Question Time: Is saving 15% of my salary into my pension enough? How long do I keep financial docs? ISA rules when I die?

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1:42Martin Lewis:It's so brilliant that you've listened and you've been thinking about your pension at such a young age. Actually, that's£700 we added on. We haven't actually cleared that. There is nothing worse than a tax investigation. You can effectively increase your ISA allowance. It's on top of your normal ISA allowance that you can put those new assets in. Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our question time episode where you are Esquire's extremely savvy questioners. Get to ask me your questions on absolutely anything and everything, open brackets within reason, close brackets.

2:16This week you asked me, I'm 23 and saving 15 % of my salary into my pension. Is that enough? I'm starting to see my credit card debt grow. What should I do? How long do I keep financial documents for? What happens to an ISA when you die? And a success. My daughter's Cher Junior ISA is up 24%. Play the theme tune.

2:54Martin Lewis:Hello and welcome to our question time edition of the podcast. Yes, the one where you can ask be questions on anything and everything, open brackets, within reason, close brackets, and you know who's here. It's the curator of questions himself. Professor, Lord, Sir, Matthew Burnham, Esquire, PhD. I've changed it up. So many changes. I've added in a Lord. I like Lord. You know, I think I would take it if I was offered. I think I would take it. Lord Burnham. You moved your PhD to the back rather than having the doctor in the front. I don't know what you thought of that. I think I prefer doctor to PhD.

3:34I know it's the same thing, but... You're very picky. I am very picky. I love these titles.

3:38Martin Lewis:To first-time listeners, these are all legitimate titles that Matt has within the canon of the podcast. But earned titles still. Potentially earned titles. Potentially. And actually, when I called you on Friday to discuss the Last Question Time podcast, and I, as I called you in our just private phone call, referred to you by those titles. You did. You then referred to me as Mr. Martin Lewis and I actually have a CBE. Yes, you corrected me. And you didn't even put that in my title and I'd just given you all of those honorifics. But no, you don't use it, so... No, I don't. I just feel... I don't know.

4:19It's interesting. I'm incredibly proud to have the honor of a CBE, but I do sort of feel that to put it after your name is just a bit too showy-offy. I think it's something very British about not putting it after your name. Do you know what I mean? It comes on official letters to me are often addressed CBE or if someone's formally inviting me to something. But I feel like putting it in your social media profile or something like that is just a little bit... What about your email signature?

4:45Martin Lewis:Is it in that? Hold on. No, it isn't in my email signature. It isn't in my email signature. I don't know. It just feels a little bit like, no, no, no, no, no. No, you've earned it. Yeah, I have. I have. But I will. Sometimes it's better. There are certain things that you don't call yourself. And I think it's better for other people to call you. It's interesting because people often say, oh, you're so cool. You call yourself a consumer champion. I've never called myself a consumer champion. Other people have called me consumer champion. It is not a term I think I can self imbue. So, and I think even though I do have the CBI, anyway, we're talking about them because there's big news today, everybody.

5:25The big news is Rosie. For those who don't know, Rosie works with me. She is my live on air fact checker and brilliant, super clever researcher. She's always a part of the pod, but she never speaks. She is a woman of mystery who many of you wonder what the real Rosie is like. Now, Rosie, there was a staff party in Manchester yesterday. Rosie went up to Manchester and she's actually in the studio with you, Matt,

5:53Martin Lewis:not with me. Yes, she is. She sat opposite me. So this is quite difficult because normally I ask Rosie things and then I reply for her based on the looks that she gives me back. You're going to have to be the voice of Rosie today. Okay, so I'll do my first one. I looked at her while you were introducing her and she smiled in a way of saying, oh, Martin, shut up. Oh, it wasn't. I thought it would be the Mona Lisa smile. I often get the Mona Lisa smile. It's sort of a smile, but I'm not sure if she's slightly going, I'm cringing, but okay. It's definitely that. All right. First question. First question.

6:30Martin Lewis:Stop in there. What are we doing? We're doing first question. What's the first question? I don't know. Oh, Isaac. Yes. Okay. You know the first, you're the curator of questions. Don't ask me what the first question is. It's your job. Right. Isaac has emailed us in. Cringe. I'm not cringing. You called yourself cringy No I said I wasn't sure if Rosie's look was saying I was cringy I didn't say I was cringy Anyway let's do the question Isaac's emailed this one in to martinlewispodcast at bbc.co.uk He just says dear Martin Which I don't know if I'm happy with or not I think after our earlier bantery interchange I like it Is it because I've been off for so long?

7:07Martin Lewis:You've been off for six weeks You're not going to get the dear Martin and Matt's When you decide to go gallivanting around Anyway he says I've got a question about pension savings. I'm aware of the general rule of thumb that to maintain a similar standard of living in retirement, you should contribute roughly half your age as a percentage of your salary into your pension from when you start working. Well, that's brilliant. That is my rough rule of thumb. Yeah, you take your age. So if you start your pension at 30, half it, 15 % of your total income of your salary should be going into a pension to give you a decent income at retirement.

7:40It is not a hard and fast rule. Many people do not do it. But it is a nice intuitive rule that helps and also makes the point very strongly. Start at 20, it's 10%. Start at 30, it's 15%. Start at 40, it's 20%. The earlier you start, the better. Do carry on. He goes, I'm currently 23 and I've just started my first job after university. I'm contributing 9 % of my salary into my pension and my employer is also contributing 6%. So in total, 15 % is going in. Is that good? Very good. Brilliant. Well done you. He says,

8:42Martin Lewis:and the pension. The reason it's beneficial is you'll have it in an investment, but you effectively have that investment can compound over so many years. And I'm making this number up now. I used to have an actual figure, but I'm going to sort of make it up so see if a conceptual, not a numerical idea. But for every pound you put in in your early 20s, you're going to have to put in 30 quid in your 50s to get the same result. So it's so worthwhile doing it early when you've got disposable income. Maybe you're living at home. I don't know. Now, the general rule of thumb is about the total going in.

9:12Martin Lewis:So it includes your employer contribution. So you are over the rule of thumb. That is not me saying not to. It's brilliant to get a head start, especially at this age. If you do not need that money, don't lower your contributions. And why I find our pension rules so frustrating, I am a supporter of pension auto-enrolment. Just to say here, we're talking private pensions here. Workplace pensions are a private pension. Generally, you're building up the money purchase pensions or defined contributions. You're building up a pot of money. You're putting money in. It's being invested and you'll have that when you retire and you can take it out currently age 55.

9:48The rule is changing to age 57. Probably when Isaac retires, it'll be somewhere around age 60. And if you put money in your workplace pension, your employer has to contribute. The minimum figures are you put 5 % in, they put 3 % in. I'm glad to see it's higher in this particular case. Here's my problem, Matt.

10:06Martin Lewis:Go on. The rules say auto-enrolment only starts once you're aged 22 and earning£10 ,000. If you earn£6 ,240, you can ask to be in your firm's pension scheme and it can't refuse and it must contribute too. And you can do that when you're 18, 19, 20, 21. Why don't we just make it automatic if you're earning£10 ,000 at 18 that it goes into your pension? Because it means people are starting even earlier. And often at that age, funnily enough, they do have disposable income because many people are living at home and it will be tougher later on when they have many more costs to put money away in their pensions.

10:47Martin Lewis:And the law actually changed. So this is really complex now. The law changed a couple of years ago, giving the government the ability to change the rules so that auto enrolment started at a younger age. But they have never enacted that. And I think it's a shame. I think far more people should be more like Isaac. Well done, Isaac. Hopefully, this will bear huge fruit. And if you really want to get complicated, grandparents, there's actually a rule that says you can contribute£3 ,600 to a pension even for a non-taxpayer, or the non-taxpayer can do it themselves, and they still get relief. So you can put£2 ,880 a year in a pension.

11:28Martin Lewis:The pension company, the relief will come in in a private pension. That'll mean they actually have £3 ,600 saved on the back of putting£2 ,880 in. And you can do that for a child. You can do it for a baby. Of course, not only grandparents can do it. Parents can do it. Aunties and uncles can do it. But it's often a great way for grandparents to put money away for their grandchildren and be remembered once they're aged 60 and get their pension. You go, my grandpa, my grandma started this off. It's quite nice. Right, Matt, it's an even number. It's a caller. Who've you got for me? It's a caller. Chris in Chelmsford is here.

12:04Hi, Chris. Hi, are you OK? Hi, Chris. Hiya. Welcome on board. What can we do for you? Well, I suppose it's... And I hope it's not just for a badge. No, not at all. Not at all. My email definitely didn't say that. Isn't there a mention somewhere in your email about a badge or a Squire? No, maybe I imagine. Might have signed off with a Squire to be, maybe. Well, you are already in this squad and you are going to get a badge, which is very exciting. And just for anyone listening who doesn't know, if your voice is in this podcast, either on a voice record message or a caller, you get one of our special new exclusive ESQ badges with a picture of my face saying that you're an extremely savvy questioner.

12:46And in one of the full stops, I've learnt, I haven't seen it yet. There is a tiny picture of Matt too. What more could anyone want? probably your question answered so let's do that okay so i suppose it's kind of three questions if in one if that's okay greedy well let's do it while i've got you uh so currently um i've got a credit card that i generally use for work expenses but over the last sort of year or so i've kind of spent outside of that and ended up with about 700 pound on it um i'm trying to clear it in full every month. Well done. But that's not always easy. So it's starting to build up a little bit of interest.

13:29So suppose my kind of question is what to kind of do with that. So me and my wife, when we got married, we added all our credit cards to one balance transfer card, which has got about 24 months left on 0%, which we are more than comfortable in paying.

13:47Martin Lewis:And will you clear that before the 24 months ends? Not on how we're paying it now, but we could if we probably wanted to. And you've got a pretty decent credit score. So if you needed to, you could either clear it or you could shift it again at the end of that balance transfer period onto another 0 % card. Yeah. OK, so in my head, I'm not worried about that. I don't want you building up debt, but it's at 0%, which is as good as it gets. OK. Excellent. so yeah suppose my question is kind of what to do with that one so we've got a as i said we've got another card that has that 0 % on it um my view or my preference preference would be to take out a 0 % card in in my name and then transfer this excess balance to that and then it's comfortable for me to pay off in sort of 24 months we could pay it off from savings but i'm a little bit cautious and don't necessarily want to do that i'll kind of want it for saved for a rainy day another thing we thought about is on our other card we were sent sort of an offer to transfer another 0 % for 12 months but my worry with that is is from what I've kind of read is I don't really know how those payments work so if we put it on that card and we were paying the same amount off for a little bit more each month how do they split that payment you know Would it just pay off the original balance first?

15:12And then at the end of that 12-month offer, we might have paid off more off the original balance. But actually, that, let's say,£700 is still there.

15:20Martin Lewis:So you've already got debt on that card, have you? Yes, that's the one we've got the 0 % on. OK, fine. And then they've offered us a promotion to add on an additional 0 % balance transfer, which is one of the options we're looking at. But I don't know how they do the payment. I don't want to kind of get to the end of those 12 months and go, actually, that's£790 we added on. We actually haven't cleared that. And we're now adding paying interest on that, even though the other card or the original balance still has a 0 % on it for a couple of months. OK, so let's try and break this down a little bit.

15:53Martin Lewis:First of all, can I ask, do you know why the in-full rule is the in-full rule? Because it's irrelevant on what the, essentially, it's what the balance is on there that you pay the interest on. So even if there's a pound on there, you pay the interest essentially for the whole amount that was on there for the month. Is that correct? It's exactly correct. If you had£1 ,000 on it and you paid£999 and 99p off, you would still pay interest on the entire£1 ,000. If you paid£1 ,000 off, you don't pay any interest. So that's the reason it's such good. So you've got that. So I'm going to answer technically.

16:30There's a little bit of me that feels I need to give a bit of a vuncular, for those who don't know, that means uncle-like caution, if you don't mind. Yep. You've got savings and you're building up this debt. And while the debt, you're managing it the right way because you're moving it to 0 % and you're utilising the credit that you've got to do so, there's a little bit of concern here that you are flippantly building up a bigger debt balance than you need. Okay. And I just think it's worth me saying before I answer, I'd like you to be a bit more cautious. You know, ultimately, debt is debt and it has to be repaid.

17:11The fact there's no interest on it, yes. I mean, you can stews where you're deliberately building up artificial debt in order to make money from keeping it in a savings account. And that's a good, clever thing to do. And yes, you've got the money in the savings. So you're going to me, I don't want to use my savings because I want those for a rainy day and all my debt is at zero percent. Therefore, actually, I'm up in doing it that way, which is good conceptually. But you're actually spending more than you earn and building up debt from that. And I don't like that for you, if that's fair. Yeah, I think that that's probably my wife's concern with getting another card.

17:51Martin Lewis:Well, I think what we have to do is we have to deal with the situation that you are in. but I do think that you should probably see this as a bit of a warning sign and I would say from this moment on you do not need to build up any more debt now and I would probably I mean if your credit score allows it I'd probably have a separate card for work expenses a reward card because hopefully they're going to pay you on time and therefore you can separate that out from your own spending and in your own spending you should be paying off in full each month right and you shouldn't be building up and running up a bigger debt.

18:27Martin Lewis:And I say this with love in the right way, I'm not telling you off, but I think just listening to this, it's setting off not loud alarm bells, but a tiny little bit of ringing, a tiny little bit of ringing. That's my aim is to get it so it's all clear, essentially start afresh. We know where we're at. Well, so on that basis, well then, yes, absolutely. I would go quite simply and get yourself. As long as you've done, you go and do an eligibility check and it's saying that you can get a new card, I will get yourself a new card. You can even go, right now there's 13 months, 0 % fee free available.

19:05Martin Lewis:And if it's a small amount, you might be able to clear it within that period because you know that when you do a balance transfer, that's a balance transfer for those who don't know is when you get a new card that pays off debts on existing cards for you. So you owe the new card, but at a better interest rate, hopefully a 0 % and interest free interest rate, you normally pay a fee up to 3 % 4 % of the amount you're transferring. But right now there are cards available where you can transfer for up to 13 months with no fee. So then there's absolutely no cost. So perhaps as a discipline thing, if you were looking to get a 0 % card anyway, you've got your 24 months that you're paying off.

19:40You could get yourself a shorter card just for this 700 quid, which has no fee. So there's absolutely no cost of doing it. And you can clear that. And then I would suggest, you know, the danger of credit cards, they're very cheap when they're 0%. The danger of them is they are an open-ended borrowing facility. And I always say borrowing is for a one-off planned deliberate purchase where you've budgeted the repayments. Borrowing willy-nilly because you have a few months where you spend more than you need is a danger sign. So I don't think you're in any danger. I'm not saying your finances are a big problem.

20:13I think there is a danger of getting into bad habits here. But that's roughly where I'd go. Are you happy with what I've said? I I haven't been rude or offended you. No, no, no, no, no. Makes perfect sense. And I think your sort of hesitancy and caution there is exactly the same as my wife's with the situation. So I completely get that. Sometimes the right thing to do is listen to your wife. We won't tell her. Oh, she'll probably listen to us. Yeah. All right. It sounds like you're doing well. I think it's a good conversation. And actually asking the question when you're in your position is important because hopefully it just firms everything up.

20:46a little bit tighter budgeting, get these cards paid off, listen to your wife, and it should all be fine. Excellent. All right. I appreciate that, Martin. Thank you. And you're getting a badge. What more could you want, Chris? What more could you want? That's it. What a day with the sun shining and now I get a badge. Chris Hayden Esquire, thank you. Thank you very much. Cheers, mate.

21:05Martin Lewis:Cheers, Chris. Bye-bye. 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. Dear Matt. OK, Matt, it's a read. It's question number three. Question three is from Susan or Suzanne. How would you pronounce it? Suzanne, Susan? It depends. It could be both. I'm going to say... And do you know what? You were quite rude about my pronunciation off-air a moment ago because I was saying when my brain was elsewhere, okay, I said opaque as opposed to opaque.

21:46And you and Lady Rosie were both, Lady Rosie was doing it far more kindly than you, was slightly making fun of me, and there were ageist remarks going on. So now you want my help to know how to say Suzanne or Susan. I'm not giving it. That's fair enough. Hoist your own petard, young man. That's fair enough. I'm going to say Suzanne because there's a Z. So Suzanne has emailed in, martinhospodcast.bbc.co.uk. Hello, Martin and Matt. The correct way. Hello, Susan or Suzanne. She says, I enjoy listening to your podcasts. Could you answer the following? I'm trying to streamline my filing by keeping online records.

22:24Which documents should you keep original paper copies of?

22:29Martin Lewis:What an interesting question. The conventional wisdom is you only need to keep bank, credit card and other personal finance documents for six years. Because HMRC, the tax office, is said to only be able to ask you to go back that far. Now, actually, HMRC only requires most tax records to be kept for people doing self-assessment for 22 months after the end of the tax year. Limited companies generally must keep accounting records for at least six years. But I would probably go for the six-year rule anyway for safety, just in case you have a tax investigation, because there is nothing worse than a tax investigation.

23:05Martin Lewis:They have huge powers. It can be very distressing. What was that£52 you got from that? I don't even know who the company was. You know, so you just want to keep those records. Beyond that, I have a very different take to other people. And I am going to read you something now because I was hastily finding it while you were asking me. From a blog I wrote back in 2013. Were you still in school, Matt? Yes, I had just started my sixth, so A-levels. I'd just started A-levels. So you were too young to have even read this blog at the time. Yeah, I don't think I knew who you were then. You probably wouldn't have done that.