Debt Masterclass: Slash the cost of existing credit cards, overdrafts, loans, BNPL and more

24:45Do you leave the accounts open but with zero or minimal debt to show you're not relying heavily on debt? There are a whole load of different factors that go into this. Some companies, when their credit score, like evidence of longevity. Some see that having too much available credit is a risk. Others see that having a lot of credit that you're not using is a positive. It's not the biggest deal for your credit score. You might see it affected on the credit monitoring service score that you get, But remember, the credit scores that you get from credit reference agencies aren't real. They don't really mean anything.

25:18They're just a loose indication of what a typical lender would think, whereas each lender actually scores you differently. So what I would probably do, there are a couple of cards out there like MB &A and Barclay card who tend to give existing customers balance transfer promotional deals. They're not as good as new customer ones, but they might write you and say, hey, you could shift debt to us for 0 % for a year. So if you had one or two of those cards, you might want to keep them just in case you wanted to do that in future and it gives you an extra facility. The rest I would probably just for housekeeping get rid of in case you want to be able to get the new cardholder deals in a couple of years time with the same cards.

25:51I mean, obviously, we want to wean people off credit card borrowing with the exception of Stuzers, which is where you are tactically and deliberately making money out of 0 % debt by saving it at high interest. But that's only for the extremely financially savvy. I would say, at my qualification for what counts as extremely financially savvy, I want you to be getting at least 75 % of the money mastermind questions correct. If you're doing that, then you're probably in the stoozing world. If you're not, then you're more in the Adrian world and you shouldn't be touching it. Okay, I'll take that one on the chin, as I always do.

26:25It's about me to ask you, I've been talking to a couple of people over Christmas, an advancing year, and they were talking about their debts. And I realised they were making the assumption that these debts would die with them. So it didn't matter having debt. What do we say about that? I think that's an incorrect assumption. In the UK, debt doesn't usually die with you, but it isn't inherited by your family either. So the best way to think about it is your debts are paid from what you leave behind, not passed on to your family. So your estate will still be liable to pay your debts, you know, whether it's your credit cards or your loans or whatever it is.

27:08But so it'd come out of your estate and then what would be passed on is what is left. If you didn't have enough in your estate to pay the debts, then nothing would be passed on to your inheritees. But they wouldn't owe the remainder either. Now, clearly, if you've got a guarantor loan or a joint loan or there can be other structures, we're just talking about single loans there. So that's the basic idea. And I bet, Adrian, and let's not out your friends too much. I'm guessing your friends, do they own their own homes? I think there's some mortgages involved. But they've probably got, if you see what I mean, so there's probably equity in there and there's money in there.

27:45So it would come off the estate. So the idea that they can run up debts willy nilly and it'll all be fine when they die because it won't be passed on. Well, it will still it will mean their inheritees will get less. But I mean, look, we've got to be careful going down this road. But what I understand then, and a lot of people are in a position where they don't own their own place. So they've got nothing to leave anyway. It is a very complicated scenario. I wouldn't say people don't have it. There are many people. And obviously it tends to be financially that those who don't own their own place or don't have a mortgage are unable to get as much debt anyway because of the way that the credit scoring process works.

28:26You can be absolutely certain this is all factored in when you're being credit scored. But yes, there will be someone out there who has run up lots of debts and has no assets and who therefore and then passes away and that's it. OK. But I wouldn't get into the brain set of thinking your debt dies with you. No, absolutely. We're not advising this as a strategy. No. Is what we should say. Right then. So where shall we go now? I think we're talking overdrafts, aren't we? Yeah, so I'd like to do my impression of how I feel about overdrafts. Okay. Whoop, whoop, whoop, warning, warning, warning. I said this earlier, overdrafts are probably the most dangerous form of mainstream debt out there.

29:14And people don't even think of them as a debt. Worse than credit card debt. Oh, yeah. I mean, this is the interesting thing. People think credit card's bad. Debit cards, ding, good. But if you're overdrawn, it's credit cards, bad. Debit cards, worse. Almost every UK bank's interest rate on its overdraft is 40%. A typical high street credit card that you haven't got a 0 % deal on is 24.9%. So therefore, the overdraft is costing you, you know, 60, 70 percent more than the debt on a credit card. And what really I want to ramp in on this is there will be people out there who have credit card debt at 24.9 percent and they have an overdraft and they go, oh, I need to pay my credit cards off.

30:05I'm going to try and put as much as I can to pay my credit cards off. But they're doing it out of their overdraft. So they're clearing a debt at 24.9 percent to borrow more at 40 percent. It's absolutely crackers. And if I go back to my very beginning of the show where I structured this as you need to repay, line everything up in order of highest cost and repay the most expensive, for many people that will be the overdraft. So you have to think of an overdraft like a debt. And when we talk about repaying it, what do I mean by that? Well, let's say you're 500 quid overdrawn and your aim is to repay 100 quid a month.

30:37At the start of next month, you want to be 400 quid overdrawn. And the month after, you want to be 300 quid overdrawn. And you want to do that as a rigorous system. But because of the nature of the way overdrafts works, it's very conceptually difficult for people to grasp hold of that. So let me give you a few other solutions just quickly on overdrafts. First Direct is currently offering new switches£175 and it has the biggest interest-free overdraft on the market, which is£250 interest-free that most not every new applicant gets. So if you had a small overdraft or you're the type of person who dips into their overdraft on occasion, which is still very expensive.

31:14This is a good account for you. So let's just imagine someone's got 400 quid overdrawn. The£175 pays some of that off. You now owe 225 quid. That's within your 0 % limit. It's interest-free. There's Club Lloyd's that pays you 250 quid for switching at the moment that has a smaller£100 0 % buffer zone for people who very rarely do large overdrafts may well be worthwhile. Otherwise, okay, deep breath, getting complicated. You can look at shifting your overdraft onto a 0 % credit card, because obviously 0 % is a lot cheaper than 40%. There are two methods to do this. The first is conceptually the best one, which is a money transfer credit card.

31:55There are very few of these available. It's a bit like a balance transfer I described earlier. A money transfer is when you get a new credit card that pays money into your bank account for you, So effectively clearing your overdraft and you now owe the credit card at 0%. Best on the market at the moment is Tesco, 14 months 0%, but with a 4 % fee. And so as you can see, it's not that long as 0 % and there's still quite a hefty fee on a short 0%. An alternative strategy, Adrian, hopefully you'll get this. So it's to use a 0 % for purchases credit card. but this is only for people who've got financial discipline and they trust themselves on their spending.

32:37And hopefully, you know, that will be people who originally got a credit card for a deliberate one-off purchase that was budgeted for. So here's what you do, right? Let's imagine you've got£1 ,000 on your overdraft. You get yourself a 0 % for spending card that lasts 25 months 0%. You then spend on the credit card and you do all your normal spending on the credit card. So what happens to your bank account if you're now spending on your normal money on your credit card? Well, it stays where it is. And your income goes in and starts to clear the overdraft because you're not spending from your bank account, you're spending on the credit card.

33:18So you're effectively building up 0 % debt on the credit card, which means you're paying off your overdraft. This is an indirect way to transfer your overdraft to a 0 % credit card. The reason I say it needs financial discipline is it is not an excuse for spending more. It should rigorously minimise your spending. Once you've cleared the overdraft, you stop spending on the 0 % card and you make sure you have the repayment so you can clear the 0 % card. It's just a way of cutting the interest. It is not a way to give you access to more cash that you shouldn't be getting or shouldn't be borrowing anymore.

33:48And then you need to follow all those balance transfer golden rules that I said earlier. One final trick on overdrafts for people. It's not always that easy to do, but it's worth looking at. If you're regularly overdrawn at the end of the month, see if you can shift your direct debits to just before payday. It means you will not be overdrawn as heavily during the month and it will save you money just by shifting the payment dates. OK. Keith says, how is it OK to charge a pound a day for an agreed overdraft? Surely this should be cheaper if you agree it in advance. Agreed overdraft is just your overdraft facility.

34:23Look, I have real problems on what go on with overdraft. It used to be that you would charge the fee and it'd be a daily fee with some banks, irrespective of the interest. And that would be very expensive for small overdrafts, but far cheaper for big overdrafts. And then, I mean, I think it was at the start of the pandemic. So it must have been around 2020. The regulator decided it was going to ban fees and make sure that all overdrafts had to be done on an APR rate. And this was done to improve competition and to improve transparency. saying I was not in favour at the time. And it resulted in this blanket, this standard, and it's unbelievably standard.

34:59There are only a few who don't do it. New 39.9 % APR cost of overdrafts. There is very little competition in the overdraft market. There's a few challenger banks at 20 or 30%. But I mean, effectively, we just have this standard 40 % charge. Now you say, how's it fire to charge a pound a day for being overdrawn? Well, they don't charge. It's an interest rate. So if you're a penny overdrawn, it won't cost you very much. But if you're three grand overdrawn, it's going to cost you a lot. And that's the way that it works. Is it fair? It doesn't really matter, does it? They can do it. It's legal. Can we just go back and talk about buy now, pay later?

35:34I'm really interested in this. I'm getting bombarded with it, you know, on bidding of these buy now, pay later offers. Well, look, buy now, pay later is a debt. It seems like it's a lifestyle choice. And in the early days, it was marketed as such. It is very easy to do. It's the ubiquitous every time you pay for something. Hey, don't pay for it. Why not spread it into three easy repayments at interest free? It sounds great. Now, here's a couple of problems. How does the business model work? Why would they have buy now pay later if it's interest free? The answer is very simple. Shops pay. They like it because people spend more.

36:10The fact that this encourages spending and it encourages people to spend things they cannot afford. That's why I've always been concerned about it. And I lobbied for regulation. That regulation comes in July. So it's worth understanding by now pay later is not currently regulated. If you fail to repay, it can hit your credit score in certain circumstances and they can chase you for debts and you can't go to the ombudsman yet because it's not regulated. But that will be changing from July. Having said that, if it's for a planned, deliberate one-off spend that you need to spread the cost. It is interest-free and it works.

36:43So I'm not anti it. I'm just anti some of the flaccid nature of the way it's been regulated, operated and marketed. So what can I tell you? It's interest-free. I can't cut the cost. But for people who are struggling right now, most of the big firms do have options to delay repayments. Though do be aware if you delay your repayment now, this can reduce the gap between the next payment. So your next payment is going to come quicker. So although it might help you get over that old January hunt where you're paid early in December and later in January. None of these first step repayment delays will impact your credit file.

37:20You've got Klarna, which is called extend your due date by up to 10 days. Clearpay is called move payment. PayPal's paying three is called a payment holiday. And Zilch is called a snooze. But with Zilch, you have to pay to do the snooze. A couple of them do have more substantial help mechanisms for those who really can't pay to delay payments longer. That will tend to stop you using them in future and also will have an impact on your credit score. But if you are struggling with those, you could delay the payment a few days at the moment that might be able to help you. But also I would say, remember, buy now, pay later is a debt and it should be treated with the seriousness when you get it out and the non-impulse based decision of any other debt.

38:04Shall we do a few telluses? Yes, you start because I need to change page. OK, so this is... We want your realistic New Year money goals. Yeah, not resolutions. Resolutions last about as long as the turkey after Christmas. These are goals. What have you got in your head? It's a better way to think about it, I think. OK, Louise says, I'm planning to put some money aside each month to pay for Christmas this year. Sensible. Christmas, typical cost for a family,£800. So, you know, put 60 quid aside a month rather than trying to pay it all out of December will mean a lot less stress at the end of the year and a lot less risk that you had to borrow for it.

38:39Well done, Louise. Fiona Bowie. Pay off debt. Two loans finished this year and build up an emergency fund. Very sensible. Not doing well so far. Waiting for locksmith from my back door. See, that's why you would have an emergency fund as the handle mechanism went on Saturday. Sorry to hear that. But the emergency funds are crucial. Debt and saving are two sides of the same coin. With debt, you pay for something, then you give the bank money each month afterwards and it charges you interest. With savings, you pay for something each month in advance and the bank gives you interest and then you pay for it.

39:14It's the same thing, opposite way round. You're far better off to be saving for something and then having an emergency fund to pay. Okay. Natasha Smasher says, someone with ADHD, I'm trying to get a grip on my finances, setting up a DMP for outstanding debts. debt management plan. Okay, set up a small standing order to save with my community bank. It's not as easy to get. That starts shopping at low-cost places, Aldi, Littleford, Big Shop. More use of community fridge. Continue with bulk cooking. Stick to shopping lists to minimise impulsive spends. I'm 52 this year. I want to be in a better place leading up to retirement.

39:50I'll never be wealthy, but I'd like to stop living by the seat of my pants. We salute you, Natasha. We do salute you, Natasha, and money management can be tough for those people who have ADHD. Many people have been in touch and talked to me about those issues in the past. So that sounds like a really good and strong list. The only small critique I would make is while it's absolutely right to be looking at saving, if those debts are expensive, you may be better to try and get rid of the debts first, just because the saving is not going to gain you what the debts would. Although I understand why psychologically you'd like to have a little savings emergency fund to stop you in future.

40:25but well done and I wish you the best and I hope you have a wonderful 2026 and you achieve all of those goals Do you want to do Vicky? You do Vicky Vicky in Cambridge, I'm having a no spend year, I've joined the National Trust so I don't go shopping, I take my lunch and coffee with me to save money and just those, I mean I dread to think what I spend in coffee every year, and you've said in the past, you know, add up your daily spends. Well here's the magic number right there are a number of magic numbers you have let me try and remember them 12 52 250 and 365 you know three of them the 250 is a typical working days so if you buy coffee on your way to work every day and the coffee costs you£4 that's a grand a year I bought two today I've got to say Two grand a year Yeah So I mean That's where we put it Into expect Now Vicky's interesting No spend year I mean that's very difficult To do a no spend year One of the ways People find really helpful Is to have no spend days So when you pick The day of the week You pick like a Tuesday And a Thursday And you say I am not going to spend Any money today You might need transport For work But you know I'm not going to spend Any money on a Tuesday And Thursday And it can be habit forming I had a program Called Extreme Savers Once where we tried this experiment with people who wanted to cut back and they found that having no spend days really gave them where they were absolutely fixated on those days of not spending really helped their overall money situation.

42:04This is the time of the show where I start asking you more questions in the hope that you'll forget about Mastermind. Play the theme tune.

42:16Adrian, welcome to the first Money Mastermind of 2026. the score stands at you have got 15 right and 28 wrong in this three option multiple choice quiz, which means that you are currently

42:34just better than random chance. Now the score doesn't reset at the start of this year, but I'm going to keep a separate tally for the new year as well. So you could sort of see this as a fresh start for you to be absolutely smashing random chance and make me have to make a new sting that says smashing the pants off random chance. STPBRC. And, Adrian, as it's a new year, I'm going to do this differently. Oh, right, OK. No more roast-based questions. I'm not sure that's going to last, but today at least. Instead, let's imagine, diddle it, diddle it, diddle it, that you briefly, fleetingly, absolutely nailed it.

43:11Yes, you had a real touch of financial genius ten years ago. You invested£10 ,000 in the Biff Tannen Future Tech Fund that didn't just perform well, it was full flux capacitor. Today, that£10 ,000 investment is worth£55 ,000 and you've decided, and who can question your judgment having made such a good decision in the first place, you have decided to sell it. So you bought a fund for£10 ,000 a decade ago, you sell it today for£55 ,000. Which of these correctly describes the tax situation? For ease, we're going to assume you haven't bought or sold any other funds or any other things that attract capital gains tax over the last 10 years.

43:55So you're with me, Adrian? OK, yeah. Is it A, you pay capital gains tax on£47 ,000, which is the£50 ,000 you gained... Sorry. I've just realised I altered the question, got the numbers wrong. I'm just going to have to... I'm just talking about yourselves. You pay capital gains tax on£42 ,000, which is the... I'm loving this. Oh, this is one of the best days of my life. I'm changing the question, everybody. It serves you right. It serves you right. OK, Adrian. He's worse than random chance listeners. He can't even figure out his own questions with which to torture me. So, Adrian, you bought it for£5 ,000 a decade ago and you sold it for£55 ,000 today, OK?

44:46Right, not£10 ,000. So I bought it for£5 ,000 and I sold it for... I'm actually blushing. I rib you every week of this and I'm just absolutely gone. I bought it for£5 ,000 and I sold it for£55 ,000. Is that right or are you going to change that again? Correct. So you made a gain of£50 ,000. Right, OK. So here are the three options. You pay capital gains tax on£47 ,000, which is the£50 ,000 gain minus the current£3 ,000 capital gains tax allowance for the year. B, you pay capital gains tax on£41 ,000, which is the£50 ,000 gain minus the current£3 ,000 allowance, and you've carried forward up to two years of previous unused allowances, making it£9 ,000 that you can offset.

45:39So the gain that you're taxed on is£41 ,000. or C, you pay capital gains tax on£20 ,000, which is the£50 ,000 gain minus this year's£3 ,000, which is the annual allowance. And you get that for each year that you had the investment. So, you effectively get£30 ,000 off. So, you're only paying capital gains tax on£20 ,000. So, I'll summarise the three options without doing the numbers. The first one is you just get this year's capital gains tax allowance. The second one is you can carry back the past capital gains tax allowance for two years. And the third one is you get the capital gains tax allowance for every year that you had the investment.

46:16Are you on your phone? What can I say? I am, but not for that. Somebody's just texting me asking me if I want a cup of tea. So, and the answer is yes. Okay. It's not a multiple choice. It's nice to be asked a straightforward question. You don't get a point. Yeah. Okay. I wish I knew what the, I should, I just, I I don't know the capital gains tax. I mean, logically, I don't know, but logic. So I'm going to go for how I think, what should be sensible, even though I know that's probably wrong. So you've had the investment 10 years. Yeah, and it seems mad. I mean, it seems mad to pay all capital gains tax just on the year in which...

46:57The year it crystallises. If you'd bought it in the same year, he bought it this year for 5 ,000 and sold it for 55 ,000, then, you know, you should, yeah, then obviously only the 3 ,000 allowance were applied. So I think it's C. I think you can carry over. I think, no, that's probably wrong. No, I think it's B. I think it's the one in the middle. Well, you get two years that you can carry forward. Yeah, yeah. Okay. Well, you certainly can carry forward losses. So if you'd had losses in previous years, you may be able to offset the gain in this year. But we did say in the question that you couldn't do that because you'd had no price sales or anything else that attracted capital gains tax.

47:40But how would you have carried over losses if the loss hadn't been crystallised because you still had... No, not losses on this. So if you had sold an investment at a loss last tax year, so you were down 4 ,000, you could offset against this year's gain. Okay. Do you see what I mean? Yeah. So, but you cannot carry forward your capital gains tax allowance. So give me an uh-uh. You, the correct answer is A, you pay capital gains tax on£47 ,000, which is£50 ,000 gain minus the£3 ,000 capital gains tax allowance for the year you sold it. And that's why I have done this question so people understand that.

48:19Now, this is one of the reasons why shares ISAs are so powerful in a way compared to a cash ISA. because in a shares ISA, you don't pay capital gains tax. If you'd bought that in a shares ISA, you wouldn't pay any tax on it at all. And while most times you put money in savings, you get interest each year, so then it goes to that year's allowance. If you're buying something that's a capital gain, it's all crystallised at the point of sale. Now, there is a way you can do a thing called bed and breakfasting, which is when, So let's say last year you could have sold that investment and then waited 30 days and bought it back.

48:58And that would have crystallised whatever position you were in last year. And then you bought it back and it carries on like it's a new investment at that point. But outside of an ISA, it can be really expensive. And basic rate income taxpayers pay 18 % gains above the annual exempt amount. Higher or additional rate taxpayers pay 24 % gains. So if there were a choice, and people don't necessarily do this, But if you had a choice between a cash ISA and a shares ISA, and you had some shares that you were hoping were going to grow, well, because of the way this works, if it's a substantial amount, you want to be protecting it in your shares ISA.

49:30Because all of the gain, it is all about the tax year that you crystallise the gain. How long you've had the investment doesn't matter for those purposes. It's quite staggering, isn't it? It is quite staggering. Informative as ever. And enjoyable. My favourite moment ever since we've been working together when you got something wrong in your question to me. you're going to make sure that goes in the best of stuff we do next Christmas aren't you it's going to be my ringtone on my phone that is right well that's the main bit done I'm now in the pod extras bit with podcast producer Matt happy new year Matt happy new year good to be back can you believe can you believe I got the mastermind question I messed it up and I just gave Adrian that opportunity that he's long been waiting for it was perfect it was almost like it was a little present to Adrian oh but his little face when you did it.

50:19He loved it. I know. I'm so gutted. I'll tell you what happened. I mean, this is probably very boring for everyone listening, but I'll tell them anyway. So we record the podcast on a Thursday lunchtime, as you'll know if you listen to Five Live. Normally, Thursday lunchtime, Thursday morning, I get up and I go through the podcast and just have a final check of, you know, the mastermind question and everything before I go. But I was on this morning, on ITV this morning, which I don't normally do, but they've moved studio and they wanted me to go in, so I did it for them as a favour. and I didn't have time to do the question read.

50:51So I hadn't done my usual quick read-through of the mastermind question beforehand. And you see, proper preparation is always needed, no matter who you are. So when I do the podcast, the answers to the questions, I mean, that's my job, that's my stocking trade. But trying to deliver the podcast, the mastermind question, make all that work, is something that I do check on. And I got it wrong. Anyway. Anyway. We've still got one element left, haven't we, that we haven't covered? We do. We need to cover loans. So I think we've got some questions on it. Let me just talk you through the basics of cutting the cost of existing loans because everything I'm talking about today is cutting the cost.

51:33It's not about new borrowing. So we've had rate cuts, four rate cuts over the last year in the UK in 2025. and on the back of that loan rates have improved a smidge, a tad, a sous-son if you like. So if you've got a loan it is worth doing a five-minute check to see if you can cut its cost especially if your credit worthiness or income has improved since you got it. It isn't the simplest thing to do. I'm going to try and talk you through the stages. The very raw stage to see if it's worth doing though is, are the cheapest loans on the market now, and this is for those with a better credit score who are able to get, tend to get the cheapest loans, cheaper than what you currently have?

52:18So to run through very quickly, for up to£3 ,000, Zopa is 9.9%. For£3 ,000 to£5 ,000, Nivuna is 9.7%. For£5 ,000 to£7 ,500, M &S Bank, Santander and Tesco are all 6.9%. For£7 ,500 half to 25 grand, M &S is 5.8%. So those are just scales and magnitudes. Don't worry about the actual bank. You'd want to go into an eligibility calculator here too. Remember, as always with loans, those rates are representative APR, which means sadly only 51 % of accepted customers need get that rate. So you might apply and find you get more and it's very difficult to sort that through. So if you find that you're going, yeah, that is cheaper than the loan I've currently got.

53:02an ABC for you. A, ask your current lender for a settlement figure. That's how much it would cost to clear your current loan, including any early repayment charges now. And that tells you how big a new loan you will need to get in order to clear it. So A, it's your settlement figure. Then B, you need to find your cheapest loan for that settlement figure. So then you go into an eligibility calculator and see what your chances are of getting one of those cheap loans for the amount of borrowing that you need to clear the first one, to clear the settlement. And then C, you need to compare the new loan to what you'd pay on the current one.

53:40So multiply your monthly payments and how many months you have left on the current loan, ask the lender if you don't know, to find how much you'll pay if you'll stick, then compare that with what the costs will be on the new loan repayments over the same term. The new loan is cheaper over that period, factoring everything in, it's worth switching. If it isn't cheaper, you may as well stay where you are. Hopefully that makes sense. It's an ABC and you have to follow that because there can be early repayment penalties if you clear an existing loan. Right, got it. Do you want some questions from listeners?

54:12Always. As long as they're good ones that I can answer. Two good ones for you. Starting with Joanne. She says, we have two loans. One's being overpaid, one's not. Two credit cards, one's at 0 % interest one is not I don't want to be paying debt off for 10 years so haven't looked at a consolidation loan but I do want to ensure these are paid off quicker and ideally with no interest on any of them do you have any suggestions it's going to be very difficult to shift a loan to a credit card so I mean there are ways to do it I talked about money transfer cards earlier but that's only 14 months 0 % and you might not get the level of the credit limit so and first of all get the other balance transfer at 0 % that's your easy win so with with the card that isn't at 0%, get that to 0%.

54:53With the loans, you can go through the process I've just talked about at seeing if you can cut the cost. If they're relatively small, then you might, if you can repay them really quickly, be able to put them on a money transfer credit card and shift the loan to that. I think it's going to be tough. I think with the loans, you're going to have to accept that you're going to pay some interest. The credit cards though, you should be able to shift to 0%. And hopefully everything I've talked about in the podcast so far will have tooled you up in order to know what to do with that. And Catherine asks, what's the difference between a secured loan and an unsecured?

55:27And what are the cons to secured loans? OK, so it's a really interesting question. We hear this word secure and it's sort of like you think security. But actually, a secured loan is security for the lender, not for you. and what it means is in the event that you can't pay, it is far easier for them to take your home because it's secured on an asset. Generally, it's secured on your home. It can be secured on other things in some circumstances. So the classic example of a secured loan is a mortgage. A mortgage is a loan on your property, which if you can't repay, they can repossess your home and they own your home.

56:07Now, when we talk about secured loans in the market, they tend to be what's called second charge. So they have a secondary charge on your property. Your mortgage is first charge. So the mortgage would be paid first and then these would be the second charge. Secured loans tend to be longer loans than normal standard personal loans, the ones I've talked about, which are unsecured loans. Everything else remaining equal, the same loan, same interest rate, same length, you want an unsecured loan. I mean, it is not impossible they can take your house on an unsecured loan, but this is incredibly difficult for them to do so via court process and such.

56:40The advantage of secured loans, it might be easier for some people to get, those who own a property. They can often be over longer terms and the interest rates depending can be cheaper, but you have to be aware of the risk. It's also worth noting that if you have a second loan on your home, it can make selling it or getting a new mortgage tougher if you have that second loan. So all of those need to be weighed up. Generally, if you're just looking for£5 ,000 for a planned budgeted for one-off, you would look at an unsecured loan. And I think that is where we're done on debt cost cutting. If you've got further questions, even though we won't be doing it in the main pod, of course, we have the Question Time pod that we put out every Monday.

57:24So if you want and you've got questions on the back of all that, then just email to martinlewispodcast at bbc.co.uk and we might answer it in the Question Time pod, which is me and you, isn't it? It is. That's our double hadder there. Matt, I'm done on debt busting for today. I love the tellers shall we do a couple more tellers before we finish yeah let's do it tellers you will remember was what are your realistic new year money goals and how do you plan to achieve them and I think Matt let you start you can do the first one okay Laura we have a few financial goals this year number one is to bring the mortgage down to below £300 ,000 number two is to increase our emergency funds to£1 ,500 and number three is to start planning for Christmas earlier she says in September and set clear budgets.

58:09I'm not entirely sure why we've always waited till December to get everything when Christmas stuff is out in the shops from August. Fingers crossed you get there, Laura. All sounds very sensible. Mick, I'll finally be in a position this year to have less bills and more scope to save the full amount of my lifetime ISA up to£4 ,000 a year, a 25 % boost on top for first-time buyers, aged between 18 to 39. But do remember, if you're buying a property over£450 ,000 and you would have to have a penalty to pay your money, take your money out. Getting on the... That was me, not Mick. I think you realise.

58:40Getting on the property ladder is my main priority with the next five, six years. Good luck to you, Mick, on that one. Annie, honestly, this year I'm not setting any. People probably laugh when they see this comment, but I'm so sick of planning and planning because stuff happens and money gets messed up, yet somehow I always make it through. I mean, we wouldn't do half the stuff we do, having kids or animals, if we fretted about money. Live within means where I can and occasionally push the boat out. I refuse to worry about money any longer. I've worried about it for 35 years, no more. Oh, Annie, I struggle with that one, I'm afraid.

59:11I'm sorry. I don't want you worrying about money. The whole point of what I do is to try and, you know, improve net happiness by reducing worry and making sure people's money stretches further. But the idea is it will always sort itself out. Planning and planning is important in money. It is a job. It's a job of home admin. It's not a particularly enjoyable one, but it is worth taking the time to do it. Making sure that you have an emergency fund is absolutely crucial, assuming that you're not in debt. So I get you're not going to fret about money. I get you're not going to plan the big things, but making sure that everything is in place and you're not paying massively over the odds for your bills.

59:49You know, I said this on my tele show the other day. Often when I go, people who haven't really sorted their finances out and you go and look at it, just by cutting their bills without anything that actually changed their lifestyle, they can often save over a grand. You know, clearly those are not people on the very lowest of incomes. Those are people who have reasonable incomes and just have all the, you know, they have their mobile phones and their broadband and all that, and they don't bother churning and changing and bank accounts. Now, if we say£1 ,000, and if you took a day off work to save£1 ,000, a day off work to sort my money, no, heaven forbid.

1:00:22But think about this for a second. If you took a day off work and it was lucrative enough to save you£1 ,000 and also get your pensions and your tax and your power of attorney and your wills and get everything done and everything in order. Well, how many people earn£1 ,000 a day at work? You know, £1 ,000 a day, let's say you work 250 days a year, that's£250 ,000 a year. Let's think about the tax that you'd pay on that. You would need to be earning£450 ,000 a year before it didn't add up to take a day off work if you could save a grand, if you never normally do it. So I get your point, Annie, but I mean, hey, my whole profession is about saying the opposite and I'm not going to change it just to be nice.

1:01:01Shall we do a final one on that? Yes. So let's move off Annie and me having, you know, punch up with our tellers contributors. Go on then, you pick one. Samantha, to save, save, save. I have a big, big, big in capital letters, home improvement due either this year or next year and I want to save as much as possible to reduce the amount I need to borrow. Looking at a£20 ,000 plus bill and I would rather save up for it, than get a loan. Quite right, Samantha. Wish you the best on that one. And you do the last one, Matt. From Suvi, I intend to save less, I think. I have enough savings. Do I need to realign my financial attitude?

1:01:36I save a lot and plan heavily for the future since having children. I need to enjoy some spending on things before my kids are adults and my body's too tired to enjoy it. Do you know what, Suvi, you might be surprised, but I don't really have a problem with that. If you've got enough in savings and I hope you're looking for the future, you're also thinking about doing some investing with that too, because over the long term, if it's money you don't need, then investing would be worthwhile. My whole remit, right, I remember years ago, someone, I was a TV presenter, and they said, oh, you're going to hate me.

1:02:03I just flew to New York on Concord and came back on the QE2 or whatever it was. It probably wasn't that long ago, but you get the point that I'm making, right? And I said, why would I do that? If you check, you can get it the cheapest possible and you could afford to do so. I don't have a problem. My philosophy is about maximising the utility of your money. And if you've got savings and you're protected and you're investing for the future and you're financially secure, well, yeah. And you want to spend it and that will give you more enjoyment and not cause you any stress. And you're checking that it's the cheapest price possible.

1:02:37Do it. I mean, it goes back to the fact that I have two money mantras, right? I have a money mantra for people who are skint and a money mantra for people who aren't skint. the one for people who aren't skint is will I use it is it worth it have I checked whether it's available cheaper elsewhere and so will I use it if you're not going to use it you shouldn't be buying it even if you've got the money is it worth it this is the crucial one what is the game what is the utility that you'll get from it you know it might be that do you know what I could spend 500 quid on that I use it once but I could use the money for so many other things I would enjoy more and have I checked whether it's available cheaper elsewhere well I am the money saving expert So, Suvi, have a great year.

1:03:15And I think that's a good place to stop.

1:03:20And that's it for this week, though not this year. Two podcasts a week, that's what we'll be doing. If you've enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. And why not subscribe? Then your pockets will be pleased with you too. We tend to put out a new episode every Thursday and the other pod is on a Monday, our Question Time podcast, where you can ask me absolutely anything and everything within reason. Just send your questions to martinlewispodcast at bbc.co.uk. And if you haven't enjoyed it... I've got bills. I've got to pay. So I'm going to work, work, work, work every day.

1:03:59I've got a mouth. I've got a fee. So I'm going to make sure that everybody eats. Martin Lewis is the founder of moneysavingexpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing martinlewispodcast at bbc.co.uk. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.