Question Time: Keep saving hard, or spend more on my family? £30,000 stoozing success! Top up missing NI years?

24:48Martin Lewis:Now, the rule is, if you withdraw money, so of course, you can leave this here until you're 60, But if you withdraw the money, then you pay a 25 % penalty. Now, the reason I phrase the 25 % penalty as a 6.25 % penalty is this, because that's a 6.25 % effective penalty on what you've put in. So if you put in£10 ,000, you get 25 % added on top of that, which is£12 ,500. But you then get 25 % taken off that. And as we're now taking 25 % off a bigger number, 25 % off,£12 ,500 is a bigger amount than 25 % on£10 ,000. And that's actually where the 6.75 % penalty comes in because you would effectively withdraw£9 ,375.

25:40Martin Lewis:So you put£10 ,000 in, you get£9 ,375 out because the bonus is added on, then the penalty's taken off. That's why I call it an effective 6.25 % penalty. Now, the reason I'm explaining this is because in Harry's specific example, he's put£4 ,000 in for this year. I'm sure he's got money in from previous years and got bonus in for previous years. All of that will go to his housing deposit. But if the bonus on the£4 ,000 is added afterwards and he wants to withdraw it, he would lose 25%. So he would take out£750. pounds. Now, while that is not a situation that Harry wants, quite understandably, it is worth thinking if you are in the position where you need that money and you've got your own pension savings elsewhere and you really want it for your new house, it's not like you're paying the penalty on the entire amount.

26:29Martin Lewis:And at least it's only the penalty on the bonus. It's not the penalty on the money that you put in. You're just paying the penalty on the bonus. So 750 is still better than nothing. You're at least going to get some form of bonus on the back of it. That's me trying to put a silver lining to the cloud. So most important, let's just hope they pay you quickly enough for you to be able to use it. I mean, what you could certainly do is you could ask them, do you know when you're going to pay this bonus? I mean, you always have the call, is it possible to speed it up? I've never heard of it being done, but this is the first time I've had this question.

27:00Martin Lewis:So you may be able to do it and do let me know if you can. But even if they just tell you the day the bonus is going to go in, you might be able to utilise that and to move your exchange date as long as you're not losing the house that you're going for. I wish you good luck on it, Harry. That was going to be my question. Could you just move the date that you complete? Well, you could move the date, but of course, I don't know, and I don't say this in a pejorative way. Have you ever bought a house, Matt? No, no. Okay, so the point when you buy a house, it is always a negotiation between the buyer and the seller.

27:30Martin Lewis:And the seller will obviously want you to exchange and get it locked in sooner. And if you don't exchange they might there's always the chance that they'll sell it to somebody else and not sell it to you and someone else will come in and gazump you so it's never moving the date is is quite a big thing i see if you want if you've got if this is the house that you really want to buy and you want to lock it in then you're not going to want to move the date because there's a that increases the risk that you might not get it so uh that's why that's why it's quite difficult on that one are you sitting there thinking oh i know what i wanted to ask him well this is your opportunity.

28:02Martin Lewis: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. Matt, are we going into a caller now? We are doing something we've never done before. What's that? We are going to get two callers up at the same time. It's a bug-off call. It's a bug-off call. We've got It's Alex and Millie, their husband and wife. They're both in Harrogate and they are here with us. Hello. Good afternoon, Matt and Martin. Hello, Alex, and hello, Millie. Hello. Good afternoon. And I'm glad, Millie, I'm guessing I can work out which one you are because Alex could have been confusing if there hadn't been a Millie there.

28:49To be fair, it's probably the one with the kids screaming in the background. Okay. Yeah.

28:53Martin Lewis:That's good. Alex and Leslie, that would have been a tough one, wouldn't it? Which would you have gone for? Alex and Millie, anyway, I digress to carry on. So what are you calling for? So I emailed in to Matthew Esquire recently. Thank you very much. We've sort of been avid listeners of the podcast. My wife actually introduced me to you, Martin. You married very well, Alex. Yes, you did. You married very well. Alex, remember that. And yeah, obviously we've been following for years now and obviously we take all your advice and guidance and we've recently had a couple of really good successes. Off the back of, I think it was one of your previous callers who mentioned the section 75 claim.

29:36We put in one ourselves with our bank after we had a bit of an issue with our car and managed to get£1 ,800 back.

29:44Martin Lewis:Oh, tell us, how, tell what, when, when, how, why? So we bought a car secondhand from an approved used garage and after about 11 months, the car developed a timing chain issue and the garage was absolutely awful. They refused to respond to anything. We went through the ombudsman, which took an absolute age. The motor ombudsman? Yes, correct, yeah. Well, it's called an ombudsman. It's not a statutory-based ombudsman like the financial ombudsman. It's a trade body ombudsman. I always have questions, who should be allowed to call themselves ombudsman or not? But carry on, I'm delaying your story.

30:19Eventually, we sort of gave up with that route, saw the story and we thought, hey, let's try this and went to our bank and, yeah, it was absolutely incredibly easy. They were very supportive, got the evidence to them and very quickly we found ourselves back in the position of having£1 ,800 which we'd had to fork out to cover a car.

30:36Martin Lewis:Oh, well, that's absolutely wonderful. So just to explain to everybody, if you pay for an item costing between£100 and£30 ,000 and you pay for any of it, even a penny on a credit card, the credit card company is jointly liable with the retailer. Now, the advantage is if the retailer is causing difficulties, you can go to the credit card company and hopefully as in your case which is brilliant it will say all right we will give you your consumer rights and we will get because you have the same consumer rights with the credit card companies with the retailer and if they don't what's actually interesting is with the credit card company you can take them to the financial ombudsman about consumer rights whereas it's much more difficult with normal retail you generally have to go to court unless as an ombudsman but the ombudsman tend to be actually dispute resolution processes rather than full-on ombudsman.

31:22Martin Lewis:That's why it worked. Well done. Brilliant. You said a couple. I want more. More savings, please. Millie, have you got one? Yeah, no, absolutely. So I first started following you way, way back, Martin, as I said. You are so superior at money saving too, Alex. I'd like to say that now. But that started in 2019. Before I met Alex, I was obviously trying to save a big pool for a deposit for a mortgage on a house. It meant by the time I'd met Alex and we pooled together, I'd save so much. one of the recommendations I took was to open at the time, which was a really, really high interest or the highest at the time, which was a Marcus by Goldman Sachs.

31:54So like that, for example, was great. We've done all of the bank switches you've recommended. So we've made over two grand on that.

32:01Martin Lewis:Oh, your serial bank switches. Love it. Yeah, no, absolutely. So I mean, don't get me wrong. The logistics of working the joint diary and all the bits. I will admit I did cock up on one of them, didn't I, Alex? Of which Alex will always, always hold that against me. um we're all allowed one mistake a lot and then at the moment i think alex can talk more about what we're doing for our house renovation and money saving we uh we ended up sort of listening in and hearing about the whole stoozing thing and being fairly fastidious with money we thought we'd have a look into it a bit more and decided we'd try it um given we're doing a diy project renovation at the moment we thought it'd be a great way of covering all our costs and not having to dig into our savings and it's worked out really well and we've managed to sort of pull about 30 30 grand so far.

32:45Martin Lewis:You've got a 30 grand stew's pot? Yeah. Wow. We're trying to find a way of making it a bit bigger, really, because we've got a lot of credit with other people, which isn't on a 0%, so it's a sort of wangle of the way of getting around that. That's the biggest stew's pot I've heard, new stew's pot I've heard in a while. So for those who don't know, stew's pot is where you deliberately create artificial 0 % debt that you don't need. So you borrow money at 0 % and then you save it at high interest. So if you've got 30 grand at 0 % and it's complicated how you do it and this is only for people who are financially savvy as Alex and Millie clearly are and we've talked about how to do it in the past I'm not going to run into the full details on it it's called stoozing well with 30 grand at four percent interest that's 1200 quid a year gained isn't it I mean that's really well done that's really I tell you what's interesting for me and we had we had the caller on earlier and he was talking about how his he and his wife have slightly different ideas about whether savings and that that can be a friction in a relationship I'm not saying it was in his case.

33:40Martin Lewis:But to do something like you're doing, you both have to be into it. To be able to get a 30 grand stews pot and to be doing the bank switching, it has to be something that you both love together, I'm presuming. And I can hear it's there. I mean, absolutely. I mean, we've done it all together. I'd say we're a couple. We sort of, it sounds awful. The stereotype is there's always one person in the couple that knows all about the accounts, the money, et cetera. And I think, like, we are completely against that. Like, we both know what's going on. I mean, Alex started with the stusing and I was like, hold on now.

34:11Come on, you've got to let me in. I need to know what's going on. I'm the diariser here. You know, we have not missed any of them. So, yeah, absolutely. You're right. It's definitely a joint effort. And I think both, if you're in a couple especially, I think both of you need to be on board to get it like the absolute max benefit.

34:27Martin Lewis:I think it's perfect. You two are amazing. I want to do a program with you. You're brilliant. I love it. It's fantastic. Matt, we might need to do an Alex and Millie special, I think. I was just thinking the same thing. we could go through we could maybe bring them in with Adrian here on the main pod one day and just go through all those different issues, that could really work you never know, you're listening here, you might hear it in the future, you two are brilliant thank you so much. And thank you for your help as well. Thank you for all you've done for us as well. It's absolutely my pleasure, I love to hear it, thank you.

34:55Thank you.

34:55Martin Lewis:Thanks both. Cheers, bye. Matt, I think we could probably squeeze in one more question before we get into the discussion of what we're going to call contributors. Okay, I think we can do one from Holly. She says, Hi Martin, big fan of the show. Oh, thank you, Holly. And I'm sure she loves you too, Matt. Yeah, definitely. Even if she didn't mention you. She just forgot. And I don't want you to get upset about that. She forgot my name. We're not going to mention that she didn't mention you. Just carry on. Just move on. Actually, no. Someone did email in the other day and said, Hi Martin, and I forgot the name of the other guy.

35:27Martin Lewis:Well, at least they remembered you. I mean, Holly, she's not noticed you. Well, I did think you could just go back on a previous podcast, but I didn't want to say anything. Anyway, let's go. Holly's question. We may be getting two up our own whatever, McCall's on this show. No, never. Holly, what's Holly's question? I like Holly. She's a big fan of the show. She says she's currently debating whether to fill in some of the gaps in her national insurance contributions. It's hard to say that. Okay. I have two years I can pay. It's not really. It's national insurance contributions. It is. Some of the gaps in my national insurance contributions.

35:59Well done. Carry on. Thank you. So she says, I have two years I can pay, which would bring my total number of years to 10. Not as many as I would have. Oh, I can't speak. Matt, what's happened to you?

36:11Martin Lewis:Have you got podcast fatigue? I have, yeah. I'm going to have a nap under the desk. This is a new condition that many people of your age, many millennials are suffering. It's podcast fatigue. It's a terrible thing. Too many podcasts. So she has two years. She has two years. I want you to leave all of this in. The listeners want this in, Matt. They don't want this in. They do want to hear the question. Leave it in, Matt. Can this guy just say this question so I can hear it? Do you know what I'm going to let you do so the question's clear? You can start the question again, but all this needs to stay in.

36:42OK. OK. Holly, big fan of the show. She's currently debating whether to fill in some of the gaps in her national insurance contributions. She has two years she can pay, which would bring her total number of years to 10. Not as many as she'd like to racked up. But she spent several years working abroad and sometimes studying. She goes on to say, I'm currently 36. Is it worth paying the two now or would it be considered a waste of money as I'm likely to reach the 35 years needed for a full state pension anyway?

37:09Martin Lewis:Righty-ho. That's a really interesting question, Matt. Well done for getting all the way through without any stumbles on the second read. You are a professional. Right. So the first thing to understand is the minimum number of years that you need to have of national insurance contributions in order to get a state pension is 10 years. That's the minimum. If you have less than 10 years, nothing counts. But it sounds to me like you're planning to work in the UK, so that isn't an issue. I think this is probably overkill. Until last year, you could buy back a huge number of years in one go, and that was a transitional arrangement when we shifted from the old state pension to the new state pension.

37:45Martin Lewis:That's gone. You can now buy back six years. For those of you thinking, what is all this buying back extra national insurance years all about? Just a quick briefing. When you hit state pension age, whether you get a state pension or not, it depends on the number of national insurance years. Now, you get national insurance contributions from work. You can also get it when looking after children or if you are eligible for certain benefits. And you accrue them over the years. To get a state pension, you need a minimum of 10 years. To get the full state pension, you need roughly 35 years. It isn't 35 years.

38:24Martin Lewis:Don't think it is 35 years. Whether it's 35 years or not depends. But let's just say roughly 35 years. Now, if you've got between 10 years and the full amount of years, roughly 35, then each extra year that you have means you get a bigger state pension. An extra national insurance year is worth around 360 quid a year of state pension for you. So if you're going to retire on less than the full state pension, and you can buy a year even if it costs you£1 ,000, because it's going to add£360 a year to your state pension, if you live just a few years, once you get your state pension, you make the money back.

39:05Martin Lewis:And currently, the state pension is also triple locked. That means it rises with the higher of average earnings, 2.5 % or inflation. So it's completely unbeatable looking at the current system. The question for younger people, though, is the current system could change. So that's why you may want to look back if you're missing national insurance years and buy them back if you're not going to get the full state pension anyway. But as I've been explaining in the podcast, it's a little bit more complicated than that. Back to my other explanation after this explanation. I know it's all a bit meta.

39:42Martin Lewis:The first thing I'd do is I'd go and look at your pension projection. On your pension projection, your state pension projection, which is on gov.uk, are you predicted to be able to get that you will have the full state pension when you retire, which is a very long time away? If you are, I think this is probably overkill. Because it's not like once you get to the full state pension, you earn more national insurance years. You're getting even bigger than the full state pension. You know, it doesn't work like that. And many older people complain, going, I've now got enough for my full state pension.

40:13Martin Lewis:Why do I have to keep paying national insurance? and that's because national insurance is a tax. In reality, it's just a tax that also happens to be demarked as your contributions towards getting a state pension once you're older. So if you are on for the full state pension, then you probably don't need to do this. The only time I would make an exception on that is if you could buy these years really, really cheaply. If any of these are part years, so a part year is where you've almost got all the contributions you need to get a year, but you're not quite, and it's binary. So I know people who've been able to buy part years for 15 quid.

40:49Martin Lewis:Normally, a full year is going to cost you in the 900-ish pounds. But if you could buy a part year for 15 quid, 20 quid, hey, maybe even 50 quid, even at your age, just in case something happens in future, as you can only buy back a certain amount, you can only buy back six years, I would be tempted to go, you know what, it's 50 quid, I'm just going to do it just on the half chance that I might need it at some point in the future. but if you're having to pay the full 950 for it I'd probably be thinking it wasn't worth it now when I was doing my big explanations on buying back national insurance years when you could buy a lot back I could only really go you could only really strongly do the analysis for people who were basically got to around their 60s because once you're around your 60s you have a pretty firm idea of what's going to happen to you you are so young at 36 for doing this there are a lot of risks that you're just going to be buying money throwing stuff away you know there are big risks for you that the state pension might become means tested once you're older.

41:43Martin Lewis:We don't know that. I mean, I don't think that's going to happen imminently. I don't think it's going to happen for people who are retiring now. But you're talking about retiring in 30 to 35 years. And who knows what will be happening in the UK to state pensioners in 30 to 35 years. So there are a lot of risks in this, in doing it now. If you're on to get the full state pension, I probably wouldn't be doing it other than if you can get a year really cheaply so that, you know, it's beer money type costs where you may as well do it just as a safety net in case there's a year that you don't work in the future and you wouldn't be able to get.

42:15Martin Lewis:And this would be a really cheap way to buy it. I hope that makes sense. You do need to go and do a little bit more reading. If you are thinking, if you've gone in the frame of saying, actually, I think I will do by a year, then you need to do some thinking. And there's a government system where you need to call and get some advice first on whether it's right or wrong for you before you buy it. So we're only on the first step of whether you should look at it, not whether you should actually do it at this point.

42:37Martin Lewis:Right. And now, Mr. Burnham Esquire. Yes, Martin Lewis. This is the important point where we reveal what our selection of the two potential names for contributors. A contributor is being defined as anyone whose question is read out or any callers who come on to the Question Time podcast or anyone who gives information that we use. you will then get to use this name, whatever we call you. You will be able to perfectly legally, within the canon of the podcast and not within the actual law, perfectly legally use this after your name. And if you are a caller, you're going to get a badge. Is that right?

43:17Martin Lewis:Yes. I haven't seen it. She's just so mean. So I took the liberty of designing the badges myself. and I want to say that I've done a fantastic job. So, what do you think? It's yes. It's definitely me with Mickey Mouse-ish headphones on and I am A and you've gone for one of the two options but of course that could change. Yes, so that was just the mock-up. And have we got budget from the BBC to send badges to our callers? We do. I've had the green light from the editor. Has Tom said yes? Tom said yes. Well done, Matt. Thank you. Wow. This is exciting. but we're just clarifying the rules now this is only for callers so yeah if you come on and we speak to you and you ask your question or you say your success to us then you can have a badge if we just read out your question then you can call yourself one of these whichever one of the two options is whatever you decide but you won't get a badge unfortunately now this for those listening this is Sony award winning gold standard producing here thank you because what Mr Burnham Esquire has done is he's the person who has to get people to come on and do the calls on the podcast.

44:30Martin Lewis:Now, what's interesting is actually in my subject, it's often quite difficult because many people who call, say, in the main podcast, it's about problems that they have. We actually tend to find it easier in this podcast as many of the people are quite into their finances and it tends to be about positive rather than negative things, which they're more happy to talk about, like our brilliant callers today that we've had in. But still, Matt, this is giving you a little bit of something that you can say, you get a badge if you come on, isn't it? That's where you've come from. That's what you've done this for.

44:57Martin Lewis:When they see their badge, they might not be as... Are we going to, just, sorry for going in this, before we reveal, before we do the big reveal, are we going to show anybody what the badge looks like or is it only for people who get the badge who will actually get to know what's on the badge? This is an interesting decision. I think you should not tell anyone. We don't show anyone and you only find out if you come on and ask the question, Dane will send you the badge. Because, honestly... And just to say, the BBC's going to do the postage and everything. People don't have to come to London to pick the badge up.

45:29No, no, no. It'll get sent to you. Second class stamp is fine. Second class. I'm looking at the badge now on my phone. I'm very impressed. I'm proud of myself. Do you and I get a badge? Yeah, of course. Does Rosie get a badge? It depends how nice she is to me that day.

45:47Martin Lewis:Oh, she's just pulled her... She's just done pouty lips. She's not happy. Rosie gets a badge and I might need a badge for my daughter. And Sally as well. And Sally gets a badge too, yes. Does Simon get a badge? I'm not getting involved between you and Simon. Especially on the mass reveal that's about to happen. So mass reveal, in editing afterwards, please add a drum roll. Thank you. So, the two potential names for contributors on the show are first of all, suggested by podcast producer Simon, and which really annoys podcast producer Matt, Matt Samley produces the main podcast, is MPC, Martin's Podcast Contributor, which is also the Monetary Policy Committee of the Bank of England to Decide Interest Rate.

46:33Martin Lewis:That's why you like it so much. That's the clever financial spin. Yeah. The other one, and can you remind me who suggested it? Yes. So this was from Steve. Yeah. Steve suggested that people become Esquires, which is, as we call Matt, Matthew Burnham, Esquire. you'd be able to become an Esquire. But an Esquire stands for? Extremely Savvy Questioners. So your choice is between MPC, Martin's Podcast Contributor, and Extremely Savvy Questioners, who will be referred to as Esquires in future. And that is the choice. And how are we going to allow people to vote on this? I've been thinking about this for a while.

47:11I had to go and email someone at the BBC to find out if we could do it properly. Oh, I had to jump through many hoops. I think Have you got a video of you jumping through hoops? Yeah, many I'll put that on social Okay It's at Crufts actually So I think what we should do is you should email in with which one you like put it in the title not the title the subject line and just put ESQ or MPC I'll top them all up we'll close it after a week or so

47:41Martin Lewis:Yeah, so we decided so we did discuss me doing a social media poll which I do a lot of but then we'll have a lot of people voting who don't actually listen to the podcast and we didn't think that was fair. This is, it's you who are listening towards the end and us droning on about this. I don't know, we've been going for about 40 minutes now and who are still listening who get the right to vote on this. So yeah, so email martinlewispodcast at bbc.co.uk. You don't need to put anything else in there. You literally just put in the subject line either MPC or ESQ. Matt will top them up and no cheating and multiple voting, please.

48:14Martin Lewis:Nope. That's not in the spirit of what we're doing. And then we'll reveal it next episode. And then we will reveal it next episode, and that will be the formal name, and then the badge will be done, and then I'm going to say this, Matt, and I hope we're not, you know, busting budgets here. From next week, when we do the reveal, if you are a caller on next week's show, you will get a badge. It might take a little while for the badges to be made and for it to be sent to you, because we have to wait until we know which the winner is. But you will get a badge from next week onwards. Yep. Hooray! Let's end here.

48:42Martin Lewis:Woo! Thanks, everyone. And that's it for this week's Question Time. Don't forget to subscribe so you know when we release a new episode. We, yes, that's me and Matt, put out a new Question Time episode each Monday alongside the podcast with Adrian on Thursdays. Aren't you lucky? Two doses of money-saving tips and tricks a week. Make sure you're sending your questions. You can email martinlewispodcast at bbc.co.uk. And don't forget to vote. Do you want to be, if you contribute, an MPC or an ESQ? We need your votes now. Keep voting, folks.

49:32Martin 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.

50:27I got bills, I gotta pay independent journalism and storytelling. It all starts with a subscription to bbc.com and the BBC app. Find out more at bbc.com slash unlimited.