Question time: Will new ISA rules ruin my wedding savings? | Martin, you helped me find love! | Can I fix on a prepay meter?

22:58Martin Lewis:So you could buy a short-dated gilt for six months and in six months' time you know exactly what the government will pay you. So if it costs you 98p or 99p, it will pay you a pound and you might get a little bit of interest too. Normally the reason people choose short-dated gilts outside of an ISA is the capital gain you make. So the increase from the 98p to the pound is tax-free. So it can be a very, it doesn't apply to capital gains tax, it's exempt from capital gains tax. So the amount that you can get if the gain is where you're making it most can be very effective for people who hire or top rate taxpayers and can actually net in at better than a savings account.

23:36Martin Lewis:Now, you're within an ISA, so that wouldn't matter anyway. But you may find, you know, let's say if you're de-risking from shares eight months before you need the money, you might be able to find a short dated gilt, which gives you an exact return as long as you hold it for the full eight months until it matures, you may be able to find an eight-month guilt that will give you an exact return in eight months' time as long as you hold it for the eight months' time and pay a little bit of income on top, which might outperform your cash savings. Now, clearly, I've explained that quickly and you need to do some reading on that, but it sounds like you're financially savvy and that is worth looking into for you.

24:15Yes, that would be great, yeah.

24:17Martin Lewis:Yeah, but I mean, they're trying to shut off these routes. That is the overall problem here. It is the real problem. So now just let's go, let's change subjects slightly. The wedding, the marriage. You're obviously, it takes two. Yes. Are you both thinking of this or are you thinking of this? No, no, no. We are both thinking of this. What would be the trigger for it? Well, we've got a big family holiday, our first big family holiday coming up this September. so I think maybe a question might be asked. Okay. But in terms of actually the time, like the timeline of everything, I would like to wait for my youngest to be sort of five years old-ish just so that they can enjoy it as well and not be so, need so much babysitting on the day.

25:13Martin Lewis:What is your partner's name? Scott. And will Scott listen to the podcast? He may do because I've asked a question, but generally... I mean, because he's going to hear that you've just said you're expecting a question to be asked. I mean, we need to be straight about this, Katie. No, no, he's... This has been a conversation for quite a few years. Yeah, you've been dropping, shall we say, not-so-subtle hints. Yes, yeah. And of course, from my perspective and a financial perspective, the benefits of marriage or civil partnership are absolutely huge financially for inheritance tax and passing assets between spouses and all of that type of thing.

25:54Martin Lewis:So it is absolutely beneficial if you're in a long-term relationship. It is hugely beneficial financially to be married, or if you don't like the baggage of marriage, a civil partnership does the same thing compares to cohabiting. So I approve. I approve. OK, good. It sounds good. If anything happens, I can email back into the podcast. We would love to hear. We'll have to do an update on the story. We'd absolutely love to do that. Thank you so much for your question. I hope it managed to help somewhat. I mean, we're still all working our way through this new structure that the government has come up with for when it comes in place next April.

26:31Martin Lewis:But those are my provisional thoughts. Yes. No, yeah. I feel like most probably people in this situation is you sort of get a bit punished for doing the right thing almost. But never mind. Yeah, and of course, I shouldn't say what I'm going to say, but the plan is it will be happening next April and one suspects there might be different personnel making decisions, so who knows? Yes, yeah, yes, that's true. Okay, thanks so much. Thanks for your call. Nice to chat to you. No, thank you very much. Thank you. It's producer Matt here just jumping in to let you know that if you want to hear Martin's full podcast, where he explains everything you need to know about the rule changes with ICES and lifetime ICES, You can find that three episodes back from this one on BBC Sounds.

27:16Why not go and listen to it after you finish this episode? That was very interesting. What have you got for me next? I've got a read. Okay. A read from Phil. Phil's emailed in to martinlewispodcast at bbc.co.uk and he says, Dear Matt, Simon, and of course Martin. Okay, put me at the end. I like it. It's funny. He says, I have what I thought would be a simple question, but I'm struggling to find an answer. I have a family member who's approaching 40 and has no national insurance contributions as they've never worked, claimed any form of benefit or had children. Assuming this continues and they fail to achieve 10 years worth of contributions or have bought 10 years worth.

27:55My question is, as they don't qualify for the state pension under current rules, what would they be entitled to, if anything?

28:02Martin Lewis:OK, really interesting question. I'm going to answer under current rules. Obviously, this individual won't be reaching their state pension age for another minimum 27 years. So, things could have changed in that time. You are quite right. There is a hard bottom and a soft top when it comes to the state pension. What I mean by that is, when I talk about how many years you need to of national insurance contributions, for those who don't know, national insurance contributions are when you work, or as rightly pointed out, if you get certain benefits or if you look after children, you get a national insurance credit.

28:37Martin Lewis:I almost think of it like a token for each year that you work, you get a national insurance credit, a token that goes into the piggy bank. And I generally say you need 35 years worth-ish of national insurance to get the full state pension. But it really is an ish. For some people, it's more for some people that's less. And just because you've got your full state pension entitlement doesn't mean you stop paying national insurance if you're working and you're under state pension age, which people get frustrated about. But the bottom is a hard bottom because to get any state pension, you need 10 years of national insurance credits.

29:11Martin Lewis:And I went through this in a lot of detail when I was doing my campaign last year when you could buy back. I think it was 14 extra years. The window was shutting on that and there was a lot of urgency and talking about whether it was worth buying extra years. And in fact, we had someone who had nine years worth and wanted to know if it was worth buying and buying just one year. suddenly was hugely valuable and had a payback time of, you know, within three months of getting their state pension, they would have got back the money that they paid to buy the extra year because you go from nothing to effectively a third of a state pension or just under a third of a state pension once you hit 10 years.

29:44Martin Lewis:So you asked me what you would get. Well, you wouldn't get a state pension if you had under 10 years worth of contributions. If you had no income, and remember, income can be derived from savings. So if this person, I don't know why they're not working. If this person has a lot of assets, then the assets would be converted into a calculation to be income. Then the obvious thing for someone with no or very low income is pension credit. Pension credit is effectively a top up to any or no state pension that you get to give you a minimum income. So for people who have less than about£240 of income a week, including state pension and any private pension and any income from savings and investments, then they can get the pension credit top up.

30:31Martin Lewis:So my pension credit, interestingly, is actually a gateway benefit that opens up access to a whole other load of benefits. So I don't know the reason that this person is never working. If it's because they've got loads of assets and loads of family wealth, then they won't be entitled to pension credit. If they because... Well, I doubt it's because of health issues that they'd probably be entitled to certain benefits. So I have no idea what the issue is here, but my answer would be pension credit. I feel I'm doing it on a slightly theoretical basis, though, with the information that I have. Are you sitting there thinking, oh, I know what I wanted to ask him?

31:09Martin Lewis: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. Who have you got for me now? I have got a caller. Well done. Ben in Berry. Hi, Ben. Hi, guys. You all right? Hi, Ben. Welcome on board. Your badge will be flowing its way. It will be Ben in Berry with a badge at some point in the future. Oh, I can't wait. Bit of pride of Barry. What's your question? Regarding my dad, he's 78. He's on pension credits. He's got a smart prepayment meter. He keeps saying that basically he's putting more and more on the prepayment meter.

32:01And with the energy tariff going up, is there anything that he can do? He doesn't use much electricity. It's only about four kilowatts a day.

32:10Martin Lewis:Okay. So there are limited choices here. The prepayment market is much less competitive than the other market. So funny, we were talking about this in the podcast last week because I'd given evidence to the Public Accounts Committee on this exact issue. So just to set the big picture here, prepayment meters used to be more expensive than paying by monthly direct debit, which was always the cheapest. Then I think it was probably about 18 months-ish ago that they changed it. So now if you're on the price cap, you know, the standard rate, if you haven't got a special deal or you haven't got a fix or anything, prepayment is now a couple of percent cheaper than monthly direct debiting is actually the cheapest way to pay, which I think was a good move by the regulator because it is the one that the most vulnerable people tend to be on.

32:56Martin Lewis:However, it is very uncompetitive. So in most cases, especially if you don't have a smart meter, you are stuck on the price cap. And even though direct debit is more expensive on the price cap, if you pay by direct debit, that's where all the competitive switchers tariffs are. So, you know, the cheapest fixes on the direct debit are far cheaper than the prepayment on a price cap. So the first thing we need to look at is, is anything available? Now, you said he's got a smart meter. Yeah. That's useful. There's virtually nothing if you're on an old school meter for prepayment. There are occasionally smart prepay fixes available.

33:40Martin Lewis:There is one right now. It's EDF. It's fixed for a year on average, and it depends on the region, so you'll have to forgive me. I'm going to give you an average. On average, it's 5 % cheaper than the current price gap. Just to put that in context, the cheapest fix available for someone on direct debit is around 16 % cheaper than the price cap. So you can see the 5 % cheaper isn't that great. And it actually, whereas fixing that 16 % less than the price cap is a no-brainer because we think the price cap when it moves in October is going to stay roughly the same and the price cap when it moves in January is, it's a bit more crystal ball gazing, but it's going to stay roughly the same as the July price cap.

34:23Martin Lewis:so therefore the wriggle room you know if it's 16 % cheaper I mean it's it's pretty unthinkable that you're going to pay more over the year on the fix than you would do on the price cap a five percent it it's not quite a no it's not quite a no-brainer in the same way so that is roughly where we are uh how does that sound yeah to be fair I'm with EDS myself so I was sort of thinking of referring him and then he can he can get a bonus credit as well which might sort of see him through a few weeks as well well that's all right that's not too bad yeah there's how's his health by the way can i ask i don't mean it in is he yeah he's healthy he's got all like he goes on the he's got the social tariff for like virgin and sky and whatever so like we've sort of maximized that i was just checking whether he should be on the priority services register which is basically that if there are difficulties being had, it's not about price, it's about difficulties being had that he should be seen as a priority customer.

35:23Martin Lewis:If you know, for example, if he had difficulty reading his meter or if he would cut off and that type of thing. Sounds like he's all right though for that. He is, but that's definitely something we'll look at. It's something worth knowing for maybe, you know, as people age, you know, maybe in 70 or 80 years time when he's of a much older age, it might be worth knowing for that point, if you know what I mean. um so so yeah i mean it is very difficult on prepayment and again if i go back to the evidence session i gave this that which was meant to be at how you help vulnerable people with energy one of the big points i made is most vulnerable people are on the on the form of tariff the prepayment meter which is less competitive and therefore can't access the cheaper deals so we have yet again the poverty premium operating within energy on this basis um and i'm afraid i don't have much of a solution for you apart from that edf fix which sounds good with the money that would be coming in um but at least well i i can put i have been trying to do something about it in the bigger picture if not in the micro picture no that's that that's brilliant that's brilliant we'll look at we'll look at switching them over to that then yeah so make sure you do a comparison but then yeah once you know it's the right tariff get your get the referral fee that you get and hopefully you get paid and he gets paid and then you're both doing well yeah hopefully all right Good luck to you.

36:36Martin Lewis:Thank you so much for calling. Thank you. Bye. Just a quick note. Energy tariffs do change pretty much daily. So what I was saying in that was at the time of recording, you may be listening later. The same tariffs may not be available. So I would always go for this. I go on to a price comparison site. As I often say, I'd go to one that's whole of market by default. There is only one. I'm not allowed to tell you which one it is. so if you're not on that one and you're on one of the others what you must always make sure you do is there'll be a little box at the bottom somewhere that says as quietly as they possibly can show all tariffs so you need to tick the show all tariffs because many of the cheapest tariffs at the moment don't pay comparison sites so they won't be in their default search so make sure you do tick that.

37:28Martin Lewis:Okay, those are our four main questions, Matt. Now, this is normally the time where you give me an askance or a funny question. Yes. Have you got one for me? I wish I could sit here and say yes, but I have to scour in the inbox for hours and hours and hours. I could not find a single one. The inbox isn't that big, is it? The inbox is massive. We get loads of emails. I'm very I'm so pleased to hear it. I never see it. OK, look, listen, people. You're letting young Matt down. The man has spent... I mean, I'm worried he'll lose his hair. I'm worried for his health. The stress. I mean, just imagine the panic he has coming to this podcast, ready to produce it, and he has to say, no, Martin, we don't have an askance.

38:11Martin Lewis:We don't have a funny. And he's worried. He's worried, you know, there might be physical violence. I mean, admittedly, he's not that worried as he records in Manchester and I'm in London, so it would be a little bit different to do. But in a metaphorical sense, there might be physical violence. I hope not. For him, not really. Oh, right. I'm trying to get them to... I'm trying to encourage them to question. Sorry, carry on, carry on. Sorry. Right, and so... But I don't blame Matt, listeners. I don't blame Matt. I'm blaming you. You know, you come each week, you listen to the podcast, you get your answers, you enjoy the banter, you feel you're part of the team.

38:44Martin Lewis:Well, if you're part of the team, where are your askance and funny questions? That's what I have to say to you. So question time listeners, my esquires, to all my esquires listening, you've let us down this week. We need your funny. We need your askance questions. We need you. We need you to be part of our team and help feed in to what we can feed back to you. Have I done enough? I think so. All right. How do they send them in? Just email to martinlewispodcast at bbc.co.uk and address them to dear Martin. Dear Matt. and put, this is my askance funny because I knew you were short. And hey, you will be an Esquire.

39:22Martin Lewis:Or maybe you come on to ask it in person and then you get a badge, even though it's not a money question. Imagine that. So not only am I uplifting you, I'm bribing you at the same time. So what are we going to finish with then? Well, I have a nice success that I thought we could do. Okay, good. I like it. I love a success. Love a success. This one's been sent in by Flavio, I think is how you pronounce their name. How do you spell it? F-L-A-V-I-U. Yeah, I'm leaving that one to you. Flavio Esquire. Nice. We know how to pronounce Esquire. We do know how to pronounce Esquire. They say, Dear Professor Lord Dr Matt Esquire.

39:59Missing a few there, but I'll take it. And Martin OBE. You're not an OBE, are you? CBE. But I mean, now I know why you like the success,

40:07Martin Lewis:because it starts with Professor Lord Dr Matt Esquire. Exactly. It's how to get my attention. they go on to say you asked for more personal experiences in the pod we did actually just a reminder on that this is about personal experiences and also responses if you have something that helps one of our questioners and you've heard a question and you've had a similar experience then get in touch on the back of those we'd love to hear that as well as your questions please yes we would they say so I finally thought it was time to write in with my repeat successes as a long time listener your embrace of the nerdy side with your wife help me lean into mine when dating.

40:43I know. I can't wait to tell Lara that. That's amazing. Wasn't a success with everyone, but my partner responded to it instantly. And now it's all over our joint life. She's a better listener, but doesn't know I'm sending this in. We're all in with time of use tariffs, running around using maximum electricity in cheap times. Our typical usage is five to seven kilowatt hours a day, but our record is 25 kilowatt hours on a windy Saturday in April, for which Octopus paid us 91p.

41:10Martin Lewis:So for those who don't know, if you're on the Octopus Agile tariff and it's only for sophisticated users like Flaviu who understand what they're doing, I mean, last week during peak times, it was four times more expensive than the price cap. So you really have to understand it. But during some other times, they can pay you to generate electricity. I've seen it up to nine pence a kilowatt hour. In which case, everything you've been waiting to do, you turn on. I mean, if you've got an electric vehicle charger, it's time and your car's time it's like call up one of your friends hi do you want to bring your car around to my house and charge it because you're being paid to use energy because it's instead of shutting the net off in the surplus times that they do it that way.

41:50Martin Lewis:So carry on I'm loving this carry on. During expensive times we just go on impromptu dates instead of cooking nominally we're 19 % down on the best one year fix when we started a year ago. Brilliant. Yeah you could get batteries too and really ramp it up as well if you've been saving yeah you'd really have to think about it though, wouldn't you? Additionally, between us, we've stacked up roughly£2 ,800 in switching bonuses over the past year, all going into our honeymoon pot. So that's bank account switching and there are loads of bank account switching bonuses and deals available at the moment.

42:19That's really cool. They then say, which brings me to, we're getting married in August, MSE, marital success expert. Love it. Love it. And huge congratulations and Mazel Tov from me. A bonus, they say. Last year I managed to buy my mum seven extra state pension qualifying years for about£600, taking her from£9 to£16, enough to actually qualify for state pension. That one felt good.

42:41Martin Lewis:And how much does that fit in? That was not planned. That fits in with what we've already been talking about this programme. This is the best email ever. Thank you very much. They finished with, thanks for everything. Your show has touched more aspects of my life than I ever expected. Lovely to hear that. I found that quite moving, actually. Thank you so much. We get so many. I was joking before about telling everybody off and not sending in the funny questions. We get so many lovely emails and questions. And it is joyous to feel a part of people's lives and to be able to do something that helps people in this way.

43:13Martin Lewis:It is a wonderful thing. I am very, very lucky to have my job. and I am also lucky to have Matt alongside me and Claire here in the studio fact-checking me live as we go and I think that is a really good way to end. Ooh, it was. It was. Did you hear my peroration? I'd finished. Yeah. I was all ready to go. Badge update. Badge update. Yes. Badges. So if you come on the podcast, you get a badge. You can call yourself an Esquire if we read out your question but if you come on the podcast, you can also call yourself an Esquire but you will get sent a badge and these badges are badges that I designed and I think they're fantastic.

43:51Martin Lewis:I still haven't seen it yet because as you will have heard, Rosie's away, Claire is sitting in for her, Rosie went to Manchester, she's got a bag of badges but I haven't seen Rosie since she got back from Manchester so that she can give me my badge. Rosie is badge hoarding. I have to be very careful how I say that. Rosie is a badge hoarder. Hoarder, yes. Hoarder, yes. So I had an email from someone who came on the podcast, Joe. They say, hello, Matt. So it was just sent to me. I just wanted to let you and Martin know that I just returned home today after a lovely week in Portugal with the family.

44:27What would normally be a depressing return has turned around by the arrival of my Squire badge, which has really made me smile. Thank you so much. I enjoyed listening to the latest episodes by the pool. Our first badge recipient. How lovely.

44:39Martin Lewis:Love it. And I'm glad you had a good holiday too. She sent a picture with her thumb and then the badge in the picture. What a lovely, uplifting way to end. Let's stop it there. 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 put out a new Question Time episode 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 please send in your questions. just email martinlewispodcast at bbc.co.uk and address them to Dear Martin, Dear Matt, Dear Martin, Dear Matt.

45:16Martin Lewis:We do like doing that. And don't forget, if you come on the show, you'll get an exclusive Money Can't Buy Martin Lewis podcast question time batch. Who wouldn't want that? That's a rhetorical question, by the way. Bye.

45:43Martin Lewis is the founder of money-saving-expert.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.

46:35attempt to go viral on the internet. But it all started when he gave a homeless man$10 ,000. So is he a philanthropist reshaping capitalism? Or is he just the king of the attention economy? Find out on Good Bad Billionaire. Listen on BBC.com or wherever you get your podcasts.