Christmas Special: The best of Question Time!

0:00Hello 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 winter flavoured best of question time pod where podcast producer Matt has picked his favourite questions that you've asked me since we started the podcast in September. In this episode, you ask me, can I refuse a smart meter? Is paying via PayPal a bigger risk? Should I keep cash under the mattress? Should you invest in gold? And will my new husband need to pay for my daughter's uni? I'm looking forward to listening. Play the theme tune.

0:48Okay, Martin. So first question we've got here is from June. And June says, In the past, I have always declined the offer of a smart meter, primarily because of the poor reputation. I've been contacted twice by Octopus, which is my energy provider for both gas and electric, stating that my electricity meter has passed its certification date and that by law they are required to replace it. This is in connection with the Electricity Act 1989. I do not under any circumstances want a smart meter fitted. Can I legally and lawfully refuse? It appears to me that the softly, softly approach of offering smart meters has now been replaced with a more pressurised tactic.

1:25I eagerly await your response. OK, so let's tackle this in two. First of all, smart meters. Are they worth having? I am generally relatively pro smart meters. If you have a smart meter, first of all, you don't need to do meter readings anymore. The amount of energy used is automatically passed through to the energy company. It means a whole range of special tariffs are available to you. And we're going to see more of these time of use tariffs coming later, where you may be offered much cheaper rates for using energy overnight. if you can shift your electricity usage overnight. It's good for charging an EV for the same reason that you're able to measure it in that way.

2:05And in future, I think one of the ways people are going to be able to save substantially is by having a smart meter and, you know, using most of the electricity and storage heaters and everything else that puts on their energy at night. So I'm not anti-smart meters on principle. I also think the in-home display that most people get with a smart meter that allows you to see exactly how much energy you're using, while it can be depressing, it's also a great way to manage your energy usage and lots of people tell me oh i looked at the meter i saw it was running at 19p i know that must have mean i left the lights on upstairs and they can actually they're so so intuitively linked to what their display is telling them that they can work out what's on where in the house and when it shouldn't be on which is also useful and helps you bring down your energy usage but i've also been campaigning about the problem with smart meters that over 20 of them on my stats don't work and that's why many people get annoyed about them and saying there are problems caused by them and we need to put more resources into fixing them rather than just installing them.

3:03But it is worth noting that energy firms are incentivised to install smart meters and find if they don't install enough. So you're right, many of them do push people to get smart meters. And I've seen many letters that are sort of seem to subtly say that you have to have a smart meter without giving you any choice, but you do not. There is nothing that will require you in most circumstances to have a smart meter. And then we get to your question, June, which is that your old meter is no longer in date. And that is absolutely something that can happen. To understand expiry dates, some meters may have a sticker on, which will say the month and year it was certified, which will give you an idea of how old it is.

3:48Although there's no guarantee the sticker is correct, as sometimes the Office for Product Safety and Standards, the OPSS, extends a certified life after carrying out a service and doesn't add an update sticker. Now, I'm not going to go into all the details of the MID certification scheme. It's complicated, though there is a great page on the Citizens Advice website if you want to go through and work out whether your electricity meter is no longer valid or not. In the event that your meter isn't valid and they are going to fit a new one, well yes they can enforce that you are going to have a smart meter but you have a right if you wanted to to ask for it to be put in dumb mode meaning it will do the same as an old school meter you won't be sending the meter readings in and you will still continue to provide manual meter readings so you could ask for it to be put in dumb mode though in a view if you're going to have a smart meter and hopefully it's going to work why would you want it in dumb mode but you may have a reason and that's your option.

4:46So no, they can't, unless your meter is out of date, they can't force you to have a smart meter. But if it is out of date, because they're not fitting old school meters anymore, you in many cases, you can be forced to have a smart meter. Did that all make sense, Michael? It did indeed. Thanks very much. So I'm not sure you're going to be that happy with my answer, June. But if you really want to go and check and be militant on this, go to the Citizens Advice website, have a look at the meter certification and when your meter dates information to see if your meter is actually out of date and they do have to fit a new meter.

5:18They probably do the way it's written. If they were just saying, hey, we'd love to upgrade you to a meter and here's how you do it without giving you an opt out, then it's probably just a push. All right, let's go straight from that into a caller. We've got Rob in Morton in Marsh on the line. Hi, Rob. Hi, Matt. Hi, Martin. Good to speak. Hi. So regular listeners to the pod. So My question is about the use of payment intermediaries. So I always use my credit card for daily spending. Paid off in full. It paid off in full, each one, without a shadow of a doubt. And the question I have is when you're using a payment intermediary, such as Apple Pay or PayPal or some other sort of payment intermediary, how does that affect my section 75 benefits which i have actually had to take advantage of once and it works but does having that payment intermediary in the way affect your section 75 rights short answer it can so just to uh you can help me explain section 75 here section 75 rules means if you spend something on a credit card and it costs over 100 pounds and less than 30 000 pounds the credit card company is jointly liable with the retailer so if something goes wrong you can choose to claim off the credit card company rather than the retailer, especially helpful if the retailer went bust.

6:42When did you use it and how did it work? I used it back during Covid when I had some flights booked with an airline and the flights were cancelled and I was being offered a voucher and I wanted my money back. So the airline didn't give me my money back. I went back to Amex and I got a full refund. Perfect. And that's one of the strengths. It's also worth noting one of the advantages of Section 75 is if you're going to take a retailer and you want to take action against a retailer, you have to go to court. I mean, you would go through Money Claim Online, which is sort of what's traditionally known as a small claim service.

7:14Whereas if you want to take action against a credit card company for you rejecting you on Section 75, then you can go to the Financial Ombudsman, which is free. And also currently, although they're looking to change it, looks at fairness rules as well. Worth remembering too, not for you, I know you know all this, I promise I'll answer your question in a moment. But section 75 works if you spend on a card. You don't have to put it all on a card. So if the item costs over£100, even if you only put a penny on the credit card, the credit card company is liable for the entire amount. So if you're buying a kitchen, for example, put your deposit on the credit card for a couple of hundred quid.

7:51Even if you don't want to put the rest on the credit card, you want to put the rest on, you know, a bank payment, whatever else it is, then you're covered by section 75. but you are quite right to ask about the payment processor issue. So let's do this in two. You said Apple Pay, you're fine. Apple Pay is a payment processor. It's as simple as that. PayPal is where the complexity is. So now the first thing to say where this gets really difficult is you don't actually have a way of knowing whether you're covered on PayPal. I would not know whether I were covered by PayPal under most circumstances that I'm going to come into.

8:28And this is one of the things that I've written to the regulator about saying, if we're going to have this vagary of whether you get Section 75 or not, it should be transparent. It isn't transparent. I'm going to try and give you generalised guidance of when it works and when it doesn't work. But you hear my caveat first. Yeah. If you are usually covered by Section 75, if you use PayPal credit to buy something, you are usually covered by Section 75. if PayPal is used as a payment processor by an online store and you're not logged into your PayPal account. That's because it is simply acting like as a payment processor.

9:06The reason that PayPal sometimes stops Section 75 is Section 75 only works if there is a direct causal link between the credit that you got and the purchase that you made. Therefore, any intermediary breaks that, which is why if you bought a flight via a travel agent, that breaks the link because it's an intermediary. Now, in some cases, using PayPal, PayPal is an intermediary. The first one that is far less clear cut is if PayPal is used as a payment processor for your credit card, but you were logged into your account. That's because it can make it be harder for card providers to tell whether PayPal acted as a middleman or simply a payment processor.

9:50So there is a risk if you're logged in, bizarrely, and paying by PayPal on a separate account. You are definitely not covered by Section 75 if you buy something online using your PayPal balance. Then you are not covered at all by Section 75. So that's about as much as I can do. Does it make sense? Did you get me? Yeah, it sort of makes sense. And I think the simple answer is if there's any doubt, don't bother using PayPal. just use your credit card straight with the retailer. Exactly. And if you're using your credit card straight with the retailer and you're not logged into your PayPal account, then PayPal is just acting as a payment processor like Apple Pay would or like a credit card, you know, a World Pay would.

10:32So you're fine. Great. Thank you very much. Cheers. Lovely to talk to you. Keep listening to the pod. Thanks so much for calling. Thank you very much, Martin. Cheers now. Now, I should be really clear here. We're talking about Section 75 protection with PayPal. Of course, PayPal has its own internal payment protection measures. Those are contractual, though, not statutory, not absolutely locked into the law in the way that Section 75 is. And I would always prefer to have statutory protection. But that doesn't mean if something were to go wrong with payments on PayPal, you don't have any protection at all.

11:09Thanks, Rob. I also want to say Rob's email started with, hi, Martin and Matt. So thanks very much, Rob.

11:19Question from Lou. Hi, Martin. I'm seriously thinking about putting... Yeah, hi, Martin. Note, hi, Martin. This one was tweeted, so it wasn't actually emailed. So my point still stands. Hi, Martin. I'm seriously thinking about putting any extra cash under my mattress because I feel it will be taken or taxed if I do anything else. Do you think I'm being too cynical? I never think anyone is being too cynical, but I think we have to temper our cynicism with practicality. So let's just look at exactly what the situation here is. I presume you're not talking about money that you've earned and you have to pay income tax on.

11:52This is money that you already have. Well, look, I mean, if you put money in savings, for example, your savings are not taxed. It is the interest you earn, the extra money that savings generates you that are taxed. So you're not going to lose money from tax on savings. You will just lose some of the interest. The same is true if you invest it. It's the capital gains tax, the amount that you pay on the profits, or you might also pay income tax on the dividends as well. But it's on what you make. It's not on the amount that you have. Now, you might be saying, are they going to change that? Well, I think that would be absolutely radical, virtually unthinkable and probably getting close to right in the streets territory.

12:30So I think probably not in terms of money that you've actually got. So now let's just do a practical comparison. Awesome. If you put money in a UK regulated savings institute, so pretty much all the bank accounts and anything I ever talk about, then you are protected up to£85 ,000 per person per financial institution. Just a quick note, the financial services compensation scheme limit was increased on the 1st of December. So you're now protected up to£120 ,000 per person per financial institution. Let's go back to the best of stuff. If you put money under your mattress and someone breaks in and steals the money, even the best home insurance policy normally only covers you for up to£1 ,000 worth of cash.

13:16And also you're having to pay for the insurance policy to cover you for up to£1 ,000 worth of cash. Whereas money in a bank or financial institution that is paying you interest, you are being paid effectively to put your money there and you get the protection on top. So if we're just talking really sensibly on a like-for-like comparison between keeping money under your mattress and putting it in a savings account, it is an absolute no-brainer. Put it in a savings account. Lisa. Yeah. My boss said today it might be better to buy gold coins than invest in the company pension scheme. What do you think?

13:54Well, I think, first of all, your boss is really naughty. So let's remember, assuming the company pension scheme is a classic auto-enrolment pension scheme, which you are legally entitled to as an employee, that means if you contribute, then your employer has to contribute as well. The minimum contribution is if you put 5 % of your earnings in, your employer has to put 3 % on top. And that is virtually unbeatable. Now, an employer should absolutely not, by law, should not be discouraging you from putting money in the company pension scheme. I don't know if this is a big company or a small company.

14:28If it's a small company and the person owned the company, for them to be saying something like that to you is absolutely outrageous because it smacks to me that they're trying to basically save themselves a cost. Because let's be really plain about this. If you put money in your company pension scheme, yes, while I accept you lose disposable income because you're getting less in your pay packet because you're contributing, in total terms, you're getting bigger remuneration. So not using the auto enrolment scheme is effectively you foregoing extra pay. And if your boss is encouraging you to forego extra pay, that doesn't seem right to me.

15:04Now, if we move off that bit, and I would always say as a standard thing to do, most people should be maxing out the money they put in their company pension scheme to make sure that their employer is giving them the highest matched contributions they should get. Because both you're getting the tax relief that you get from investing in a pension, but you're also getting that extra employer's contribution. As for investing in gold, now look, I can't talk about individual investments. Gold is seen as a relatively safe asset. It's an interesting one because if you buy a specific type of UK bullion, then any gains you make on it has a capital gains tax exemption.

15:40So it can be quite useful. But, you know, frankly, depending on which company pension scheme you've got, well, you wouldn't get that capital gains tax investment. If you want to invest in gold, you could invest in a gold exchange traded fund, a fund that basically buys gold and moves along with the gold price for you. And you could be doing that not just with your own money, but with the money that your employer is putting in too. So I can't give you the specifics of whether gold is good or bad. That's a regulated area. I'm not a regulated investment advisor and the truth is no one knows what's going to happen to gold over the next few years.

16:10It may well be a good investment. But I would always think encouraging you not to put money in your company pension scheme just feels naughty to me. OK, Matt, is it a caller? Of course. We've got Marika from Manchester, Dr Marika. She has a question for you. Hi, Marika. Hello. Hello, Marika. What are you a doctor of? Physics. Particle physics. OK. Oh, interesting. OK, so it's not going to be a problem if we get into some sort of techie stuff going on here then. Well, as long as no one has a heart attack, it'll be fine. It'll be fine. I will try not to mew on during this conversation. I shouldn't have done that.

16:45Carry on. Right. What can I do for you? So I was wondering if you could offer me some advice about my daughter going to university. She's 16, nearly 17. Yeah. So we're a year away. And I'm just panicking about it all the time. So I've brought them up as a single mum. I've got two kids. But I have remarried. And my husband has got two kids of his own. He's an academic. So he earns a really good salary. But he's not going to be contributing to my kids, if you see what I mean. I understand. So I'm really worried that the fact that he's got a really good salary and is my husband. I know exactly what this issue is, yes.

17:23Yeah, I just don't know what support I'll be eligible for for my kids. So, yeah, I was wondering about that because basically I work in, well, I'm a scientist, I work in the arts, I work on a science festival. So it's quite a low paid sector of work. And I struggle every month, basically, practically no disposable income just to get through the month. So that's what I'm panicking about. OK, so there is some validity to your panic, but not total validity to your panic. So let's just go through this. I'm sounding a bit prescient today because I mentioned earlier in the pod that I've spoken to Ofcom about an issue.

18:00I was actually in with the Chancellor last week and one of the points I raised to her was about student living loans. And one of the points I raised was the nightmare scenario that needs to be fixed. that when someone has a partner move in with them, that affects their child's living loan, even though the new partner is in no way going to be contributing towards that child's living loan. And I'll be honest, the Chancellor pulled her face like, oh, that's awful. And I was suggesting that we try and fix it, but it won't be quick when we bring in the lifelong learning entitlement that's likely to come in.

18:34I think it's 2027, 2028. You know, it's not going to be quick. It's not going to help you. I need to be blunt. And even then, I'm not sure it's going to be fixed. but this is absolutely on my radar. So let's just go through the basics. When your daughter goes to university, her tuition fees will be paid for her upfront by the student loan company and she will only repay that once she leaves and she's earning over at current rates£25 ,000 and she'll repay 9 % of everything she earns over£25 ,000, a bit like a graduate tax for 40 years unless she clears what she borrows. The interest rate is set at the rate of inflation So there's no what's called no real interest.

19:13There is interest, but it's set at the rate of inflation. And that's her business, not your business. OK. Yeah. OK. So fees all OK. Fees all OK. Did you know that? No, no. But it is the living expenses now that I'm. The living expense. And that's what I want to bring in. The living expenses is your issue. Right. Yeah. This is where it gets more difficult. So you don't have to worry about fees and you shouldn't be trying to fund the fees for it. you don't have the money to do it, being blunt, right? And you shouldn't be. And I hope her fees will cost her a fortune because that means she's earning a fortune afterwards.

19:44So she's having to pay back a lot, right? So that's all good. And that's... When you go to... I'm just... I should have checked. I presume you sound like you're in England and you're English residents. Yeah. Because the system does depend on which UK nation you're in. Just to say to everybody listening, I am talking about the English system under what's called Plan 5 loans. In every other UK nation for students starting in the future, it is a different system and the numbers are different but on the English system. When you go to university in England you are given a loan and this loan just adds to that other loan I talked about that you repay only in the April following when you leave university at nine percent above£25 ,000.

20:21It's the same student loan. It goes on top of the tuition fees. You are given a loan for living costs and that loan for living costs, this is the problem. It is means tested based on family income which tends to be a proxy for parental income but in your case that will include your husband so it will be your total income now there are some slight amendments made because there are other dependent children in the household but all that effectively does is reduce what's called your residual income for the assessment by about a thousand pound per child so instead of it adding up that you earn eighty thousand you know you've got four kids it'd add up that you earn seventy six thousand it's that type of scale of magnitude.

21:00It really isn't enough. And so, you know, there is a real problem here. Again, I mentioned to the Chancellor, one of my big issues with this is that the amount, the point where the loan starts to be reduced is at earnings of£25 ,000. And that has been the same since 2008. And at the same time, it should have gone up by 67%. It should be nearly£40 ,000 now. And it's absolutely outrageous. It's a family income assessment that's basically set up a single person minimum wage is where you start to lose it. It is totally unaffordable. But I can't change any of those things because those are the rules.

21:34Now, I'm not going to go... The way it works is basically, and it does depend whether your daughter lives at home or away from home or in London, but the way it works is from£25 ,000, you start to lose some maintenance loan up to around very roughly£65 ,000 where you get the minimum loan. I'm guessing from what you said, your total income with your husband is above£65 ,000? It will be, yeah, yeah. Right, so let's be blunt. You're going to get the minimum loan. If you are living at home with parents, the maximum loan is£8 ,900. The minimum loan is around£4 ,000. So that would be a shortfall of£4 ,900 if you got the minimum loan.

22:15If you're living away from parents outside London, the maximum loan is£10 ,500. thousand pounds the minimum loan is four thousand nine hundred pounds which means a maximum shortfall in the loan or maximum parental contribution if you like of five thousand six hundred pounds and the gap is even bigger if you're living away from home in london and that's per academic year do we know is your daughter planning to live at home or away from home i think her plan is to live away ideally i think i mean i'm going to say something horrible now that i hate saying because one of my whole principles behind the way that student funding should work is that you should be making a decision based on what the best course is for you, not based on the financials.

22:56But there is an argument here that living at home would be a lot cheaper. Just saying. But if we ignore that, so there's basically about four and a half, five grand a year shortfall. And that would just take up to the living loan that someone on the lowest income would get. And I would call that the parental contribution. So for being very blunt, that's around£5 ,000 a year roughly per year of university, which is around£15 ,000. And that would take her up to the subsistence living level that the full loan is. Now, of course, these days it is perfectly expected that when she's at university, she will get a job as well and she could be saving up for it.

23:37There are grants out there that you can apply for and you should get on the student grant websites and you should be looking that up you should be talking to whichever university she's going for welfare's fund to see if there are any other student funds and welfare funds out there but ultimately even to the subsistence loan there is a five thousand pound a year shortfall yep right and and i am clenching my buttocks that that i'm having to tell you that because i don't like it because the system should not be working like that but it does good thing is you're asking me now not when she's going to university so at least you've got a couple of years that if you can put anything away and i know that's difficult that may help yeah right yeah where are you compared to the start of the conversation better or worse you've got tuition fees as a relief hopefully but this is yeah so i was hoping that you were going to say something like oh you can appeal on the grounds that your husband isn't involved in you know paying for your kids but i guess there's not an appeal process on that and it is what it is so that's bad news i suppose yeah i mean there isn't an appeal process on that the only time that you could appeal is if there were to be a substantial drop in your income heaven forbid your husband lost his job which none of us want then you could then apply to have a current year assessment done if it's over a 15 drop in income but you there isn't an appeal this the system is broken it should not work like this it's done to stop parents jemmying the system so you know and and doing all types of tricks so that they get away from the contribution but it just, I hear this more and more, the way that our society works now, there are many blended families and the whole student finance system is anti-blended families.

25:16I mean, ultimately, you're stuck in this horrible position. You don't want to ask your husband for the money, but if we're being blunt, and I can be blunt, you can't, it's his income that means that your daughter is getting far less maintenance loan than she would otherwise get. And that puts you all in a terrible situation, and it isn't good for your family dynamic and I feel uncomfortable even saying it here but that is the truth of the system. Oh man, that's really harsh. But thanks for the info about the grant website. I'll look into that. And I think contacting the uni and looking at welfare funds is good advice as well.

25:51And something else that goes into this. So there's just a subtle move here. Right, we want your daughter to go to the university that's right for her and is best for her, right? hopefully that university is going to give her the right career and the right future. But there isn't always going to be one university. Now, if there isn't one where you live, I think in your situation, it really becomes important that you are studying the cost of living of wherever she is studying, that you are looking at what are typical student rents around that university town or village. You know, London is very expensive, but there are university areas where the cost of living is much lower.

26:31So I think that has to become a factor in the course choice. You know, she needs to look at six or seven courses that she really wants to do at the universities that she wants to do. And then you need to do some proper research on the cost of living, not the university itself, because all the tuition fees are all set at the maximum level. That's irrelevant. But how much is a typical hall of residence there? How much, you know, what is it going to cost out where? And then if those six are all much of a muchness, you perhaps need to prioritise the ones that have the lower cost as well. That's wicked advice.