % affluent households and the bottom 10 % affluent households and they took the lowest non-mental capacity issue children from the top households, the bottom 10 % from the top households and the top 10 % from the bottom households.

40:16by the age of 10 the performance was equal by the age of 18 the affluent households least able children was massively outperforming the most able children from the least affluent households so there's a divergence massively it was all about affluence now what was interesting is when you look at university entrance diagrams and you look at equality if you take the kids from the poorest backgrounds who get good grades 98 % of them go to university compared to 98 % from the highest affluent households the issue is very very few kids from low affluent backgrounds get the grades in the first place so if you want to look at equality of opportunity you start it well you start it prenatal but you start it from the age of 0 to 2 is when it matters most and when you can change it around and that's not it for the tellers I've got more coming later

41:10Welcome to Money Mastermind. The current score is Adrian has got seven right and nine wrong, which isn't that bad in a three option multiple choice. It's not good, but it's just not that bad. So let's get straight on with the question. Now, recently, after getting some TV image consultancy from Radio 2's own, the lovely Rylan Clark, Adrian decided it was time to make a change. his number one priority was getting teeth so white they every time he smiles. Try it, Adrian. Give us a smile. Yeah. Now that's that. The reason for Adrian's fail is he went online and ordered and paid for the Tony Blair tooth whitening kit, which included the added...

42:00He selected in-store pickup, collected it, took the package home and then he panicked that the purchase would break the BBC producer's guidelines on political neutrality so decided he needed to return it. Your question, Adrian, what are your statutory return rights in this case? To reiterate, you ordered and paid for the item online but you opted for in-store pickup rather than delivery. You took it home before you opened it and decided it isn't your cup of tea, though it isn't faulty. What are your statutory rights? It's A, it's an online purchase, so you have 14 days to notify them and 14 days after that to return.

42:37B, it's a store purchase, as you picked it up there, and therefore you have no return rights unless it's faulty, same as any store-bought goods. Or C, you could have rejected it at pick-up because it was ordered online, as until that point acceptance wasn't deemed, but as you took it home and it's not faulty, you've got no rights. Well, option C is so buzz-antine. I think that must be the right answer. I know there's a legal difference between an online and an in-store thing. There is a legal difference between online and in-store. Which is this? I've learnt from you. So which is this? Well, the answer is I don't know, but I suspect that's the wrinkle that you went and picked it up.

43:20So at that point, you don't have the protection, if you like, of it being an online purchase. I would think it's C. So final answer is C. Mm-hmm. so let me just go through and just may i just say before i do that everybody at home say your answer now out loud so you're locked in well done so now correct online purchases 14 days to notify them and 14 days after the return as long as the net personalized or perishable which this wasn't store purchase you have no return rights see you could have rejected and picked it up. You ordered this online, but the crucial point is you paid for it online. Therefore, you have no obligation to check online purchase at pick-up, though it is advisable in case there's damage and you later dispute whether it's damaged when you picked it up or not, especially if it was a used item, but you have no obligation.

44:11This counts as an online purchase, therefore, I'm sorry, you got it wrong, play the uh-uh. Now, option C was fascinating, because... If I paid for it when I went in, If you had reserved it online but paid for it once you got into the store, option C would have been correct. Then you could have rejected it at pick-up. So that's what option C came from. But you didn't. You paid for it online, so you've already bought it. Your acceptance isn't deemed. It's deemed to be. The fact that you collect it yourself does not change the fact that you're under the online regulations. And store-bought purchases, unless it's faulty, you have no right of return anyway.

44:49From a public service information point of view, I'm almost proud to have got it wrong. Yeah, but from a mastermind point of view, that's good. It means seven right and ten wrong.

45:02Now let's get back to your car insurance questions. And I've got podcast producer Megan, who's standing in this week at late notice. Thank you very much for doing so. What questions have you got for me, Megan? Jackie Mole on Facebook says, My husband is 55, has been driving professionally for 35 years, never made a claim yet. Insurance is going up each year. Why? Well, making a claim, of course, is always a factor in whether your claim goes up. But ultimately, this is the underlying cost of insurance. Now, some of this is because of genuine inflationary rises that we've seen. I mean, obviously, we're doing it in some context that the insurance has gone down in the last year.

45:37But why did it, are we still 60 % higher than we were in 2021? You know, the 16 % drop is on the back of really high rises in the past. Much of that is due to general inflationary factors, but more specifically, the huge hike in the cost of used cars, which meant that insurance companies, the replacement value that they're having to pay to get similar type of cars and bringing all that up has gone up. I mean, and so much so, I'm not here to defend the insurance industry and I wouldn't do it. But we have certainly had some big insurers being in financial trouble and producing losses in their results.

46:11So while it's easy to argue it's always profiteering, this tends to have been about underlying factors pushing costs up rather than necessarily just continued growth in profits from insurance companies. It's just a bit frustrating, really, isn't it? But it's difficult to bring it round. What else do we have? So Christine Mapp on Twitter, slash X, says, Why do no-fault claims still seem to push up the price of your policy by so much? Well, I always revert to the same answer that I'm giving for everything else. This is all about actuarial risk. This is about looking at millions and millions of cases and saying, if you're in this situation, what is your risk?

46:51Now, it's as simple as the fact that if you've been in a position where you've had a no-fault claim, then statistically, insurers calculate that you're more likely to be in a position where you will have a claim in future. Therefore, you're a higher risk than someone who has never been involved in a no-fault claim. And you can actually see the logic in that, much as it makes you want to grind your teeth. But you're asking me for why. I'm not justifying it. I'm explaining it. That's why. That's why. And of course, it's worth remembering when people talk about no fault and no claims bonus. I'll just move on to that for a second.

47:27The same thing happens. People who have a no claims discount or a no claims bonus, you have a discount of your price. So if your underlying car insurance price for simple numbers is£1 ,000 and you have a 20 % discount, you pay£800. Now let's say that you have a claim, you have a no claims discount protection. You have a claim. The fact that you've had a claim puts up your actuarial risk. Let's say you're now paying£1 ,200. you keep your 20 % discount 20 % off£1 ,200 is£240 so you're now paying£960 the fact that you had a no claims discount doesn't mean they can't increase your cost, it means you get the same discount and people are often confused by that and very frustrated by no claims discounts within that context And there's another one here from Andrew James on X, he says cars are so much safer every year and the introduction of 20mph speed limits has with significantly reduced accidents.

48:26So why on earth is car insurance increasing significantly year after year? As no claims are accrued, the policy costs only ever rise. It just doesn't add up. Well, it isn't year after year. It has gone down this year, and I think I've already explained that. It's worth remembering it's not just about the good drivers doing good things. It's also about the bad drivers doing bad things and often uninsured, all of which factor into the entire market. And one final one here from Dennis Meadhurst on Twitter. Slash X. He says, my wife, who's 80, is the driver as I'm disabled. Are there any car insurance deals which allow for pensioners with low annual mileage just over around 2 ,000 miles a year?

49:04Well, the lower your mileage when you're doing a claim, generally the lower your cost, and I think everything else would look pretty safe in there. They can discriminate on age, and I have to say, I haven't looked at the age profiles of over 80s to know whether they put the price up. I wouldn't be surprised if they did. You could look at a pay-as-you-go insurance policy. 2 ,000 miles is on the cusp of whether that can be worthwhile. So you're literally, you just pay, and there are some out there where you just pay based on how much you drive and how far you drive. And that may work out cheaper in your case, but it's a question of doing the calculations.

49:39But what I would always do as my start point is go back to where I began. Go on to two or three different comparison sites, put your situation in and see what the cheapest you can find is. I mean, that's always the start point. I don't know whether you're comparing across the market or just renewing with your existing insurer. It doesn't say. Auto-renewal is a money-saving sin. I need to be clear, auto-renewal. I'm not saying there won't be circumstances where renewing is good for you, but it's automatically renewing without checking whether you can get a deal cheaper elsewhere. And I suppose I'm going to just fill this in and go a bit of a riff on this, because I've talked to, I've actually done it in a mastermind question before.

50:17One of the confusions is a few years ago we got these new rules that came into place in insurance which said effectively they were sold as existing customers mustn't pay more than new customers. The loyalty penalty is gone. Price walking has ended. Now what price walking is, is what it meant is before this rule came in, it meant each year you would go sign up to insurance company and each year it would walk the price up slightly. So just imagine I've got my fingers walking on my arm now and it's on an incline and it's going up slightly each year. £20,£30,£50,£60,£70. So that by you've been with the same insurer for five years, you're probably paying 50 % more than a new customer.

50:55Now, the laws came in to end that penalty. And many people now think, I can't be charged more as an existing customer than I can as a new customer. To use the mastermind nomenclature. That's wrong. because the rules are channel specific. So let's say you go through the Megan car insurance comparison site and that's where you originally got your car insurance or you went direct. Either way, the rules say that as an existing customer, you can't be charged more if you went from the Megan car insurance comparison site than the new customer going through the Megan car insurance comparison site for the same firm.

51:38Or if you've got it direct, you can't be charged more than somebody who went direct. What that doesn't mean is you can't be charged more than somebody on a different comparison site if you went for the Megan comparison site. And as I talked about earlier, there's a marketplace. Different insurers have different prices. So they can actually work it in a way that by having various prices across different places, they can put prices up for existing customers, which is why I still get messages from people today who told me, You know, I've just got my car insurance renewal. I've been onto a comparison site and found that my same insurer is 300 quid cheaper via the comparison site.

52:13I thought that was banned. Now, my question would be, did you go through that same comparison site when you originally signed up? The answer is invariably no. So it isn't banned. It is legit. It is legal. These things still happen. You still have to be on the ball. You still have to be checking across the market. Now, I'd like to get back to our tellers. I genuinely found it fascinating this week, and I learnt so much from your experiences. The tellers is, what has your job taught you about money? What work do you or did you do? And what lesson did it teach you about your own personal finances?

52:46We've already had some fascinating ones on this. I've got the Facebook ones. Megan's got the X ones that came in. Emma, I'm a former VAT inspector for Her Majesty's Customers and Excise. I met so many business owners that had little knowledge of some key financial areas, couldn't interpret annual accounts, little knowledge about pensions, paying tax and national insurance. Some even didn't know how compound interest works. Rapid growth always left these people in a mess. They outgrew their records, lost control of cash flow, and when their staff or accountant lawyer made glaring mistakes, they were the last to know.

53:22We know it's dull, but so is mowing the lawn or brushing your teeth. Learn the basics, watch the budget and stay solvent. Thanks, Emma. Boller on X says, He's working in social care. I now manage my finances the same way I do an in-trust account. Always get receipts, audit monthly, annual review of finances, three quotes for all work required at home, apply spending limits, anything above the limit is need versus want, and budget accordingly. Well, that's fascinating. So what he's saying is when somebody else manages our money, to make sure they're doing it properly and fairly, there are principles put in place of the way that you should operate, and he's putting those principles in place to protect himself from himself.

54:06I think that's fascinating. I actually think it's really good advice. I've not heard something like that before. Let me do Simon. I started out as a driving instructor nearly 20 years ago after about 15 years in paid employment. Being self-employed has taught me to plan. I don't know for certain how much money is coming in next week. There could be cancellations. There could be new students. I just have to know that bills are covered then the rest can go to savings. It's taught me to take my music more seriously and treat it as a business, as I have two income streams to cover for one another.

54:37Ah, so he does music as well as driving instructor. Well, look, always really important, anyone who's self-employed, and when you first start, remember, for every£100 you paid, on average, about£25 of it isn't your money. You didn't earn it, it goes to tax. If you're employed, it would have automatically gone to tax. So you have to impose that same fiscal discipline on yourself that an employee would. I would always, for every hundred quid paid, I would always siphon off£25 into your tax account. If you siphoned off too much at the end of the year, hurrah, bingo, bonza, you've got extra money.

55:10But far better that than not putting the money aside and not being able to pay it. You know all those stories of young celebrities and pop stars who go bust? It's almost always because they just didn't realise that their income stream might dry up and they'd never bothered to separate the money out for tax. Well, this one relates to that. Jo on Twitter says, I'm an accountant and I learned people who have money don't show it. Those who look rich often are in eye-watering debt. Don't be so eager to keep up. Oh, she adds, I have budgets for everything too. Quite right. Alison Spence, I work in adult social care.

55:43People tend to think power of attorney is only required for finance. The health and welfare one is equally, if not more important. Well, you'll know I'm a huge fan of power of attorney, but I do tend to focus on the financial one for obvious reasons. It's my job. I mentioned the health and welfare one. Maybe we need someone in that sector who comes out and vocalises the importance of power of attorney. You're just putting it in my head, Alison. I've got power of attorney. I'm going to be doing it for my TV show. And I'm just going to... Do you know what? Let's do it as I'm here. I'm going to send myself a note to get someone to do one minute on health and welfare.

56:15One minute health and welfare power of attorney because it's outside my area, but I should do it in show. So there you go. So maybe we've helped people get it because I might try and get that message across. What have you got next? Let's do a couple more. I love these. So Liz on X says, work in banking, use credit cards over debit for major purchases for S75 protections. Never give away your security credentials in full because the bank will never ask for these. Quite right. Too many scams out there. Shamus on Facebook, in construction for 40 years, I'd watch fellow workers spend pounds for food on lunch, but I'd make my own.

56:52Also, there'd be gambling in the breaks. lads would lose all their wages in one hand. Oh, gosh. Well, hopefully Seamus is out there and just been giving them a little bit of, you know, calm down, it's not all there. I'd like to go on, two more, I'm enjoying it. All right, Victoria says she learnt that your health is what's important. She's a nurse. So always have money put aside for emergencies. Practically speaking, two to three months salary is a good idea. That seems quite a lot to me. What, two to three months, three months salary for emergency? Yeah. I say three to six months. Wow. Three to six months of money put aside if you possibly can in liquid savings for an emergency always so that you can get yourself over the humps.

57:30And to finish, Stephanie on Facebook. My first job was in a bank. I saw staff tasked with chasing overdrawn customers and advising them what they could and couldn't spend their money on whilst owing the bank money and charging them for every bounce check or direct debit. I resolved to never go overdrawn. And I'll tell you what's interesting. I read some other messages from people who worked in banks and they were told they were not allowed to be overdrawn as bank staff. I thought it was fascinating that banks told their own staff, you can't be overdrawn. And yet still, and certainly if this was 10, 15 years ago, still let many, many customers go overdrawn and charge them bank charges for doing so and structured an entire system to trap people into the scheme of bank charges, but clearly knew it wasn't so good because they wouldn't let their staff do it.

58:17Anyway, I just want to say thank you to everybody who got in touch from all different walks of life on that one. I found it absolutely fascinating. Thank you so much.

58:27OK, you lucky, lucky podcast listeners. It's that time in the show where I give extra tips just for you. I should cocoa. How exciting. I've got a couple of them for you. First of all, do you own an electric vehicle, an EV? If so, there is a trick to save you some money on tax. Electric vehicle owners are exempt from paying car tax until April 2025. but after that point you're going to pay and for most it will be£195 a year. However, while EVs are currently still exempt, you can renew your electric vehicle for another year and you can do this even if your renewal isn't due. So let's say you renewed six months ago.

59:09Well, from now onwards up to April, just renew again for another year and that will give you another year taking you past April 2025 where you're not paying any tax on it because if you renew until the date they start charging that will last a year so don't feel you have to wait I mean the best thing to do would get it in your diary and probably do it early March just to be safe so that you know you've done it and then you're all sorted but I wanted to give you advance warning so have a go and renew your EV now and you'll delay having the start of electric vehicle taxes Now my second tip well it's more an information piece is for Sky TV customers It's just announced there's a 6.2 % price hike coming in April, and that will apply mid-contract.

59:53Understandably, many people have been saying, hold on, you said inflation-linked mid-contract price hikes and mid-contract price hikes were banned unless they told you up front in pounds and pence what they're going to be for new customers. So does that apply to Sky? The answer is no and yes, but even the yes is likely a no. And I want to try and explain it to you. So the rules about new contracts and mid-contract price hikes were explicitly for broadband, landline and mobile services. Online streaming services were specifically excluded. So that's Netflix, Amazon Prime and Disney Plus. But Skystream and Skyglass work through the internet so they're counted as content services, so they're excluded.

1:00:43The grey area is satellite paid for TV, which isn't explicitly mentioned either way. Ofcom thinks it should be included, and therefore the ban on inflation-linked mid-contract price hikes should work there, which means that Sky should be telling you the pound and pence figure when you sign up for a new contract of how much it will rise in April. However, there is a legal spat currently about SkyQ customers. Because Sky's satellite television services don't just provide content, they also involve the transmission of satellite signals. As a result, Sky argues they are not regulated by Ofcom as telecoms.

1:01:26Ofcom disagrees. There's a legal dispute which arose when Ofcom tried to enforce its requirement for providers to send end of contract notifications and Sky refused. In a judgment in November 2023, the Competition Appeal Tribunal sided with Ofcom. Since then, there have been other hearings which Sky also lost, most recently in December 2024. But Sky is still looking to appeal, so it remains an open question. So for now, at least, even if you're a Sky satellite TV customer, I'm afraid it doesn't currently look like the inflation-link mid-contract price hike ban applies to you. But watch this space.

1:02:07And that is it for this week. I hope you've enjoyed it. If you have, do tell your friends that you've been listening to the Martin Lewis podcast and tell them, why don't you have a listen too? If you've not enjoyed it... See you next week.

1:02:27Martin Lewis is the founder of MoneySavingExpert.com, but other consumer and price comparison websites are available. You can get in touch with Martin's podcast team by emailing martinlewispodcast at bbc.co.uk. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you're listening on demand, it's worth double checking as the details can date.

1:03:05BBC Sounds. Music, radio, podcasts.