Question Time: Get life insurance young, as its cheaper? Keep my bank account but get switchers’ bonus? When to STOP investing?

22:59Martin Lewis:There is a hierarchy here. You only get the Asquire badge if you're actually vocally on air. This isn't Bohemia, you know. This is a tight ship. And if you want to be one of those lucky callers, you can, of course, email us your questions, martinlewispodcast at bbc.co.uk.

23:18Martin Lewis:Oh, so that was a really interesting question from Georgia there. Nice to have a younger voice on the podcast. If any of you are listening and you are younger too and you've got a question, we'd love to have you on. This is a podcast for the ages of all ages. I think I might have over-grandised it a little bit there. So, Simon, got to be a read next. Who's our next ESQ? Yes, it is. And we've got a question in from Emily. She says, Dear Rosie, Matt and Martin. I won't say that personally, Emily. I let things slide it's been a day I just think it's I'm starting to note Rosie coming first now on occasion you know and it was a big debate between myself and Matt and the fight will continue once he comes back about who goes first I don't think any of us has foreseen Rosie going first I don't know how I feel about it the silent assassin of podcasting yeah she's over there she's got this sort of she's got a Mona Lisa smile on at the moment I'm trying it's really difficult to read how she feels about it.

24:15Martin Lewis:Now she's laughing and looking down in a slightly, coy and a little bit nervous way. But she knows she's not allowed to speak because that would ruin the shtick that Rosie never speaks. So I can't actually ask you how you feel about it, Rosie. I think she's subtly pleased. I think she's happy. So, okay, read it out. Let's go. So, well, she also follows up with big shout out to Rosie and for everyone who works behind the scenes everywhere. Hear, hear. I couldn't do the podcast without and Rosie does brilliant work. Emily has recently made it to the top of band six in the NHS Agenda for Change pay scale, which has made her very happy but feeling quite old.

24:48I bet she's really young. Go on. Her annual salary is now£48 ,117, so still comes in the basic tax rate payer bracket. But she also does quite a lot of bank work. The bank work is variable, some months earning additional£200 to£400 a month and others earning none.

25:07Martin Lewis:Now, I think in this context, I think it's probably worth pointing out that bank work in the NHS, it's a bit like overtime in slightly separate departments, I think is how you would phrase it. So she's talking about other NHS work, not working in a bank. It's also not guaranteed over the year and only ad hoc due to service needs. But the bank work combined with any interest from savings, not in an ISA cling film wrapper might just tip me into the higher tax rate. Now, can I just say, I love the little Easter egg in there of the cling film rapper what emily's doing there she's already referenced rosie now she's referenced cling film rapper and i talk about that is my explanation of isis emily is suddenly telling us i've asked this question and i am a regular listener therefore i need some respect respect given emily respect given carry on my question is how does this work if i do tip over is it like a big pot where the government keeps track of how much income goes into the pot from the 5th of april each year and when the pot is full and up to£50 ,270, anything else added into that pot goes through a 40 % tax sieve.

26:15Sorry, I'm really rubbish when it comes to money and tax and things, so analogy is hell. I like analogy. I think you're smashing it, Emily, yeah, yeah. I'm 30 this year. I told you she was young. I told you she was young. I would refuse to read the question if I'd known we're referring to 30 years old. Okay. 30 this year, so please don't tell my parents. Or do I have to do a tax return at the end of the year to add up if I owe any extra? Or will it be added to some pay slips and not others? In my whole life, I never thought I would have to think about this as a higher tax rate has always been a million miles away and other people's problems.

26:47Thank you for all you do for people like me who weren't born for the complexities and nuances of the financial and economic world. All the best, Emily.

26:55Martin Lewis:Oh, well, Emily, thank you so much for saying that. Now, the most important thing here to say, Emily, is that it's great that you're asking this question. It's far better to understand how it works than not. So there's a few different concepts we need to get in here. I mean, the big picture it seems you're asking me is, do I need to do anything? My hope is not. My hope is as you pay tax through pay as you earn, P-A-Y-E, it should all be done for you. If you're doing bank work, I would think that would be P-A-Y-E, just like your normal work is P-A-Y-E, but it may well have a different tax code, a second job tax code, so that you have to pay 20%.

27:32Martin Lewis:As long as the tax codes are right, you should be paying the right amount of tax. And actually, the people to talk to about this are the payroll department in your work. And as you work for the NHS, that should be relatively simple to do. They will have big payrolls just to check that everything's going right. I am, I have to say, delighted that we're having to talk to you about you are paying higher tax because it means you're earning more and you work for the NHS and I'm sure you're doing wonderful work and helping many people so thank you very much for that. I mean the one negative here of course is the reason more and more people are being dragged into the higher rate tax threshold is because of what's called fiscal drag and that's where even though earnings are rising and prices are rising because of inflation the tax thresholds are frozen which means each year more and more people will pay more tax than they would have done otherwise because the tax thresholds aren't rising.

28:26Martin Lewis:And that's drawing more people into it. Now, the one big thing that we do need to be careful of, and everyone who is an employee needs to be careful of, is is your tax code correct? Or in your case, are your tax codes correct? You'll get a tax code. It'll normally be four numbers and a letter. So the standard one is 1257L. What that means is add a zero to the number. So 1257 becomes 12 ,570. And that is telling you what your tax-free personal allowance is, the amount you can earn before tax. So if it was 1257L, it would be that. It can change and vary depending on what employment perks that you get.

29:03Martin Lewis:The L, the number, the letter rather, is far more complicated. L is the simple one. But there are tax code calculators online that can decipher your tax code for you and then hopefully help you work out whether you're roughly in the right tax code or not. And that is worth checking, especially if you've got a second job. That's where the mistakes can happen. So go and make a friend in the payroll department and talk to them about it so they can work it out for you. Now, if everything is working right and you're on PAYE, your tax should automatically be taken at the right rate. And if you slip into the higher tax band, then it'll be 40 % taken of anything above that.

29:38Martin Lewis:It's, of course, important for me to say, I'm sure you know this, most people know this, but not everyone. Tax in the UK on income tax is marginal. So that means you only pay the higher rate on the amount above the threshold. To be really practical, if the threshold is£50 ,270 and you earn£50 ,300, you only pay the 40 % on the£30 above, not on the rest below. That stays at the other rates. If you are going to be going into the higher rate tax threshold, well, there are a couple of things that might be advantageous to you. You could increase your pension by that amount because you get that 40 % tax release as you're paying higher tax.

30:14Martin Lewis:You actually, because pensions come from pre-tax income, you'll get 40 % tax relief on it. So you might want to increase your pension contribution because it means that instead of it costing you 80p per pound you get in your pension, it costs you 60p per pound you get in your pension. Now, the reason you may not want to be a higher rate taxpayer apart from the paying more tax is crucially because if you become a higher rate taxpayer, your personal savings allowance drops. There's a cliff edge here. You earn one penny into the higher rate tax band. And instead of being able to earn£1 ,000 of interest a year tax-free, you're now only able to earn£500 of interest a year tax-free in all forms of savings.

30:52Martin Lewis:Cash ice or interest doesn't count to this. So you actually lose quite a nice chunk of your ability to earn interest tax-free. Now, if you're not earning interest on savings, it doesn't really make much difference to you at the moment anyway, but it might do in future. But certainly, if you're only dripping a tiny bit into the higher rate tax threshold, then you could utilise increasing your pension contributions, for example, to reduce your salary so that you're no longer a higher rate taxpayer. And that would mean you'd keep the£1 ,000 a year of interest that you can get tax-free from savings.

31:22Martin Lewis:So there are lots of things to think about. I mean, if the system works right, it should all be fine for you, is the basic summary. There is always a chance when you go to the higher rate tax threshold that the revenue sends you a self-assessment form. The rule is pretty simple. if they tell you you need to fill in the self-assessment form, you need to fill in the self-assessment form. The rest of your affairs seem pretty simple, so hopefully that won't happen. But if it does happen, shrug your shoulders, swear a bit and get on with it. And I think that's probably where I'll end.

31:52Martin Lewis:Are you sitting there thinking, oh, I know what I wanted to ask him? Well, this is your opportunity. If you've got a question, then just send them in to martinlewispodcast at bbc.co.uk. and please do start them Dear Martin. No, Dear Matt. Dear Martin. Or Simon. Maybe Simon.

32:14So next up, we've got another caller and we are continuing our efforts to get around the country on this week's pod. So we have John in Paisley who is on the line. Lovely. Coming from Scotland.

32:25Martin Lewis:Hello, John. How are you? Hello, Martin. How are you today? I'm good. Thank you very much. Lovely to hear from you. What is your question? So my question, I know you covered this topic recently, Martin, but it was just to clarify a point that I was thinking about that I was wanting to answer for myself. It's a question on investing. And I've very recently started investing£50 a month in a money box stocks and shares ISA. Am I allowed to say that? Yeah, that's fine. It's true. Yeah. And I'm just doing a£50 payday transfer to a money box stocks and shares either. My question is... So Moneybox is one of those, it's a bit sort of robo-investing or you pick your level of risk and it does it for you.

33:12Martin Lewis:So you're not making the investment decisions yourself. How risky did you go? So see, because this is money that I'm just dabbling with, Martin, and I don't really need the money. It's kind of dipping my toe in the water. I've gone for the adventurous, their kind of adventurous portfolio, which I can't remember the three things. I know that one of them is Fidelity Global Shares, and I can't remember what the other two are. Okay. But it means if it's adventurous, it'll be a share-based and equity-based type portfolio that's giving you a broad spread and access to markets, and that you're hoping, you know, everybody knows my investment rule.

33:48Martin Lewis:If it's money that you don't need and you're putting it away for more than five years, savings is the poor relation to investing, so you should consider investing. And it's great that you're dabbling your toke. I don't think you can dabble your toe, dipping your toe in the water. Yes. So where are we? So just on that point, Martin, just to kind of reassure you, I pay money into savings as well. And I've also got a workplace pension that I've been paying into for 21 years as well. So back to the question. The question was, I was planning on accessing this money when I'm 60 and I'm 47 at the moment.

34:23Now, I've heard you say in the past that any money that you invest, you should be prepared to put it away for five years. In that case, should I stop investing into that account when I'm 55 to allow that money more time to grow? Or is it okay to pay into an investment account like this up until the time that you want to access the funds?

34:46Martin Lewis:A really interesting question. Let me just sort of decode why I say what I say, and then we can use how we apply it to your circumstances. The reason for saying five years is because markets move up and down. That's literally the point of them. They're volatile. You know, they will go up, they will go down, they will go up, they'll go down. What you're more interested in over five years is the long term trend rather than it was higher two weeks ago than it is right now. Because that is just the nature of how markets move. And you might find there's a time where they dip quite substantially or they drop substantially.

35:20Martin Lewis:And then everybody goes, oh, no, I've lost a fortune. Well, you've only lost a fortune if you sell at that point. if it's just a fluctuation in the market, it may well come back. And we've seen that recently. The reason we talk about a long period is to ride out the short term. And also what you don't want is you don't ever want to be in a position where you need the money today and today is a bad day to take your money out. Right. So that's the philosophy. Now, it sounds to me, first of all, you've said to me this is money you don't need. Yeah. Great. Yeah. So you taking it out at the age of 60, I'm guessing, is a soft 60, not a hard 60.

35:54Martin Lewis:Is that fair? That's an arbitrary length of time, yeah. Exactly. That would coincide with my planned retiree date, and you're maybe wanting to, you know, go on a nice holiday or do something that you wouldn't normally do when you retire. So it's a soft year, yeah. Yeah. Well, in that case, you know, first of all, you might not use the money. Now, I say five years, which is relatively conservative. There are many investment specialists who would say three years. And it's just worth you being aware of that. The reason I go for five years is because my audience is generally beginners investors. And so I go for a more cautious approach.

36:35Martin Lewis:People who have a bit more experience, they tend to be thinking three years, they can see the patterns and ride it out and know what they're doing a little bit more on that basis. Now, it's also worth noting you've gone for an adventurous portfolio. If you're going to want to access this money and it isn't crucial to you, you could shift to a less adventurous portfolio once you're getting closer to that 60. You could start to go to a cautious portfolio, which will probably be more in bonds and in shares and giving you less growth, but hopefully less risk of losing the money, which is what we're talking about.

37:07Martin Lewis:So all of those, I think I don't think there is any blanket moratorium on you continuing to invest near the age of 60. I mean, and certainly the age of 60 itself is not relevant. You're still relatively young. It is about the fact that you're going to want to take the money out. You're going to want to cash in at that point. which is what makes it relevant that you being 60. So, I mean, you could certainly, especially if you're going more cautiously and you're only talking about money that you're dabbling with, you could push it up to 57, 58. Or if you might also think, and this is worth thinking about, you might also think, well, I've still got the money.

37:41Martin Lewis:I'm going to want to take sun out when I'm 60, but I might not take it all out when I'm 60. I want to keep putting some more in at that point for it to grow and me to use later and to keep the pot growing. So I see it as a soft guidance concept rather than a hard rule. Does that make sense? Yeah, that makes perfect sense, Simon. And what you said about moving the money to a less risky portfolio, a less adventurous portfolio, would that move all the money that was in that fund or would it just move subsequent additions to that fund that you make from when you move it? That would be your choice.

38:17Right, yeah.

38:19Martin Lewis:You would be able to easily... I think right now you're able, I would presume, you can say what percentage of your fund you want in each level of portfolio. Yeah. So you would be out and, you know, we're talking functionality on all of these things will be far more in another five, six, seven, eight years with AI. I think you'll have a lot more flexibility. Therefore, the choices you could decide, again, in your head, I'm taking all this out in three years. And you've got a nice pot in there that hopefully, and of course there are no guarantees with investing, hopefully has grown very well and done you very well.

38:47Martin Lewis:And you might be sitting there going, you know what? I'm happy with what I've got. I don't want it to go down anymore. I'm going to get much more cautious at this point, just in case, so that something doesn't happen in the next few years before I retire, that gets rid of my nice dreams of going and having a wonderful thing and I have to curtail my spending on the back of it. That's a perfectly reasonable thing to do when you're getting into the period before withdrawal to decide, I want to be more cautious. So all of it is fine. There are no hard rules here. I think it's also worth me saying, I think if I'm talking to John aged 55, who has been doing this for eight years, I think you will.

39:27Martin Lewis:I know you've only just started. I think you will be a lot more educated about the situation then and sort of more confident in making your own decisions at that point, which is why it's great that you've started. You know, you're doing this dabbling. Some of this is learning money. You should perceive it as learning money, if that makes sense. There's so much. I mean, even the platforms that you use for investing on, they've usually got a little segment or a tab that you click on and it's kind of learn. And it's got various articles on investing and for you to look at and kind of educate yourself about it.

40:02Martin Lewis:You know, one of the learnings will be at some point between now and when you're 55, I'm pretty sure there will be a day or two where the markets really go down hard. right and you're and then you'll go oh sugar right or was this all the right thing to do and that's going to happen because that's what investing is about you know and it is about that there is a roller coaster but we hope when it comes to the investing roller coaster unlike a physical roller coaster the aim is that eventually you get off at a higher point than you started on but there might have been a lot of ups and downs on the way yeah yeah all right that's lovely john thank you so much for calling.

40:35Martin Lewis:I hope I've helped. Thanks a lot. That was getting a lot to think about but what you've said makes perfect sense and delighted to be on the show. Always lovely to have you. And there's a badge coming as well. The biggest profit of the investing after all. I mean, who cares if the money goes up 10, 20 grand? Getting a badge. I mean, that's what counts. The badge alone is worth it. That's right. And my genius often gets overlooked on this podcast, John. There was a lovely moment when you were giving your answers and you referred to me as the expert instead of Martin. I heard that too, but I decided not to correct.

41:07Martin Lewis:No, good on you, John. Yeah, well, let's keep that in, Simon, shall we? You can be on every week, John. We'll keep that in, and what'll happen, I tell you, the little, is lots of people will have spotted that, and they'll be going, he just said Simon, not Martin, and they'll spot that, and then they'll get to the end and go, oh, they noticed as well. So I'll be very nice. Thanks, John. It was lovely, buddy. Great, listen, thanks a lot. My pleasure, mate.

41:32Martin Lewis:Right, Simon, so it is that point of the podcast where people get to ask me, well, we call it a funny, but I'm going to say it's an askance question, a different question, and not falling onto the normal railway tracks of what we do in the podcast question. And by the way, if you have one of these, if you've got a question for me, whether it's on the normal money-saving stuff, or you want to go a little bit wee and a little bit woe and a little bit woo, then just get in touch with martinlewispodcast at bbc.co.uk. So, having done a build-up, I presume you have something? Yes. Other producers would have this as a read, but we're going to have it as a voice note instead.

42:05Martin Lewis:So subtext, everybody listening. Matt normally does a caller and a voice note or two callers in a programme. Simon is going here going, I've got two callers and a voice note. There's a little bit of producer top trumps going on. Well, Jeremy has got in touch and he knows his rights. Dear Martin and Simon, I wonder if I can ask for your advice on something. I'd like to ask if I've got a claim via Section 75. You see, I'm a previous caller to the podcast back in December 2025, when I told you of my success in saving money by ditching O2 and moving mobile contracts. I was wondering, though, in light of the recent announcements about titles and badges, if I have a claim to a badge via this route at all, I am willing to try chargeback too if you think this would work.

42:53I've also sought out the ombudsman for this sort of thing. but my searches have come a bit short. Thank you for providing such a superb niche nerdy corner for all things financial and the opportunities to hear how podcasts are constructed. I realise there wasn't any actual financial transaction here and I'm simply trying my luck but thank you.

43:13Martin Lewis:Oh I like that Jeremy. Now this is actually fascinating because you've heard of a self-fulfilling prophecy. That is a self-fulfilling complaint. You see I can say very strictly that because he was on the show before we introduced badges for callers and voice notes, he absolutely is not entitled to a badge. We are not doing this retrospectively. There is no Section 75 because there's no credit card involved and there's no chargeback because there was no plastic involved. And the financial ombudsman does not regulate podcasts. You would have to go to Ofcom, but I'm telling you, I don't think there would be an Ofcom complaint.

43:51Martin Lewis:Having said that though, the fact that your voice note complaint has been read out, your voice has therefore been on the pod subsequent to us putting in the rule that all callers and voice notes get a badge and therefore your complaint qualifies you for a badge due to your complaint about not getting a badge for your first call. So the net result is you do get a badge. Congratulations, well done. When the badges are finally made, you will be on the list. So well done, Jeremy, for that. I did enjoy that. And Simon, that puts a little bit of just emphasis on you because you're now, as your PPS, you have to do the very final and finally on the show, the PPS.

44:34Martin Lewis:Do you have one? I've got one. Please stay listening. Let's be honest. We're just indulging ourselves now. We're at the end of the Question Time podcast. We've done the meat. You've had your questions answered. This is for us. We'd love you to stay here and join with us, but if you want to leave right now, you can but it's simon's pps what's your pps pps so last time i was on with you my pps was a question from england fast bowler mark wood yeah we've now got a question from the world's strongest man eddie hall hey martin it's eddie hall the world's strongest man what is the heaviest thing you have ever lifted in your life the weight of a nation's finances on my shoulders

45:20Martin Lewis:sorry I couldn't resist it does feel like that sometimes oh that's good what a deep voice I feel I can't do the deep voice the heaviest thing I've ever lifted well that I know the weight of it was I set myself a bench press challenge to get to 100 kilogram single bench press and I did it It was about a year and a half ago and I got to 100kg single bench press, which I'm very, very happy with. People who listen a lot will know, I've been on a press-up challenge this year to do 25 ,000 press-ups in a year, but I'm afraid I've actually had to recently cancel that because I've done my shouldering.

45:54Martin Lewis:So I'm going to stick with my past glory of my 100kg bench press, which I don't think was that bad for a man in his 50s. Have I lifted anything else really heavy? Hmm. No, I can't think. Oh, and Eddie, thank you so much for the question. I love that. Loved it. What about you, Simon? Well, you know, you lift my spirits every week. Oh, you sweetie. I'm going to stop. Let's just stop. Podcast is over.

46:21Martin Lewis:That's it for this week. Don't forget to subscribe so you know when we release a new episode. We put out question time each Monday alongside the Big Topic podcast with Adrian on Thursdays. Aren't you lucky? Two doses of money-saving tips and tricks a week. do make sure you send in your questions to martinlewispodcast at bbc.co.uk. And don't forget, as if you could, having listened to this show, where it's basically been the theme running throughout, if you come on the show, we'll send you an exclusive Martin Lewis Podcast Question Time badge. Woo! Who wouldn't want that?

47:04I got to feed, so I'm going to make sure 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.

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