Question Time: Should I overpay my mortgage? If I sign up online, why can’t I cancel online? Can I open an ISA for my niece?

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1:50Martin Lewis:You can choose who to claim from. Well, we just do give some feedback on a question I had last week. You've been roped in to speak to us. I consider it a very good one. It's something I've long said that we should do as well. She also keeps us in check, doesn't she? She does keep us in check. Coming in first! And it's always lovely to hear your success. Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is the Question Time episode where you get to ask me your questions on absolutely anything and everything. Open brackets within reason, close brackets.

2:21Martin Lewis:This week, your questions are, I've got two travel insurance policies. Which one should I claim on? When you say pay off all debts, does that include your mortgage? Am I allowed to open a junior ISA for my niece and nephew? Is there a law that if I sign up for a subscription online, I can cancel it online? Success! Last week's geeky broadband question has paid dividends. Not literal dividends, more money saved, but you get the point. And finally, how does height impact the number of steps you get? Play the theme tune.

3:07Martin Lewis:Hello and welcome to this week's Question Time podcast where you get to ask me anything and everything. Brackets within reason, close brackets. And of course, as always, let's welcome the man himself, our curator of questions, Mr. Matthew Burnham. That was meant to be clapping. Oh, right. I thought something had gone wrong. Where were the titles? Yeah, it did. It was meant to be clapping. It was acclimation. I see. Titles, please. Well, I don't know. I can call you. I know you like Professor Sir Matthew Burnham Squire. I love that. Oh, sorry, Dr Professor Sir Mathibon, but you haven't actually earned any of them.

3:50Martin Lewis:No, I only have a BA. But you have earned Curator of Questions. Yes, because I curate the questions. Now, something we needed to discuss that we talked about before we get all into this, sorry, we will get into the proper stuff in a moment, everyone, is we were talking about I have a title. Yes. You know, money-saving expert. You have a title. Yes. Curator of Questions. And then we have all the brilliant people who get in touch and provide questions, which provides content for this podcast, which we love, they therefore should have a question too. If you have your question on air... Now, we discussed after last week's podcast, when it was just us and the wonderful Rosie, who's here as well, what that should be, and we came up with ideas.

4:29Martin Lewis:I have an idea. Do you have an idea? I don't know if I have a good idea. That's the problem. What's your idea first, and then we'll see. So this is the Question Time podcast, which is QT. so I feel we should call them cuties. Oh, that's sweet. Yeah, so anybody who gets in touch is a cutie. A cutie. And are we spelling it Q-T? Q-T, obviously not C-U-T-I-T. Okay, okay. But Q-T, and obviously every time we do it we'll have to make a slight mention that it's Q-T so somebody doesn't realise and think that we're doing it the wrong way. Or we could go with something more formal, couldn't we? Yeah, so I was thinking that if you've come on the podcast you feel like you're part of the club.

5:10Okay. So I was thinking... You're on the inside, not the outside. Yeah, exactly. You know, you've chatted to us. You've got your question answered by the man himself, which is you. So it's like, are you in this club? And so I'm trying to think of what we should call it. I want to get your name in it. So like Martin's Cuties? I don't know. I'm not sure Martin's Cuties. I think that'll get me in all types of trouble. You know, something along those lines.

5:39Martin Lewis:I want it to be your club. There's an easy way to do this. Go on. We're talking about them. So now we are talking to them. If you are listening now and you have a good idea, maybe you like cuties, maybe you've got something else that would work, then get in touch at martinlewispodcast at bbc.co.uk with your ideas for what we should call anyone whose question is either read out or comes on to talk on the podcast. Okay, with that done, what's your first question? Lovely question here. I don't know why I said that. Presenting local radio. We've got a lovely question here. Coming in first. Oh, dear.

6:18Got a question here from James to start us off. He's emailed it in. He says, dear Martin and Matt, which I'm not really happy about the order.

6:28Martin Lewis:It's fine. That's very good. I receive travel insurance as part of my HSBC bank account, but I also have travel insurance from a workplace healthcare plan. He says, what happens if I need to make a claim? Can I choose who to claim from or do I need to notify both? He also then goes on to say, whilst I've not claimed, I want to make sure I don't encounter any issues should I need to. I've used AI to compare both policy documents and my bank policy is more comprehensive, but I don't have the option to opt out of the company plan without declining workplace healthcare. Okay, what an interesting question, James.

7:01Martin Lewis:Thank you very much. Well, the first thing to say is there's no problem having two policies. You're fine. What there would be a problem is double cover. You cannot profit. You can only get your cost back. So you couldn't, for example, have an incident abroad and claim off both the same amount. So you're making money on the back of it. That's a breach. That's the first rule. Second rule is you can choose who to claim from. But when you're making that claim, you must answer honestly. And it will usually ask you if you've any other insurance that may cover this. That's one of their standard questions.

7:34Martin Lewis:Do you have any other policies that may cover this? and you should tell them yes. Rule three is when you claim at that point, the insurer that you claim from, and I would always be claiming for the one that gives me the best cover, so in your case you'd want it to be your bank policy because that's got the best cover, the insurer that you claim from may try and recover the costs from the other insurer or ask you to do so. And all of that depends on the terms of your particular travel insurance policy. So you should be covered, and yes, it's simpler to have one, so you can answer no. But in your case, you can't only have one because you're getting better cover from your bank policy anyway.

8:12Martin Lewis:So I would go, if something happened, I would claim from my bank, I would answer honestly, they may get in touch with the other insurer about what they cover. Hopefully, they'll do it together so you don't have to get involved, but you might have to get involved. But that's roughly how it works. So yeah, go and claim if it happens from HSBC. I think it was in your case, and I hope that makes sense. okay so caller caller caller uh this one's a bit funny i suppose not the question but the circumstances we'll bring dan in dan's in leeds hi dan hi i'm at a martin how's it going hello mate hello so dan it's martin and matt just no it's matt and martin um thanks for getting the right way around so uh dan you've been roped in to speak to us haven't you yeah well not so reluctantly because I've been a fan of the podcast as well.

8:59But yeah, I've been given the honour of asking the question. So your wife emailed in. Yeah. And this is her question.

9:08Martin Lewis:So your wife emailed in, it's her question, but you're voicing the question for us. Thank you so much for doing that. Perfect. What is it? Yes, she's asked because she knows that you've talked about whether you should pay off any debts before like savings and investing. Yeah. But she's wondering if this applies to like mortgages? Okay that is a big question so let's let's take this one step at a time actually my general advice about debt is you should always pay off expensive debt before saving now it does get a little bit more conscientious because you also want to have an emergency fund so it depends on the nature of the debt that you should pay off an emergency fund is there so you don't have to borrow even more so credit cards are quite simple because credit cards are an open ending system of borrowing so if you think about it if you've got a thousand pounds on a credit card and you've got£1 ,000 in savings, the credit card is costing you 20%.

9:58Martin Lewis:The savings are gaining you 4%. You gain 16 % if you use the savings to pay off the credit card. And the advantage with the credit card is once you pay the credit card off, it can sit there at a zero balance. And if you had an emergency because you now don't have any savings, you could just borrow back on the credit card and you'd be in no worse a position, but you would have saved the interest meanwhile. It doesn't quite work the same way with a loan because you don't have the borrow back ability in the same way. So there's a little bit of thinking, but the general rule is you pay off expensive debts.

10:27Martin Lewis:Let's move to mortgages. OK, with a mortgage, the rule of thumb is this. If the mortgage rate is higher than the after-tax rate you can earn on savings, so let's say you've got a 6 % mortgage, you can earn 4 % in savings, then you are generally better to overpay the mortgage, making sure the payments go towards reducing your capital, which will effectively reduce the amount of time you have left to pay on the mortgage. They don't just reduce your monthly payments, then you don't make an interest saving because they're just spreading it out over a long period. If the savings rate is higher than the mortgage rate, then you are probably better off to save with a couple of caveats.

11:11Martin Lewis:First of all, I'd go on to a mortgage overpayment calculator because if it's very close between the two, generally overpaying your mortgage will win because of the vagaries of the way interest is worked out. but also if you reduce the amount of your mortgage debt, if you've got quite a high proportion of borrowing to your house's value, if you reduce the amount of your mortgage's debt, you reduce the loan to value, which could mean you might be able to get a cheaper mortgage when it comes to remortgaging. So that's worth thinking about too. The two big caveats to overpaying your mortgage are, first of all, I would always have an emergency fund in liquid cash because if you overpay your mortgage and suddenly something happens that you can't pay it anymore, that's not going to start the bank going, oh, you've overpaid, so don't worry about paying us now.

11:52Martin Lewis:They're still going to put you in arrears. And second, you need to check that there aren't any overpayment penalties. So there are some mortgages which will have penalties if you try and overpay. But in general, on most mortgages, you can pay off up to 10 % of your outstanding balance each year without any penalties. But you should always check that before you do overpay. So how are we doing? That's debt and mortgages. Because we're with Santander at the minute and it's 4.26 % interest. So you're in that fine line. Do you know what your LTV is or roughly, have you paid a lot of your mortgage off or are you relatively new and Seth will have a big debt on it?

12:33Yeah, it's relatively new.

12:36Martin Lewis:I then asked Dan how much his house was worth because I needed to know that to understand whether it's worth overpaying for LTV reasons. He gave me an answer, which we're not going to put on air. But effectively, as he's borrowing less than 60 % of his home's value, he probably won't get a gain from reducing his loan to value because you only get that if you're borrowing over 60 % of your house's value. Therefore, that isn't really a factor in his decision. Well, in that case, you're probably not going to get much LTV gain. The gain on loan to value is for people who are borrowing over 60 % of their house's value.

13:08Martin Lewis:So you're not in that category. So I think it's really just a piece of financial mass. Now, you could find, certainly have an emergency fund, and you could find that savings, you know, there are savings at 4.5%, but if you're putting a substantial amount away, that will be taxed that reduces it. So you might want to have your money in a cash iso. You might also want to think about investing if you've got spare cash, which can do quite well too. It's a fine balance. I hope that gives you a little bit of a clue to where to start, though. Yeah, it's definitely given me a direction to have a look at.

13:39So, yeah, I appreciate that.

13:41Martin Lewis:Thank you so much. Thank you for calling, Dan, and send the best to your wife as well, because she couldn't call, I know. Yeah, I appreciate that. So there we go. I think that gives a relatively simple summary. If it's expensive debts, get rid of them if you can. Just make sure you've got the emergency fund. If it's a mortgage, if the mortgage rate is roughly the same or higher than you can earn after-tax in savings, you will tend to be better off overpaying the mortgage. Again, as long as you've got an emergency fund, which I define as three to six months' worth of bills, you can make your decision whether you want three or six months worth of bills and do make sure that that counts towards paying off the capital and there aren't any penalties.

14:19Martin Lewis:And it's worth thinking too about whether you'd like to invest a little bit of cash too to build for your long-term future. As long as you're putting money away for at least five years that you don't need to access in a broad spread of investments that will probably outperform saving and may in some cases outperform paying off your mortgage too. Although, of course, it's shares so it can do well and not so well.

14:42Martin Lewis:OK, so that was paying off your debts. What's your next question for me, please, Matt? Got one from Scott. He's emailed it into martinlewispodcast at bbc.co.uk. Very short question, but I'm sure there's a lot you can talk about. Hi, Martin and team. I mean, me and you. And Rosie. And Rosie. Sorry. Sorry, Rosie. So, Rosie, for those who don't know, Rosie works with me. She is a researcher with me and he's brilliantly clever. and she sits alongside me to be the pair of ears because sometimes when you do broadcasting, the thing that comes out of your mouth is not the thing that your brain was meant to say so that she will sometimes go, you just said that.

15:18Martin Lewis:I'm like, did I? That's what happens. So yeah, team is fine, Matt. Team. She also keeps us in check, doesn't she? She does keep us in check. So Scott's question. I'd like to support my nieces and nephew by opening an ISA. Can I do it? Well, Uncle Scott, no is the honest answer. I presume you're talking about a junior ISA, which is a tax-free savings account you can put, or investment account, you can put up to£9 ,000 a tax year in. But the child can't then access the account until they're 18. So it is locked away until their 18th birthday. And then on their 18th birthday, it is totally their money.

15:53Martin Lewis:But you as an uncle can't do it. It generally has to be the person who has the guardianship or the parentship of the child to be able to open their ISA. So you will have to do it through them. And just as a general note, I tend to almost always get questions about cash junior ISAs. I think junior ISAs are one of those areas where you really, really want to always be focusing, if you possibly can, on investing. Again, always investing in a broad spread of assets, you know, a combination of tracker funds and that type of thing. And the reason for that simple, you're generally locking money away for up to 18 years that cannot be accessed.

16:34Martin Lewis:And the rule of investing is if you're locking money away for more than five years and general people, if you've got an emergency fund and you're not haven't got any high debts, which hopefully children won't, then you should look at investing over savings because on a on a balance of probabilities, it will outperform. well a junior isa is in that sweet spot it's absolutely in the sweet spot money locked away for a long time that you don't need by definition because you can't access it and therefore i don't know what you were going for because you just asked about an isa you could well be thinking about a shares isa but um i it's you can have both by the way if you don't want to go too far and you think that's a bit much for you you could put some in a cash isa and some in a shares isa and it could work that way so i'd be having a think about that way but you can't do it you're and need to talk to the parents, Uncle Scott.

17:19Whilst you're answering that question, Martin, I did a little search to come up with some names. So you weren't listening? Of course I was listening. I can multitask. Okay, I can't. Well, don't you. Definitely can't. And it came up with a couple of ideas, and one of them which I really thought was good. So this is for the club? This is your club idea? This is for the club, yeah. Alternatives to QTs. So instead of calling them QTs, we could say they're part of the Frugal Fellowship.

17:42Martin Lewis:It's very Lord of the Rings. I know, but it's funny. It is. It is, but I'm just going to go, OK. This pod isn't actually about frugality. No, it's not. Right. You know, frugality is... So when I always talk about money makeovers, I talk about there are two steps to it. The first step is to go through everything that you spend money on and see, can I get the same and pay less for it? If at that point you're still spending more than you earn or more than your income, then you start cutting back. And that's frugality. Frugality is the second part for me, not the first part. And actually, most of the questions we get are about the first part.

18:19Martin Lewis:They're about money management and products. So while the frugality of the rings, or whatever it was. Frugal fellowship. The frugal fellowship. Frodo. Am I pretty? While I think that's nice, and it sounds nice, it's good alliteration, don't think it cuts it. What about finance fellowship? No. Okay, do you know what? We'll keep thinking about it. And I'm sure someone listening is much more creative and it will blow us out the water. That's the problem with AI, you know. If you start using it, when you need to come up with something, instead of putting your brain to it, it's so easy to just ask it to come up with random solutions.

18:55Martin Lewis:I worry that we lose, you know, you almost lose our creativity by not doing it ourselves. Anyway, I should be doing a question. Okay, what have you got next for me, Matt? Got a question, well, kind of a question from John. It's on subscriptions and cancelling them. So he has emailed in and says something he'd like you to explore is the possibility of a consumer law that requires people to be able to cancel subscriptions or services at no more effort than to set it up. So he says, I can set up broadband in about two pages, takes five minutes, yet to cancel, I have to spend an hour waiting on the phone to then be bombarded with different people on ways of trying to keep me.

19:36If it were the same form to cancel, It would force companies to be more competitive. And a lot of people, especially the elderly, would not get ripped off because of broken processes. Cancellation teams should have to answer as quick or quicker than sales teams and so on. If I phone a company to buy something, they'll answer the call within two minutes. If I want to cancel, I speak to someone else and have likely been on hold for hours for the privilege. Just an idea. And I think you'd probably consider it a good one.

20:03Martin Lewis:I do consider it. I consider it a very good one. It's something I've long said that we should do as well. My view has always been quite simple. I should be able to get out of something the same way I got into it. So if I set it up online, I should be able to get out of it online in the same way. If I called, I should be able to call. If I texted, I should be able to text. That should be a basic rule. Now, of course, the best rule, and with my Money and Mental Health Policy Institute charity hat on, is for people with mental health issues, is that you have all the different contact routes available at every possible opportunity, because that makes it easier for people.

20:32Martin Lewis:But firms are not that into it. certainly firms who are not in essential service providers, where they have to have more rules about how they treat vulnerable customers. So the good news is, in the Digital Markets Competition and Consumers Act, there is a point, just checking it as I go, so that was hence the slow talking, that says consumers should not have to put in more effort to exit a subscription contract than they did to enter it, which I think goes quite a long way to covering John's point. in the consultation examples of how this works in practice include being able to exit online if you signed up online and only requiring a consumer to contact the trader once to cancel the subscription all of which we will all agree on so there it is there is an act that does this isn't that wonderful but while that law has been passed each section of the law needs specific secondary legislation So that's where a minister is saying this is now in part and exactly how it's going to work to bring it into force.

21:36Martin Lewis:And the way that that secondary legislation comes into place is it has to go out to consultation. And the government hasn't yet set out its final rules on this section. It was meant to come no earlier than spring this year. It's now looking at autumn this year. So let's just cross our fingers that by the end of the year, that will be in place. Great question, John. Really appreciate it. OK, so now I'm guessing it's a caller and it's... What's the question? Not a question. A success. I think it's probably just best to bring him in. So we've got Jamie in Sheffield. Hi, Jamie. Hiya, how's it going?

22:12Martin Lewis:Hello, Jamie. Hiya. What can we do for you? Well, it's just to give some feedback on a question I had last week, which was described as a very nerdy question, which I'm very proud of, I must say. I am the broadband question. Ah, so that was the question with, should I wait until April to try and avoid a price hike on broadband? Because they're telling me if I sign up now, they'll, in pounds and pence, what it will go up. It was a really tough and geeky one, but I hedged on the side of getting now. What did you do? I waited a couple of days. I was waiting, eagerly waiting for your response. And luckily for me, when I was checking the comparison site, I always check.