In short
The Martin Lewis Podcast - Episode Summary
Episode Information
- Title: Fix energy before 10% rise hits? | Council tax warning! | Free £175 bank switch is back
- Description: Martin Lewis shares energy tips ahead of the energy price cap on October 1. He also discusses the upcoming increase in stamp prices and Adrian Chiles attempts his first Mastermind quiz.
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Key Topics Discussed
- Energy Price Cap Increase
- Date of Increase: October 1
- Expected Rise: 10%
- Predictions:
- Post-increase, prices will stabilize but remain higher than current rates.
- Average annual energy bill expected to rise from £1,570 to £1,720.
- Further increases expected in January (1-3%) and a slight decrease in April and July.
- Should You Fix Your Energy Tariff?
- Recommendation: Yes, if you are risk-averse.
- Current Options:
- British Gas offering a one-year fix at a marginally higher rate than current prices but lower than projected prices.
- The importance of understanding how fixed tariffs work; while they lock in rates, actual bills depend on usage.
- Council Tax Payment Practices
- Current Issues: Aggressive collection practices leading to severe consequences for those missing payments.
- Research indicates 71 out of 100 councils apply these aggressive practices.
- Warnings about the risks of falling behind, which can lead to bailiff intervention within as little as six weeks.
- Winter Fuel Payment Concerns
- Changes: Only pensioners on pension credit will receive payments.
- Wider Impact: Approximately 10 million pensioners may be financially impacted.
- Advice: Encourage low-income pensioners to check their eligibility for pension credit.
- Upcoming Stamp Price Increase
- Effective Date: October 7
- Price Rise: From £1.35 to £1.65 for first-class stamps.
- Listener Engagement: Collect stories about how much people have saved by stocking up on stamps before price increases.
- Money-Saving Tips
- Bank Switch Offer: First Direct offers £175 for switching accounts, along with a 0% overdraft and a high-interest savings account.
- Travel Tip: £70 returns on Eurostar to Paris, Lille, or Brussels as part of a flash sale.
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Key Takeaways
- Energy Tips: It's advisable to fix your energy tariff now due to the imminent price rise.
- Council Tax Collection: Aggressive practices can lead to financial distress for vulnerable individuals, highlighting the need for better support systems.
- Financial Literacy: Importance of checking eligibility for various benefits, especially for pensioners, to avoid leaving money on the table.
- Stamp Collecting: Collecting stamps before price increases can lead to substantial savings over time.
Conclusion Martin Lewis's podcast provides vital insights into current financial issues, including rising energy costs, aggressive council tax collection, and practical money-saving tips. The discussions emphasize the need for increased awareness and proactive financial management, especially among vulnerable populations.
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Further Engagement Listeners are encouraged to reach out with their own experiences and questions regarding financial matters to continue the dialogue and share valuable insights.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01BBC Sounds. Music. Radio. Podcast. Hello, I'm Martin Lewis, and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually much of it comes from my BBC Radio 5 live show with Adrian Childs. Yes, it's a new series, we've moved slot, and it's now with the West Brom bombshell himself. But don't worry, there's bonus money-saving tips just for you lucky, lucky podcast listeners too. In today's pod, the big subject. Energy bills are going to rise 10 % on the 1st of October. So should you fix now? Spoiler for many, yes. And can you cut the cost of standing charges?
0:40Spoiler for many, yes. We talk too about the winter fuel payments and pension credit. Then there's a warning for everybody who pays council tax bills. Plus, in the tellers, it's all about the fact the price of a first class stamp is rising again by 30p on the 7th of October. So we want to know how much you've saved in the past by stocking up on stamps. some people have made literally thousands of pounds. I've got tips on how to get free Coca-Cola and a£70 trip to Paris. And it's Adrian's first money mastermind, which I'm going to use as a way to tell you about a new£175 of free cash you can get in time for Christmas by switching bank, and you can also get a 0 % overdraft with it too.
1:27There's a lot to do. Play the theme tune.
1:48I just love that theme tune and I love Martin Lewis and we haven't done this together for an awful long time, Martin. What a joy this is. What can we expect? I promise not to get in your way. Just kick me under the desk if I mess anything up. Ransom Pants are reunited. How delightful. Ransom pants, that's right. So where should we start then? Okay, the council tax payment, is this all councils? Who does it apply to? Well, so this is with my hat on as chair of the Money and Mental Health Policy Institute charity that I set up. And we did research of over 100 councils and at least 71 were operating these type of practices.
2:27So it is not every council. There are differences in the way that councils operate, but the majority operate this way. Now, I need to be plain. I was quite shocked the more we went into this. Council tax collection practices are so aggressive, they would make banks blush. What you have is within three weeks of missing just one council tax payment, instead of doing what actually a commercial lender would be forced to do with you, which is engage with you, talk to you about the problems. How can you help with your finance? How can we rehabilitate? How can we get you into a position so that you can pay.
3:02What happens with the council within three weeks is they go, you've missed one, pay us for the year. But I haven't got the money for one. You've missed one, pay us for the year. And that is happening across the board. And within another three weeks of that, they can send the bailiffs in. Now, no commercial regulated lender would be able to do anything close to that. It would take them up to six months. More than that, when they apply to court for the permission for the bailiffs, in something that costs, we reckon there is an admin process fee of 50p. Some councils are then adding that to the council tax bill at 150 quid.
3:36Now, when I did the bank charges campaign many years ago, unfair terms in consumer contract meant you couldn't do that. This isn't a consumer contract. This is council tax. What worse though, and this is why we're doing it as a mental health charity, two million people with mental health problems have fallen foul of this. I met an amazing woman at the launch event the other day, Sharon. She got her council tax demand for a year's payment on Christmas Eve and because of the delay in the post, had to pay it in full by Christmas Day. She clearly couldn't do that. She got into a panic. She ended up taking out a credit card at 40 % interest to pay off the council tax.
4:13She then had no way of paying off that credit card and got herself into a catastrophic debt. And this was having missed one monthly instalment? One monthly instalment. Now, councils don't have customers. They have constituents. and all the work that we've done on debt over all the years, before anyone says, yeah, but people need to pay council tax, of course. What we've learnt is if you threaten and bully people, I mean, how the hell someone who's missed one month's payment is going to be able to pay for a year? I don't know. Actually, working with people, giving them a bit of time, enables you to bring more money in when you're collecting debts.
4:45And there's a great example. Barking and Dagenham Council are doing it very well with their internal team who go in to help first. So we are asking the government for a change to the rules that stop councils being able to move this on so quickly and accelerate it. And I also would love, if there are any local councillors listening, many of you often get in touch with me about the terrible situations for your constituents with debt and what's going on. Well, look at your own houses. Look at what you're doing in your councils. And I can tell you, Adrian, I can't tell you how devastating this is.
5:16I wanted to do this primarily as a warning for anyone to realise the consequences of missing a council tax payment. And it's frustrating, I have to warn you, because it should not work like that, but also to start to raise awareness that whenever I talk to debt counselling agencies, your step changes and the others, they always go in hushed tones, yeah, well, you know, the banks and credit card companies are one thing, but the councils are worse. The councils are worse. And I think we need to change that. And I'm not defending the councils far from it, but I suspect they would argue this comes down to resource and they can't, they haven't got the resources, they haven't got to pay people to be on the phone, to be calling, to be saying, what's happened to your payment?
5:56Can we talk about this? I assume that's what they'd argue. Well, I mean, they could argue, but it is an inefficient way to collect debt and it doesn't bring the money in very well. I mean, the percentage return rates once people in these positions are very low. But what it does do is catacise their constituents' finances, ends up with bailiffs going in and ruining people's lives. And there are many non-profit debt counselling agencies out there who can be signposted to, working with people. We've got the regulations changed for consumer debt, but we haven't got them changed for council tax debt.
6:24And council tax debt is absolutely vicious. I get councils are struggling, but bullying, pushing and threatening the most vulnerable people in your council constituency to pay a year's council tax when they can't afford to pay a month's council tax is counterproductive for the council, counterproductive for the economy because it ends up to often mental health catastrophe and taking people out of the workplace and counterproductive to the individual. I can tell you there will be people listening right now who have had exactly this situation and have found it totally destructive. And what we need to do is work with councils.
6:57You know, again, there are some great cases out there of councils who have gone the opposite way and found that the amount of money they're bringing in is the same or more when they're actually trying to help people through their problems rather than trying to just threaten people through their problems. I can imagine a situation where you get this terrifying demand. Instinctively, I'm going to pick up the phone, but there's no one to speak to. I would imagine that's... I would imagine that's tend to apply. And also, if you do get hold of anybody, what are they going to say? Well, you get the terrifying demand.
7:27Well, listen, and then... You have to understand the speed of bailiffs is unprecedented. You don't get that anywhere else. Within six weeks, people have bailiffs to the door. Had a woman telling me on social media this morning how the bailiffs came to her door, and she said, I don't know what to do, I haven't got the money. And he said, well, think what your kids will think when you're in prison. I mean, this is not how your local council should it effectively be operating? Yes, of course, it's subcontracting through the bailiffs when it does that. But these type of operations are not healthy.
7:56And yes, they're short of cash, but that isn't an excuse. I mean, this is devastating, especially for people who already have admin anxiety, who already suffer with depression, who tend to be, you know, if you have a mental health problem, you are three and a half times more likely to be in crisis debt than everybody else. And that's already, when you get one of these threatening letters, people simply, they shut down logical functions, many with mental health problems, with the ability to deal with it. And what we're doing is we're exacerbating that rather than trying to help people through, which again, as I should state, tends to result in better payment to the councils, not worse.
8:34Okay. So what are we calling for at this moment in terms of what more can we do on this? Part of this is awareness raising and just to tell people what's going on. I mean, there are petitions out there, but that's not what we're here to do on the show. The charity, and I know there's another report coming out by Step Change next week that will be similar or the week after. We are calling on government to change the regulations that say that, you know, council tax debt collection should be based on a similar fairness level, at least to the way that credit cards and banks are allowed to work, where the first thing you have to do is try and work with people to help them pay rather than threaten them to force them to pay.
9:07and that it shouldn't be as quick. Six weeks from one mispayment to a bailiff for the entire year's payment doesn't feel right to me. Let's move on to energy. I have this kind of feeling with this that the crisis has sort of passed. From who? From my own ignorance, I'm saying that we know energy price inflation, It was soaring after when it all kicked off in Ukraine and so on. But, you know, it's still a massive issue. Even with the inflation having calmed down, it's still a massive issue for a lot of people. Yeah, and of course this is predicated on two things that are going on at the moment.
9:52The first is on the 1st of October, the energy price cap that dictates the price that the vast majority of homes, over 80 % of homes in England, Scotland and Wales, not Northern Ireland, different system, pay is going up by 10 % just in time for winter. So that's the first thing. The second, of course, is the big debate about the winter fuel payment. This was universal to every pension and now it's only for pensions on pension credit. That means 10 million people won't get it. I have two main concerns on that. My first concern is I think the means testing is too narrow, effectively saying only people who have less than£11 ,400 income.
10:29I think people on£13 ,000,£14 ,000,£15 ,000 of income are going to really struggle without this payment because what's not being said often is it's not just the winter fuel payment that's gone last year they also got a cost of living payment pensioners of£300 on top well that's gone for everybody and the saving from the marginal reduction in energy costs this coming winter to last winter over the six months from October to March is about£100 so you're£100 better off because of lower prices you've lost a£300 cost of living payment and many are now losing the up to£300 winter fuel payment on top So that's a net loss of between£200 and£500 based on looking at energy alone for pensioner households.
11:09My biggest concern, and I've been shouting about this for a decade, is the up to 800 ,000, 880 ,000 homes in the UK who are eligible for pension credit. So therefore, they're poor enough that the government says they should be getting the winter fuel payment, but do not claim it. either due to pride or lack of knowledge, lack of outreach, onset dementia and other similar issues that stop people claiming it. And they are the poorest in society. Pensioners are under£11 ,400 of income who will not be getting the winter fuel payment, who do not get the pension credit help they're entitled to. And those are the ones I'm most worried for.
11:47So just as an aside, and that isn't the demographic of this show or the podcast, but if you know a low income pensioner, have a nice friendly word. Have you checked out if you're entitled to pension credit? Just go online and we can do it together or you can call it the pension credit hotline. Just check out if you're entitled to it because it's so important right now. But big picture energy, I think probably the most important thing. I mean, you started with where it is, is what's going to happen. And this is what people need to understand because this is what evidences the decision making that you're going to have.
12:21Right. So we have on the 1st of October prices going up by 10 percent. I'm going to give you the predictions after that because the price cap changes every three months. So on the 1st of October and I'm going to use I hate the typical use figure. It's totally meaningless. Right. No one has typical use, but it gives you an idea of scales of magnitude. So for someone who's paying£1 ,570 a year now, on average, on the 1st of October, they'll be paying£1 ,720 a year. Okay, so you're going up. That's a 10 % rise. The current prediction for January, and we're in that assessment period, is between a 1 % and a 3 % rise again.
13:03So it's going up. Well, exactly how much is debatable between the different prediction organisations. so that would put you on around 1740 compared to 1570 now then in april the current prediction and the further out you go the more crystal ball gazing is a one percent drop take you down a smidge and next july is a two percent drop take you down a smidge so the current prediction is we will go up rapidly in october up a little bit in january down a little bit in april down a little bit in July. And that would leave you even next July on somebody who pays$1 ,570 now, still paying$1 ,690. So right now, if things continue as predicted, even we're going all the way until next September, because that's as far as the predictions go, you're going to be paying substantially more on your energy bills than you do right now.
14:00And the best way to work this out is dead simple. For every£100 you pay on energy now, you're going to be paying around£110 from October onwards. That's the mass. So armed with this displeasing information, what does one do? Well, I mean, I think we've got loads of questions, haven't we? It's probably worth flicking into those, if that's all right. Yeah. OK. Actually, we've got a caller. Why don't we start with a caller uh roger in uh darwin in lancashire how are you roger oh adrian yeah fine thanks hello martin hello roger go on fire away yeah fire away roger so yeah i saw your tweet yesterday and i just thought well i live on my own i work full time at the weekends i'm often out doing bits and bobs i have a two-bedroomed and terrace house six radiation total and i keep using your cheap energy calculation platform and you have got me good deals but with this current situation and the numbers you've just said what just what's the best data i should be using to factor in because i want to sort something out with my energy eon are pretty good but they keep telling me i need a smart me to upgrade and i never seem to be able to get one with the uncles or whatever so based on what you've just been saying then and i'm looking at trying to change I think I'm able to change my tariff without penalty free at the minute.
15:24What should I be looking and factoring in when I choose my next energy plan? So the big question for me is roughly how much are you paying a year or a month, whatever it is, because I need to get an idea of your usage level to work out where I target this. So I'm on a dual fuel tariff, electricity and gas, and my debit is about£85 a month, and it has gone up. and my eon I think they say I'm in despite what I pay when I rescind them my readings they say I I'm in debt to them even though I've been in credit in the past so I'm gonna I'm gonna go make a guess that your annual bill if we factor it all in is around 1200 a year if I factor in that debt to them yeah does that sound about fair which makes you actually quite a low user so you have you have a couple of choices let's say first of all I'm going to ignore your low user stuff because this will help everybody listening.
16:17This is the big question that I get in, is should I fix, right? Should I lock into a cheap tariff now because prices are going up? Now, the answer certainly for anybody who is risk averse is yes. So let me just run you through what's available. Now, let's just go back to that prediction thing because I want to keep this really simple for everybody. Prices are going up by 10 % in October and then they're going up a bit and down a bit and up a bit, But the likelihood is they're going to be around 10 % higher than they are right now for the next year if the predictions are right. And they're certainly going to be 10 % higher from October until December.
16:54And very likely because we know much of that from January on until March. And that's the high use winter period. So that's the one that counts. So you've got a 10 % uplift. Let's look at the fixes out there. A new one actually launched today. It's British Gas. It's a one year fix. Now, how do I make this simple? Okay. it is on that one year fix you will pay roughly 5 % more than the current price cap which is 4 % less than the October price cap right do you see what I mean so you will be paying more than you are now but less than you will be from October which the current predictions and I have to say to everyone it's a crystal ball further out but the predictions up to March are relatively decent are that you'll be So it will be saving you probably around 4%.
17:44The bigger advantage is actually, regardless of what happens, you are locking in to a rate. So you have a guarantee of no rate rises for a year and at a rate that is 4 % cheaper than the October price cap. You mentioned Smart Meter. This particular tariff is one of a couple of the fixes that doesn't require a Smart Meter. So your Smart Meter upgrade issue isn't an issue here. It's for dual fuel or single fuel, monthly direct debit cash and check. If you chose to leave it early, there would be a£50 early exit fees. Now, I should note there are similar price tariffs out there from Outfoxer Market and Eon Next and Octopus.
18:22They all have fixes roughly in that ballpark. British Gas is slightly cheaper, but it's not that material and all allow existing and new customers to come in. There are some cheaper fixes, but they require you to buy a package like a boiler cover on top that's 20, 30 quid a month or sign up to other utilities. So I'm only doing the deals that you can just get by themselves without having to, you know, sign to other stuff. So that's your first logic. So your first step, Roger, is how do I feel about locking in on a tariff? You're going to pay a little bit more for a couple of weeks. And in fact, if you're switching company, it takes about seven days to switch anyway.
18:59So you're going to pay a little bit more for 11 days. But then you'll certainly be cheaper from October until around March, we think, and then probably cheaper onwards, although predictions there can change. What's your instinct on that? What do you think about that? Well, that's actually invaluable advice because it's almost a bit like a mortgage when you should select a fixed rate mortgage for a certain period. You're guaranteed that rate for a period of time. And if you then can control, you'll then know you control your direct debits. You'll have a fixed amount. You just need control more.
19:30And I think that's something that a lot of people may be unsure about. So that advice there already, and you mentioned about the usage, if you don't really need to factor that in, it's just about the price that you're going to be paying. No, no, I need to correct you, Roger. I'm sorry. I'm sorry. A fixed deal gives you a fixed cost for each unit of electricity you use and fixed standing charges. So if you use more, you will pay more. If you use less, you will pay less. It is the rate that you pay that is fixed, not the price you pay. No, totally. Listen, you're brilliant. You're absolutely doing everything I wanted to explain to people.
20:08And this conversation is really helping people. So that's a really important point. I'm going to give you one other option that's worth you looking at. And just as an aside for sophisticated energy users out there, I know about Octopus Tracker and Agile. We'll talk about them later. But, you know, it's about the complexity level appeals to some doesn't to others. And I'm listening to Roger. I'm not sure that's for him. The other one I would mention, because you're a low user, there is a tariff called EDF Ensure One Year Tracker. Now, there are two trackers on the market. They're basically price cap tariff with a discount.
20:45One discounts the unit rate, i.e. the cost you pay for each unit of gas and electricity you use. This one, which is that's the EON Next Pledge. This one, the EDF Ensure One Year Tracker, discounts the standing charge. okay so it discounts the amount you pay each day lots of people complain about standing charges it's 50 pounds a year discount as you're a lower user there is a chance that could work out cheaper than going on the fix but that will still move with the price cap your unit rate so when prices go up it'll move it's just a discount on the standing charge i mean it's totally your choice my instinct is the peace of mind you get on a fix in your situation because if you were if you're a much lower user.
21:28If you've been about£600,£700 a year, I'd definitely be pushing you to a low standing charge tariff. On around£1 ,200, it's much of a muchness. And the peace of mind is probably more valuable. Roger, I hope all that's been helpful. Thank you. Thank you both so much. I won't accept your thanks. I've done nothing. But we drink from the font of Martin's wisdom. You are the conduit to allowing us to get the information out. Well, good. Happy to have played us more. This is our first, and we're going to get smoother and better in this podcast. This podcast and show is going to absolutely fly. It's going to fly.
22:03Roger in Darwin, thanks for that. Thanks, mate. Thanks, Roger. We have – well, there's lots of other questions, and you've covered some of it, I think. But we have some Val in Eastern with EDF of day and night rates. She said, I don't want EDF pay-as-you-go tariff, so she's torn between the EDF essentials one year to September 25 an EDF Insure one-year tracker. Now, that's the difference between discounting what you were just saying. One is the discounted tracker and one is the fix. I mean, first of all, let me just have a look at the price of that EDF. The EDF Essentials one year is 3 % below the current price cap.
22:43So, for example, whereas the British Gas is 4 % below the current price cap. 4 % below the October price cap. This is 3%. So, it's a cheap fix. It's not quite as cheap as British Gas. but if you want to stay where you are, I understand that. I mean, my argument would be, I think, the less you use, the more attractive the Ensure tariff that reduces standing charges for you is. The more you use, the more going for a fix, because while the standing charge is lower, seems good, actually, you want to lock in your unit rate. I'd probably put the balance somewhere in the£900 to£1 ,000 a year. I mean, if you're using£2 ,000 a year, just go and get the cheaper unit rates.
23:21If you're using less than a grand a year, then you want to start thinking about lower standing charges. Linda Fitzgerald with Octopus has looked at switching tariff, but she says when she goes on the app, they say there might be a penalty for switching. OK, so I would presume you're therefore on a fixed tariff. If you're on a fixed tariff, many fixed tariffs have early exit penalties, which means if you leave before the fix ends, you could pay a penalty. Now, that may be as low as£25 per fuel, so£25 for gas,£25 for electricity. In some cases over the last year, we saw them jumping up to£200 of fuel, not specifically with octopus across the market.
23:58Here's the rule. If you are within the last 50 days, so just to be clear, that is 49 days or less of your fix, they cannot charge you an early exit penalty. So if you're within the last 50 days, there are no early exit penalties. Sometimes their websites, and Octopus tend to be pretty good on this type of stuff, so I suspect not. Sometimes their websites say there's an early exit penalty because they're just telling you about the tariff. They're not talking about the time. But they are not legally allowed to charge early exit penalties within the last 50 days, which is why a note for everybody who is fixed, and there aren't that many at the moment, it's about 10%, 15%.
24:36If you have a fix out there, put a note in your diary 49 days before it ends because that's the point you can start to think about shifting. If you have got a penalty, well, then you just have to factor that into the maths of whether it is worth switching or not. I mean, if it's a 50 quid penalty and you're paying a bill of£5 ,000 a year and you can cut your bills quite substantially by locking in a fix now, then 50 quid is neither hither nor tither. If your bills are£1 ,000 a year, 50 quid is important. So the early exit penalty needs to be looked at in the scheme of how much you're paying on energy.
25:08Nicola Roberts is asking, I think it's about the winter fuel payments. If pensioners are just over the threshold for pension credit, what help is available? Can this system be changed? Can the means test be changed, I suppose, Nicola's asking. Well, I've been campaigning on that. And I met Rachel Reeves this week. And I have to be careful. I'm going to do my phrasing carefully here. That is a private meeting, so I can't tell you what happened. But I can tell you my viewpoint. And I tend to be quite consistent in what I say in public and in private. I believe the means testing is too narrow. I've suggested that it should be linked to both pension credit and council tax band A to C, which when you do the numbers looks at most of the poorest pensioner households would be covered by doing that.
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25:51It's an imperfect but workable system. I don't believe the means test will change. I think we may be able to get some change on the way that pension credit application process, and I will be looking at that. So no. So what do you do? Well, first of all, contact your local council. There's a household support fund that may be able to give you money. speak to your energy company a couple of energy companies Octopus we've already mentioned are trying to help people who are missing out on winter fuel if they're going to need help do an online benefits check up go online and see if you're entitled to anything else I'm not promising you will I'm promising it's a good use of 10 minutes of your time there are tools on various and if you can't get online if you can't get online make an appointment at your local citizen's advice or equivalent agency that should be able to help you though that's a longer process I think she emailed you in so I suspect she can get on that.
26:41Julie and Crawley, on Eon Next Pledge tracker, ends in December. Should I stick or move to a fixed rate now, please? It's so hard, isn't it? Well, it's not. It's an interesting one. So I'm just looking at the news time. Do we want to go to the news first, or shall I answer it now? Go on, do this one quickly. OK, so the Eon Next Pledge is the other tracker tariff, so it follows the price cap, but your unit rates, the amount you pay for gas and electricity are discounted by around 3%. So for each unit of energy you use, you pay 3 % left. So look, just to say, if people are sticking on the price cap, either the Ensure tariff that has cheaper standing charges from EDF or the EON Next pledge, which has cheaper unit rates, are no-brainers because they're just the same price cap but cheaper.
27:27So you're on the pledge, it's 3 % cheaper. It will be going up 10 % in October because it moves with the price cap. so it'll still be 3 % cheaper, but it's going up 10 % from where it is right now. You will have early exit penalties if you leave, but you're probably thinking, should I fix? I think once you factor in the early exit penalties and the 3 % discount,
27:54you maybe will be a smidgen better off getting a fix. But if at all, but only a smidgen, and it depends on how much you're using. So in your case, this is why it's a bigger question. For most people, most people say, should I wait until the prices go up before I fix? The problem with that is we don't know what the fixed prices will be in October. And I don't know what the fixed prices will be in December. But in your case, because you're on a slightly cheaper tariff, you're not going to save much by fixing in the interim and you've got early exit penalties. I'd probably wait and cross my fingers that there'll be something cheap in December because it's not worth paying the early exit penalties.
28:33What's this week's tell us? This week's tell us, do you have a stock of old stamps? If so, how old? This is because the first class letter stamps due to rise again by 30p to£1.65 on the 7th of October. So it's currently£1.35. At the start of the year, it was£1.25. It's going up to£1.65. And large first class stamps are going up too. Second class are not going up. Now, the key thing to understand here is if you buy a stamp and it says first on or second for that matter, then it's always a first class stamp and it can always be used no matter what you paid for it. Which is why I would recommend to anyone who's going to need stamps, well, frankly, forever.
29:13If you're going to, you know, for Christmas in five years time, if you haven't got them now, you should be stocking up now on your stamps. Go and buy 10 books, however many you're going to use over the next few years, and stock up on them because they're likely to go up again. But if you buy them now, you're paying 135. You buy them after the 7th of October, you're paying 165. So I wanted to know when people have done this in the past because I've been giving the same information every time stamp prices have gone up for the past decade or so, and that's a lot of time. Bexter says, thanks for the heads up.
29:44As someone who still sends 40-plus cards every Christmas, good effort. I'll buy pre-priced rise and save myself more than£12 Well that's nice to hear You've got the Twitter I'll do the Facebook Gail Fisher says I have old first class stamps without the barcode Try to cash them in No luck What a waste That's not correct Gail So let me give some information out You can pick up or print out a swap form from the Royal Mail website or you can go and get a form from the post office You can't do this at the post office You can go get a form at the post office then you can send in your stamps. If it's under 200 quid, it's the free post swap out.
30:22For stamps worth more than 200 pounds, send to the Royal Mail swap out and you can go and get the address. It'll be on the form. But basically, you get a form from the Royal Mail website or you go into a post office and get a form. You send in your old unbarcoded stamps and they will send you back the same stamps barcoded. And worth noting, if you have old Christmas first class unbarcoded stamps, they can still be used. Okay. Dr. Pete Jones bought 3 ,000 stamps, I assume, at 28p in 2003. Cost£840, as I'm sure you've already worked out, Martin, for a project which went online. Used and gave away about 1 ,500 over 20 years and swapped 1 ,500 for new barcode stamps.
31:071 ,500 left at new prices worth nearly 2 ,500. Better return than my pension. Yeah, I mean, it's unbelievable. I mean, the funny thing is people used to collect stamps because they hoped that the stamp would become a collectible. Now, actually, you collect stamps and you get a bonus just because the price has gone up so much. I mean, that's what we're talking about. And I think we've got a voice note on one of these. Hi, this is Alison. My dad was a stamp collector. He'd buy blocks of mint stamps every time there was a new picture set released. As they're now worth about half of face value if you try to sell them, I've been using them up for a few years, but I still have quite a few with half P values.
31:45as it gets more expensive to post anything it becomes more of a challenge to fit the necessary number of stamps on an envelope well just as long as you're checking that you're they're not better at face value because they're collectibles than you are using them the tip is generally about the first class stamps the ones that say first rather than the stamps with a value on them because the stamps the value on them only have the value of the face value of the stamp so half piece stamps only worth half a penny but uh just check you can't sell it more to a collector for for a little but it's fascinating, this issue.
32:13And really, I was expecting people to have big, big, you know, watches of stamps at home from the past. Tim Armstrong. I have two stamps left in a book of 10 stamps. I'm sure they were 25p. Can't remember when I last used a stamp on a letter. Must be well over seven years ago. But when you need to, Tim, you'll have your stamps at 25p, not£1.65. And that is good future planning. Annette, about eight, ten years ago, I bought four to five booklets of first-class stamps just before a big hike in prices. They've lasted for years. And last year, successfully used Royal Mail stamps, swapped to change them for the new style barcoded stamps.
32:49I post few letters now, but save money over time. There's another voice note here. So let's hear that one. Hi, Martin. It's Jo. Well, I used to enter lots of competitions. So I would bulk buy the stamps marked first and second class and I'd send out hundreds of postcards, envelopes, entry forms every month entering competitions and I built up huge stocks. And then when the recent barcoded stamps came in, I had to send them all away to get them changed. When they came back, I had about£2 ,500 worth. They've actually done better than my pension, so I don't think I've done too bad. It's unbelievable, isn't it?
33:33It is. Stamps worth more than your pension. But then the other way, and I think this is the business model problem for Royal Mail with a consistent increase in stamps. Of course, we understand the problem is fewer people post, therefore it's increasing the price. Sue Taylor Ward. I only bought them for Christmas cards. I put a note in last Christmas to say these would be the last cards in favour of a charitable donation. It was the ever-increasing cost of stamps that was a straw that broke the camel's back. Put stamp prices up, less people post stamps. Less people post letters. let's get back to um energy we've got a caller chris in whitley bay's been holding on for us hi chris what have you got for martin hi um it's just an observation really if i can give you a little bit of background sure um i've been an edf customer for 15 years plus and prior to the energy crisis.
34:24Always managed to sign up for a blue price promise, a fixed term deal. Obviously when the energy crisis happened we all went on standard variable rate. Now EDF are offering three fixed price deals or a tracker. Sure, tracker, essentials fixed one year and two year. but each one of them are demanding that you must have a smart meter to operate that tariff yet prior to the energy crisis I was on all these deals without a smart meter but now they're telling me I have to have a smart meter I don't particularly want a smart meter because obviously they're not fully functional yet there's been several problems with them and I believe that at some point they may decide to change the tariff when it comes to a fixed rate then and put me on a prepayment meter because they're taking full control of it then.
35:27I'm a direct debit customer. I've been with them for 15 years, never been in debt with them, always been in credit. But now the only way I can get one of their fixed rate tariffs is by having a smart meter. So first of all, I mean, smart meters are now, the smart meters being fitted now are fully functional. My problem isn't with the function of them. My problem is too many of them are broken. And because the energy firms have a whip cracked and financial penalties all based on the number of smart meter installs, all the resources are put to installing new start meters, not repairing the ones that they've got.
36:04I'm actually writing to the Secretary of State. I have my first draft. It's in my computer at the moment. I'll be writing to Ed Miliband to explain and to argue that the target should be shifted to working smart meters rather than installs, which would then allow you to be both incentivized for installs and repairing them. But on to your point, we won't debate whether you should or shouldn't have a smart meter. You don't want one. If you're not missing payments, they shouldn't shift you to smart prepay. Or they shouldn't shift you to prepay. So I'd worry less about that. as noted and the reason EDF is probably pushing for a smart meter is it probably hasn't met its smart meter install targets so it's simply they are allowed to say the condition of our cheaper tariff is you must have a smart meter that's allowed so they're doing it but not every firm does that because some firms have met their targets or are getting their targets through other ways so if I look at the list of cheapest fixes I'll do they're in order of price but none of the price differences aren't that big British Gas, no smart meter needed.
37:02Outfox the market, no smart meter needed. Eon Next Fix does require a smart meter. Octopus, no smart meter needed. EDF Essentials does require a smart meter. OVO need to have or apply for a smart meter. So actually quite a lot of them, if you were to switch to British Gas, now there's one thing I realised I haven't said earlier, so I'm going to use a caveat here. When I'm talking about cheap fixes, I'm quoting average prices, but the price you pay depends on where you live in the country. So which is the cheapest for you? Your postcode or the region has a massive impact. So go through a whole of market comparison site to find your cheapest fix.
37:39I'm doing these as examples rather than saying specifics. But for you, the answer is if you're willing to switch, you could get a cheaper fix without a smart meter. How does that work? Okay, cheers, Chris. Thanks very much. Chris in Whitley Bay. I mean, Michelle said something here, a question. So I'm so confused by it all. It used to be so easy. I just want to know how to get the best deal. But there are so many different aspects. I mean, that's kind of obvious to you. But it's been a good seven or eight years since I've fully engaged in this kind of thing, looking at different deals. And it has definitely got more complicated in that time.
38:17I've been away from this. But talking to you, I mean, it was always complicated. But it's absolutely bewildering. Well, in the old days, it was very simple. I would say if you've not switched, switch and you'll save 20%. But those savings aren't available anymore, which is why it's all more nuanced and all more complicated. Let me try and bring this down. Now, I'm going to simplify this. So I'm going to keep this. This is the simple in a nutshell answer. If you're on a price cap tariff, which unless you're on a fix or a special tariff, you are. If you don't know what tariff you're on, you're almost certainly on a price cap tariff because that's the standard tariff, the default tariff.
38:55then if you want price certainty it looks like it will be cheaper to go to a cheap fix now i always say that because some people say i'm getting a fix no it has to be a cheap fix if you're going to lock in lock at a cheap price so go on to you can work out for yourself the ones i think are good a whole of market energy comparison and find your cheapest fix lock in a price for a year and you'll likely save money if the predictions are right and you'll get peace of mind if you're happy to stick on a price cap, look at one of the two tracker tariffs. There's the Eon Next pledge that discounts the unit rate that's better for higher users, or there's the EDF Insure tariff that discounts the standing charge that's better for lower users.
39:36If you are a sophisticated user, so if you're confused about this, you're not a sophisticated user, don't listen. The Octopus Tracker and Octopuff Agile tariffs, the tracker price moves every 30 minutes based on electricity wholesale rates, the Agile tariff moves every day, are generally pretty cheap, but there is a risk you will pay a lot more if wholesale rates go up. So you need to be on top of it and sophisticated, and people do save money with them. If you have an electric vehicle and you use a lot of charge on that, look at a specific electric vehicle tariff. That's my simple summary. Does that make sense?
40:10That does make sense. We need to get to this bit, which I'm dreading, the mastermind. Oh my, not music as well, surely. Yeah, just to really set the tone. Adrian, welcome to your first money mastermind. Currently, you have the unique record of not having got one wrong. Well done. We will be keeping score. Okay. And probably in a year or two, I will contrast you to how well Nihal did on this. Okay. Okay. Now, I'm not going to do a set up with you. That might develop later, but we're just going to keep it straight. Okay. Have you got a calc handy? I've got a calculator, I've got a pen, I've got a piece of paper.
40:48Okay. The highest interest-paying one-year UK savings account on the market is First Direct's Regular Saver. It pays 7 % annual interest. Okay. You can put up to£300 a month in it for a year. If you maxed it out for the year and made no withdrawals and the interest was paid into the account, Yeah. Roughly how much interest would you expect to have at the end of the year? So I'm going to just summarise. So I've given you the technicals. You're putting£300 a month in at 7 % interest for a year. Is it A,£85 roughly, B,£135 roughly, or C,£255 roughly? £300 a month, 7 % interest for a year. Where are you starting?
41:37And I'd just like to remind everybody here of Adrian. How long did you present working lunch for the business? I wasn't the brains. I was surrounded by brilliant people like Adam Shaw and Simon Gompertz. They did all the legwork and Julian Lacey Solomon. They did all the legwork and the brainwork. I just sort of sat in the middle making. You can't phone a friend. You've got to do it yourself. Droll comments. I need to find out what 7 % of 3 ,600 is. So that's 12 times 300 a month. And I've forgotten. How do you do this now? Yeah, 7 % of that is… So you could just times 3 ,600 by 0.07. That's right.
42:14Okay. I'd like to say that doesn't mean that's the right thing to do. No. Okay, so that's… Well, that's£252, but you won't have all that in because that would assume you've had the full amount in for the whole year, which you've only been able to dribble in£300 a year. So it's how much less? I think it's 135. I'll go for 135. Final answer, 135. Final answer, 135. Although allowing for sort of compound interest on that, I'll go for 135. So you are quite right. If you'd had£3 ,600 in for an entire year at 7 % interest, you would expect it to be somewhere north because of compound interest of 250 quid.
43:11But you did spot the flaw in that logic, which is in month one, you have 300 pounds. In month two, you have 600 pounds. In month three, you have 900 pounds. So what would the average be over the year? If you started with zero and you end up with 3 ,600 pounds, the average over the year would be? Would be half of 3 ,600. Which is 1 ,800. And what's 1 ,800 times 0.07? You've got your calculator out. 1 ,800 times 0.07 goes 126. It's 126. But there's always some compound interest on top, so you would expect it to be a little bigger. So unbelievably, in your first mastermind question, can we play the Hallelujah, please?
43:56Adrian, spot on, you got it right. And the reason that this is important is this first direct account is what is called a regular savings account. Many banks have them linked to their main current account. They give much higher rates of interest on small amounts of money. And many people get in touch with me outraged when they see at the end of the year, we can fade the hallelujah out now, when they see at the end of the year how little interest they have. Because they go, hold on, I've got 3 ,600 in there. It's paying 7%. Why haven't I got 250 quid? Because exactly as you worked out in Mastermind, you didn't have that money in over a year.
44:30Now, regular savings accounts are the best place to put your money. but most people expect they will get more interest, which is why the best way to think of it is you will have half the final amount of money in on average over the year, and that would be the interest you get. Now, the reason I chose to talk about First Direct is because this week it has relaunched its free 175 switching bonus. So if you move bank to First Direct and you've never been a customer there before and you're not moving from HSBC and you haven't been an HSBC customer since I think it's 2018, you can get£175. Now, bank switching deals have been around for years, but they've been poor in the last couple of months.
45:13So I'm pleased to see one back. First Direct has five perks in one. So you get the£175 cash. It has a 0 % overdraft up to£250. pounds. Now, most banks overdrafts are 40 % interest at the moment. They are the danger debt, way worse for most people than a high street credit card, nearly double a high street credit card interest. So first direct, 0 % up to 250 quid, and then the same 40 % is everywhere else above that. So just think for a second, you've got 400 quids worth of overdraft. If you shift to first direct, and it will credit score, so not everybody is allowed, but it's not too harsh a credit score, you would then have£175 less because it's paying you the money.
45:51So you now owe£225 and that's all interest free. So you're not going to have interest anymore. So you should be able to work your way out of your overdraft. It comes top or near top of every customer service poll I've ever done. It has 7 % linked regular savings. So if you open the account, you can earn 7 % in your savings, going to earn around£135 interest on the£300 a month you put in. And your debit card is fee free abroad. So if you spend on it abroad, there is no exchange rate going in. There's no exchange rate fiddy added on top. So just as a note, with a bit of old-fashioned, my type of stuff, money saving before the world got depressing and we had to talk about all the type of stuff that I spend my time talking about now.
46:31Right there, if you do it now, you'd get the£175 in time for Christmas and it's a top customer service bank. So unless you really love your bank, and some people do, and that's great, but if you don't love your bank and your bank's not doing anything for you, you might want to go and get the£175. There are some direct debits you need to switch. So do read the eligibility criteria. I've got a daft question about the mastermind question. So you put your£300 in and get your 7 % on the regular saver. So at the end, you've got£3 ,600 plus your£135 of interest. What happens to that money then? What is payable on it then?
47:06So what they do is they tend to move you to a normal account that pays much lower interest. This is why they're one-year accounts. So as with all types of savings that, I mean, and even easy access savings, most of them includes a bonus interest for the first year. When that finishes, you take your 3 ,735. And you don't forget to do this. You don't forget. So you keep a note. And well, you'll know because you stop putting the money in and you go and put it somewhere that earns more interest into a fixed account or an easy access account. Or you even, you know, you go and open up a regular saver somewhere else and you put it in a high interest savings account and you drip feed into a new regular saver.
47:39So with regular savers, they are designed for people who save money a month. But because the interest rate's higher, for those people, and we're moving into nerd territory now, for those people who are nerdy and want to maximise every penny of their savings interest, let's say you had£5 ,000. Let's use this First Direct as an example. you could have your£5 ,000 and you could pay£300 a month into First Direct you have your£5 ,000 in your highest interest easy access account paying you around 5 % then you move it into First Direct each month so you're gradually porting it over that way you're earning interest at 5 % on one pot of money and as you move the money over you're earning interest at 7 % on the other and there are many people because they're open to all I mean there are about 10 different regular savers out there about 7 of them are linked to bank accounts so you could have three or four regular savings accounts with a total of 13, 1400 quid going into them each month, all of them earning more than the top easy access account.
48:38And I hope that was useful. Thanks for being the first one. I enjoyed that. I can't remember why we ended up being called Rants and Pants. Because there was a band who were Rants and Pants. There was some rapper who was Rants and Pants. They decided that I was Rants because I was having a go at something and you decided you self-acclaimed yourself. That's right. That's right. Love it. Great to be with you, Martin. Cheers, mate. OK, you lucky, lucky podcast nistlers. It's that time in the show where I give you tips that are just for you. I should cocoa, I know. Now, it's been a heavy podcast this week, so I'm going to do a couple of light ones.
49:06The first one. Now, people often write to me, or I think they're writing to me, about the train that takes you from London to Paris. They say, Martin, Eurostar. I say, thank you very much. But what we're talking, I know, it was naff. But what we're talking about today is£70 Eurostar returns to Paris, Lille or Brussels from London, St Pancras. Basically, it's got a flash sale on for£35 one-way fares. So if you can find one going and one coming back, you can get them for£70 return. That's the cheapest Eurostars. The sale ends 10.59pm Thursday, the 12th of September. So if you're listening to the podcast a little late, I'm afraid it's already gone.
49:44But I would do it as soon as possible as the cheapest fares often sell out. The£35 fares are for travel from Tuesday the 24th of September to Wednesday the 27th of November. So if you're looking to travel on the Eurostar, go quick and you may be able to just get yourself a cheaper trip to somewhere on the continent. Mais oui, c 'est fantastique. My second tip, well, it's even simpler, really. go online to the Coca-Cola website and currently there are 350 ,000 coupons available for a free 500 milliliter bottle up to the value of£1.90 of Coca-Cola Zero Sugar, whether regular, cherry or lemon. You can then redeem it at Tesco or Co-op supermarkets.
50:30Now, I say the 350 ,000 coupons, well, there were when it launched on the 9th of September, on Monday the 9th of September, and we'll see how many are left, but it will run until either all the coupons run out, but that is a lot, 350 ,000, or Monday the 30th of September. Worth noting, as well as redeeming them in supermarkets, you can also redeem them as a glass, costing up to four pounds and four pence at participating restaurants, which includes Carluccio's and Slug and Lettuce. So you want a free bottle of Coke, get a coupon, go into a shop, get yourself a free bottle of Coke. It isn't rocket science.
51:03But I did think I would tell you something interesting on the back of this, something I find interesting anyway. And I'm doing it from memory and haven't fact-checked it. I'm just getting off the cusp. But I thought some might find it interesting. If it's wrong, I'm sorry. But hey. So the reason that you have a Coke Zero and a Pepsi Max, which are the equivalent drink, they're diet drinks, as well as a Diet Coke and a Diet Pepsi, is Diet Coke and Diet Pepsi were first introduced, I think it was the 70s or the 80s, when saccharin technology, sweetener technology was limited. And what they found is if they just replaced the sugar in Coke or Pepsi with saccharin, it was horrible.
51:41So they had to reformulate the entire drink. And Diet Coke is a totally different formula to Coca-Cola as is Diet Pepsi to Pepsi. But then in more recent times, as sweetener technology has improved, they've been able to effectively take the Coca-Cola recipe and replace the sugar with a sweetener, which is what Coke Zero is, which is what Pepsi Max is, to Pepsi. So the more modern Zero and Max drinks are diet drinks, but they have a different saccharine technology and they're much closer to the original. There you go, from a bit of a soda pop nerd. I haven't double fact-checked it, I'm 90 % sure I'm right, but hey, even if I'm wrong, just call it an interesting old wives' tale.
52:29that's it for this week if you've enjoyed it please tell your friends you've been listening to the martin lewis podcast and suggest that they do too if you've not enjoyed it i don't understand why you're still here i mean we've been doing it an hour i mean sir if you've not enjoyed it what is your problem why are you still listening you need to make some better decisions in your life including some better consumer decisions i know you could listen to the martin Lewis podcast. Bye-bye.
53:11Martin Lewis is the founder of money-saving-expert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing 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.
From the publisher
On this week’s podcast Martin gives his energy tips ahead of the energy price cap on 1 October.
Listeners TELL US about their stock of old stamps that they’re still using ahead of the 22% increase in the cost of standard first-class stamps on 7 October.
And Adrian Chiles attempts his first ever Mastermind – will he have beginners luck?