Question Time: Can I refuse a Smart meter? Should I clear my student loan? Is a stoozer a loser?

0:00Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is Question Time, in which I answer your questions about absolutely anything and everything within reason. In this week's pod, you ask me, can I say no to a smart meter? Should a mature student try to clear their student loan? Is it best to fix energy for one or two years? Is being a stoozer a loser when it comes to mortgages? and far more, including our producer asking for broadcasting tips just for themselves. Abuse of power, I say. Play the theme tune.

0:59Hello and welcome to the Question Time podcast. I am delighted to welcome podcast producer Michael to the show this week. So it is he who gets to choose what questions are being thrown at me. podcast producer Matt isn't very well, get well soon Matt but I'm delighted to have Michael sitting in for him. You're going to give me lovely, sweet, nice and easy questions that I can just breathe through this podcast aren't you Michael? Yes I am Good Right, what are we starting with? That did not sound like me at all I can try and do this I can't ventriloquist scouts Do your best scouts accent Oh no, I'm going to try but I've got edit rights yeah alright there Michael what were we doing that was very Paul McCartney-esque that was like 1960s Scouse I actually went to school in Liverpool my junior school was in Liverpool for about four years because I'm a North West boy but I've lost it now can we just get on to the money questions please Michael sorry sorry I thought you were going to say oh I went to school with John Lennon which is what I've heard a million times thank you very much I'm not John Lennon's age or Paul McCartney's age okay Martin And so first question we've got here is from June.

2:10And June says, in the past, I have always declined the offer of a smart meter, primarily because of the poor reputation. I've been contacted twice by Octopus, which is my energy provider for both gas and electric, stating that my electricity meter has passed its certification date and that by law, they are required to replace it. This is in connection with the Electricity Act 1989. I do not, under any circumstances, want a smart meter fitted. Can I legally and lawfully refuse? It appears to me that the softly, softly approach of offering smart meters has now been replaced with a more pressurized tactic.

2:43I eagerly await your response. OK, so let's tackle this in two. First of all, smart meters. Are they worth having? I am generally relatively pro smart meters. If you have a smart meter, first of all, you don't need to do meter readings anymore. The amount of energy used is automatically passed through to the energy company. It means a whole range of special tariffs are available to you. And we're going to see more of these time of use tariffs coming later where you may be offered much cheaper rates for using energy overnight. If you can shift your electricity usage overnight, it's good for charging an EV for the same reason that you're able to measure it in that way.

3:23And in future, I think one of the ways people are going to be able to save substantially is by having a smart meter and, you know, using most of the electricity and storage heaters and everything else that puts on their energy at night. So I'm not anti smart meters on principle. I also think the in-home display that most people get with a smart meter that allows you to see exactly how much energy you're using. While it can be depressing, it's also a great way to manage your energy usage. And lots of people tell me, oh, I looked at the meter. I saw it was running at 19p. I know that must have mean I left the lights on upstairs.

3:53And they can actually, they're so intuitively linked to what their display is telling them that they can work out what's on, where in the house and when it shouldn't be on. which is also useful and helps you bring down your energy usage. But I've also been campaigning about the problem with smart meters that over 20 % of them on my stats don't work. And that's why many people get annoyed about them and saying there are problems caused by them and we need to put more resources into fixing them rather than just installing them. But it is worth noting that energy firms are incentivised to install smart meters and find if they don't install enough.

4:28So you're right. Many of them do push people to get smart meters. And I've seen many letters that are sort of seem to subtly say that you have to have a smart meter without giving you any choice. But you do not. There is nothing that will require you in most circumstances to have a smart meter. And then we get to your question, June, which is that your old meter is no longer in date. And that is absolutely something that can happen. To understand expiry dates, some meeters may have a sticker on which will say the month and year it was certified, which will give you an idea of how old it is. Although there's no guarantee the sticker is correct, as sometimes the Office for Product Safety and Standards, the OPSS, extends a certified life after carrying out a service and doesn't add an update sticker.

5:17Now, I'm not going to go into all the details of the MID certification scheme. It's complicated. There is a great page on the Citizens Advice website if you want to go through and work out whether your electricity meter is no longer valid or not. In the event that your meter isn't valid and they are going to fit a new one, well, yes, they can enforce that you are going to have a smart meter. But you have a right, if you wanted to, to ask for it to be put in dumb mode, meaning it will do the same as an old school meter. So you won't be sending the meter readings in and you will still continue to provide manual meter readings.

5:54So you could ask for it to be put in done mode. Though in a view, if you're going to have a smart meter and hopefully it's going to work, why would you want it in done mode? But you may have a reason and that's your option. So no, they can't unless your meter is out of date. They can't force you to have a smart meter. But if it is out of date because they're not fitting old school meters anymore, you in many cases, you can be forced to have a smart meter. Did that all make sense, Michael? It did indeed. Thanks very much. So I'm not sure you're going to be that happy with my answer, June. But if you really want to go and check and be militant on this, go to the Citizens Advice website, have a look at the meter certification and when your meter dates information to see if your meter is actually out of date and they do have to fit a new meter.

6:36They probably do the way it's written. If they were just saying, hey, we'd love to upgrade you to a meter and here's how you do it without giving you an opt out, then it's probably just a push. But if they're saying your certificate's gone, then I suspect that's true.

6:50Right, Michael, what's next? Right, next up, Martin, we have Diane from East London on the line, and she has a question. Hello, Diane. What's your question? Hi, Martin. I just wanted to say I'm an avid fan. I've been following you for many years. You can come on whenever you like and say that every single time. Quite happy with that one. OK, so I'll just start by giving you a bit of background. I am 54 and recently widowed. Next month, I'll be graduating from a three-year degree course for which I took out a student loan for all the three years. My question is, should I consider repaying loan as soon as possible?

7:25My reasoning is that it would be a good idea to not have it hanging around when I retire, as I will most likely need as much money as I can get. I know this is contrary to what you would normally suggest, but you often refer to younger graduates. Well, OK, so let's just go through this. Where are you from in the UK? Are you an English student? Yes. And what year did you start university? It would be the Plan 2. I started in 2022. OK, so you're on a Plan 2 loan. That means you will repay 9 % of everything you earn above just over£28 ,500. And you will repay it for 30 years. But there will be interest added of inflation.

8:15So currently this year, 3.2 % up to inflation plus 3%, depending on how much you earn. So those are the basics of the Plan 2 loan. Now, the interesting thing about the Plan 2 loan is most people will not repay in full before it wipes after 30 years. In fact, I think it's around 70 % won't. So if you won't repay in full before it wipes, then unless you're going to clear it all, you don't want to make overpayments because they probably won't make any difference to how much you pay in future. So let's just go back into it. So just to establish the facts again, you're 54. So we've got about 13 years of work till you get the state pension and you should qualify for the state pension.

8:59Have you worked enough years for that? Yes. So in the next seven years of working, I will qualify for the state pension. OK, for the full state pension. All right. So we've got 13 years of work. Do you know roughly what type of income you're going to have over those years? So the profession I'm going into, I think average earning is around£35 ,000. But in addition to that, I also have rental income from the property that I rent out. OK. And roughly how much is that? So that would be around£15 ,000 a year. So let's just round it up and say you're on£50 ,000 of income, which is above the threshold.

9:39So you're£22 ,000 above the threshold. So you're going to be paying around£2 ,000 a year. So£2 ,000 a year for 13 years is almost, almost paying this off, but not including the interest. It is a very fine line. The maths is a very fine line in your case. Now, just let me ask, when you retire, you will have your state pension. So that's about 12 grand a year. You will also have, I presume, you'll still have your rental income? That's the plan, yes. That's£27 ,000 a year. Will you have any other income? Yeah, so I have a small private pension. I don't know what the income from that will be. It won't be huge.

10:20It's like a grand or two type thing a year. Yeah, something like that. So, wow, this is a very, very fine balance. Let me try and explain to everybody why I've been asking those questions. So the key is you repay nine percent of everything you earn above twenty eight and a half thousand pounds, roughly. So you're going to be repaying until you retire. But once you retire, you're going to be paying very, very little. It sounds to me like your income will be somewhere between£27 ,000 and£30 ,000, even if you earn£30 ,000 a year, based on the fact that those thresholds are probably going to rise by then anyway.

10:59I think it is unlikely you would be repaying anything other than a few quid off your student loan then. So really we have to focus on, is the amount, if we're doing this purely on the financial maths, is the amount that you will repay before you retire worth clearing the debt? and honestly you're at the cusp. It looks like if we ignore the interest you would probably repay just about the amount that you borrowed back by the time you hit state retirement and then there would be interest to pay too. So if you paid that off now then that would forestall you having any interest to pay because no interest would be added if you paid the debt off.

11:40If you didn't pay it off the advantage is if something goes wrong wrong right so this is the biggest issue if you pay that debt off now let's keep it nice and binary then you suddenly find you're not earning as much as you thought or you're going to have to take time off work for a medical issue or something else like that then you will have paid that money off but but in reality you would never have needed to pay the money anyway because your earnings were lower lower than we thought over the next 13 years or so so the risk to paying it off now is that something happens that's unexpected that means you wouldn't have to pay it in the future.

12:16The gain to paying it off now in your particular maths, and I'll be honest, I'm doing this on the back of an envelope, so you have to forgive me on that, looks to me like it won't be that great. It will just be, you know, some of the interest, but I doubt you're going to save that much because you're only on the cusp of just covering what you'd be paid before you retired. Does that make sense? Yes, it does. Yeah, OK. So, I mean, the honest answer is it's a very, very fine line. If you were going into a much lower earning profession or you didn't have that extra rental income, then I would be saying I wouldn't touch this because you're hardly going to be getting close to paying it back before you get to retirement age and your income would be lower.

13:00If you had much higher, then you'd definitely be clearing it and you'd be paying some interest so you may as well clear it now. But you seem to me to be exactly on the border. So it's a really tough one. My instinct would probably be I would be putting as much money as you can in a high interest savings account, preferably a cash ISA so it's tax free. The top ones of those at the moment pay about four and a half percent. On your earnings, interestingly, you're probably not going to be paying the full RPI plus three percent. I think you'll be paying about RPI plus one percent, which is about four percent interest.

13:34Yeah. OK. So you're going to be paying 4 % interest on your student loan and you can earn that much in a savings account. So you may as well put the money into a savings account, earn the interest that covers the interest you're being charged on your student loan. And that gives you the flexibility that you have the money ready in case something were to happen that you didn't need to pay off in future. Whereas once you voluntarily overpay a student loan, you can't get the money back. So on a safety basis, looking purely at your financial circumstances, I'd be tempted just to be saving any money I had in the highest interest rate savings I could get to try and offset the interest on the student loan, but give me the flexibility that I've got that money ready if I need in case something happens in future that maybe, you know, take two or three years out of work for a reason or your salary isn't as high as you expected.

14:19But if you get a job and it pays much more than you've just said to me, then you may want to clear it off. Yeah, OK. Do you understand my logic? That's the most important thing, Diane. It's your decision, not mine. Yeah, I understand the logic. You don't sound happy, though. And I'm interested to know why not. Be honest. Because I just feel that I would be more comfortable just not having to worry about it and not having to think about it when I retire. Because I'm going to be solely reliant on whatever income I get. But you do understand how the repayments work, don't you? Let's be really plain on this.

15:02You will only repay 9 % of your income above 28 and a half grand. Yeah. So in your retirement, it sounds to me pretty unlikely you will be earning substantially above 28 and a half grand from what you've said to me. Is that correct? Yeah, I'm imagining it would be around£30 ,000, something like that. OK, so, well, if we say that, that's 9 % of£1 ,500. That is£135 a year. OK, OK, that makes more sense. Sorry, I'm not great at maths, so it's a little bit difficult to check all of what you're saying in. I absolutely understand. That's why I wanted to check, because you didn't sound happy. So let's just remember that.

15:44You only repay if you earn above£28 ,500. You're telling me you'll be on£30 ,000 in your retirement. that's£135 a year that you will be paying. And if at that point it bothers you, well, you could pay off what you owed at the time. That's the key thing. Don't think of it like a debt. It isn't a debt. Think of it more like it's 9 % extra tax above 28 and a half grand, right? So if you don't earn above 28 and a half grand, you don't pay it. If you earn above 28 and a half grand, the more you earn over it, the more you pay. In your case, and I also suspect, because that number is meant to rise with average earnings, although some of your money might rise with average earnings as well, that the threshold may even be higher by the time you get to state pension age on Plan 2 loans.

16:28So I think the risk-averse thing to do is to have the money put aside so that you could pay off the loan whenever you wanted while we're still in the we're not quite sure what's going to happen phase. And if ever you decide you do want to pay it off, well, you've got the money sitting there in that high-interest savings account, you can just get rid of it and pay it off. Yeah, yeah, yeah. that does make a lot more sense. All right. I wish you the best with it. And congratulations on the degree. Good luck. Okay. Thank you, Martin. Cheers. Oh, that was interesting, Michael. So what have you got next?

17:01Okay. So next up, Martin, we have a question from Anne Murray. And Anne asks, I am currently with EDF Energy with a fix that ends at the end of October. I'm now looking to fix again, but I'm not sure whether to go for one or two year fix. Can you help? Oh, now that's a much more difficult question of whether I should fix or not. Should you fix or not? Yes, absolute no-brainer. If you don't fix, you'll be on the energy price cap. The energy price cap is high. It's currently predicted to drop about 1 % next January, then go up about 6 % in April and up, and then stay roughly the same after that.

17:34But those predictions only last a year. So if we were to compare the energy price cap, which is what happens when you fix ends if you don't do anything, to fixing for one year, where currently the cheapest are around 13 % cheaper than the current price cap, then if those predictions are right, and they're certainly strong until the end of the winter period anyway, it's a no-brainer you want to fix. It gets far more difficult once you start looking at longer fixes over two years for a couple of reasons. First of all, you're locked in generally with much higher early exit penalties. So if you were to lock into a two-year fix and energy prices were to get cheaper, then you're going to have to pay a lot more to get out in order to switch to a cheaper tariff.

18:16One year fixes penalties, they're around 50 quid of fuel, so 100 quid joule fuel. And also, because we have the predictions, we have a pretty good idea that they are unlikely to be better off going onto a price cap than you are right now. So this therefore comes down rather than trying to take the look. And two year fixes tend to be a little bit more expensive than one year fixes as well right now. So ultimately, I think this comes down to your attitude to certainty. If what you want is to know that you can lock in an energy bill for a decent amount of time at a relatively, and it's only at a relatively cheap rate, then a two-year fix gives you that peace of mind for longer and you will get it.

18:59And you just then forget about it and you carry on because you got it because you could afford it. If you're looking to ride the markets, then there is a chance that a one-year fix will be best for you. I tend to focus on one-year fixes because I have far more data and can say with much more certainty that getting a one-year cheap fix right now will save you money on the vast balance of probabilities. It is more difficult for me to say that over two years. So, therefore, that no longer becomes a balance of probabilities question. It becomes a question of how much do you value certainty. So if what you really want is certainty of what you're going to pay, go for the two years.

19:31If you want certainty that you're going to save, go for the one year. What have you got next for me? Well, actually, I've got a question for you next, Martin, but it's not necessarily related to your finance knowledge. Is this like one of Matt's funny money ones? I think so, yeah. I've heard about this. I've heard that Matt does offer his own questions or offers funny questions from listeners, but since I'm only here for one week only, then I thought I'd take the opportunity to ask you a question myself. So it's more related to broadcast and more so than anything else. And I've done this a few times with you in the past, and I often worry that you think I can't read because of the way I read our people, listen to questions.

20:13And I've got to tell you, it's not that, it's just that this red light, as soon as this red light comes on in front of me, I don't know what happens to my ability to speak. But yeah, so have you got any advice on how to get over stage fright, I suppose? I think it's partly stage fright and it's partly being, I mean, you have the advantage that you can edit yourself, which is good because that's what you do afterwards. But I also think the truth that people don't understand is there is an art to sounding natural on television and radio, and it is unnatural. I give a talk to the audience before I start my tele show, and it goes something like this.

20:49I say, I go, and it's worth noting, television is a louder medium than radio. When you're doing radio, the way they teach you when I went to broadcast journalism school is imagine you're just talking to one person in a room, but that you're enthused. When you do television, it's more like talking to an audience. But what I say when I'm doing television is I start by saying, now, I want to give you the secret of talking on television. The secret to talking on television is when I am at home talking to my wife, I do not talk to her like this because she would think I was crackers. I talk like any normal person does.

21:23But as you can hear when I'm talking like a normal person, when you're on radio or television, because it is a broadcast medium, it sounds incredibly flat and low and doesn't really work. So the difference between broadcasting and normal life is about 20%. You basically need to turn your talking dial up 20 % from what you would normally do. And that is what makes you sound normal, bizarrely. And then they go through this whole thing with them and say, so normally if you'd agree with me like this and I just look straight, then I would like you to agree with me like this. And I nod my head very slightly.

21:5520 % more. And if you put your hand up like this and I put my hand up to my shoulder and I ask you to put your hand up, I want you to put your hand up like this. And you put your hand up straight. So I think the first thing that you have to do, and I think it's the thing that Americans do so much better than us Brits, is when you're in the studio, even if you don't feel confidence, Michael, you need to feign the confidence. You need to get all your neurons flashing saying, I can do this. This is absolutely fine. And I've got edit control anyway, so I can always take out any of my ums and ahs and anything that I'm going to be doing.

22:25And then you go through it, but you've got to turn your dial up a little bit. and if you're struggling on the read because you're reading people's words that you haven't seen before then it's absolutely fine to take a little bit of a pause not that I often do but to take a little bit of a pause and a little bit of a moment and enunciate it through people won't mind they won't hear it we when we're broadcasting I know sometimes when I'm doing a show and I will my brain would have just forgotten the next point or something and I will feel like I pause for 17 seconds and I watch it back afterwards and it just meant Instead of taking a breath like this, yeah, I take a breath like this.

23:04Yeah. It's, you know, it's normally half a second. It's all just so much heightened sense. You're doing great, mate. I'm enjoying working with you. Do not worry. Does that help at all? It does. Let me just look. So if I normally talk here, if I start talking up here. It's less up. It's more just projecting a little bit more and a little bit more confidence and taking the odd word and giving it a bit of oomph. All I want is my mates to stop telling me that I sound like I've got a phone voice, like I'm answering the phone. So every time I'm on air, I always, I think, oh, what have people got, what are people going to say to me this week?

23:34But yeah, thanks very much. The funny thing is, when you're just talking to me naturally, then you're doing it right. That's what you've just got to remember. You've got to, you've got to factor that in. Well done, buddy. What have you got for me next? Okay, Martin. So we've got another caller on the line for you. We have Tamsin in Dover. Hello, Tamsin. How are you? Hello, Martin. Hiya, Michael. I have a question about stoozing. Hold on, hold on, hold on. I've already got producer Matt when he's here building the role. I mean, you don't need to say hello to Michael. Just me is absolutely fine.

24:04It's nice to have someone say hello as well. Come on, Al. Oh, I love it. We've got a stoozer, though. I love a stoozer. Go on, carry on. So I have a stoo spot of around£7 ,000. And in a couple of years' time, my mortgage will be due for a remortgage. And I just want to know if having a stoo spot is going to affect the rates that the mortgage lenders may be able to offer me. OK, so let's just define stoozing for all those non-stoozers out there. I almost said non-stoozers are losers, but that would be very rude, so I won't say it. For all those non-stoozers out there, stoozing is for financially sophisticated people who deliberately borrow debt at 0 % interest, usually on a credit card.

24:45They build up that 0 % debt while saving the same amount of money in as high an interest rate savings as you can get. So if you have£7 ,000 of debt at 0 % on a credit card and you have the same£7 ,000 in a bank account earning 4 % interest, then you're gaining£280 a year on the interest, on the money that the credit card company has lent you for nothing. So you're effectively making profit out of the financial system. And it's a way of sticking your thumbs up to big finance and saying, I'm a bit smarter than you. So well done, you, first of all. Thank you. Yeah, I think you're right to ask the question.

25:24My initial instinct is not really. But I think, you know, ultimately when you apply for a mortgage, they're going to do both an affordability check and a credit check. As long as your affordability is good, it should be fine. And you've certainly got enough equity in your property. And I know that I'm talking to a Stusa, so I don't need to define that. Then I think you would be fine. The credit score generally does not alter the rate that you would get. That's more the affordability check and how close you are to the brink. It can do somewhat. I mean, what it could do is if you didn't have a good affordability score and you were really pushing it to the brink, it could mean you were rejected.