The cheapest way to spend abroad, stop paying to pay! And find old pensions worth £10,000s!

26:10And before I even mentioned the word Jaffa Cakes, he said, yes, just like Jaffa Cakes. I said, what? He said, I worked on Jaffa Cakes and that was happening in the 90s. Basically, he had to do the calculations on the updated Jaffa machine for their factory that puts the Jaffa onto the Jaffa Cakes. Also, they wanted the Jaffa to be placed more centrally. It was the most depressing job that he's ever done. Oh dear, well I'm sorry for your husband but thank you very much and you did confirm in what you emailed that there was less Jaffa or your husband says there was less Jaffa put on a Jaffa cake therefore we know there was Jaffa shrinkflation I can't do it We had to give them a right of reply so we got in touch with the Jaffa the boss at Jaffa and it's McVitie's sent us this response that our producer page has voiced up for us.

27:10Like many manufacturers in the UK and around the world, we continue to see our input costs increase. Despite this, we are working hard to minimise the impact on our products and to keep our prices affordable. This is why we've made the decision to slightly reduce the weight of our Jaffa Cakes products, whilst ensuring each cake still includes plenty of our signature crackly chocolate and Orangey Centre. I do love that we have to do these right of replies. I mean, it's Jaffa Cakesgate. Everyone knows about shrinkflation. It's not like we're going, McVitties, you're the scourge of Britain. No other confectioner.

27:46I mean, that was the implication, that wasn't. Well, it has reduced it. So Jaffa Cakegate, we now have an answer. There is less Jaffa on a Jaffa Cake and less Jaffa in a pack of biscuits. But hey, maybe the price hasn't gone up and that's just a way of them hiding the fact rather than putting the prices up. Hey, I don't know what I'm defending. We had a full conversation on this. Shall we move on?

28:06Joanne, we have a Revolut card, which we use when we go abroad. Is this still a good choice? We'll be better off switching to a Chase card instead. So, a couple of differences. Revolut is a prepaid card where you load up the money in advance, as opposed to a card like Chase, which is a debit card, where you have the money coming out of your account when you spend on it. Revolut is probably the top pick of the prepaid cards. it gives near perfect rates Monday to Friday on up to£1 ,000 a month. There's a 1 % fee on weekends. The first five ATM withdrawals are free each month up to£200, then there's a 2 % fee after.

28:44So if you're doing it in the free periods, it's good. If not, well, it is beatable by a chase card. You can always have both. One advantage of a Revolut card, though, that you don't get on debit or credit cards is you can opt to get the exchange rate at the time you load money onto it. So remember, we talked earlier that with credit and debit cards, you get the rate at the moment you spend. With a prepaid card, you have a choice, with some of them anyway, that you can get the rate at the moment you load up. So you might say, I'm going to put 500 quid on it today. The euro rate looks good to me.

29:18I'm locking that rate in. And then you've got all your euros when you spend on them at that rate. Now, clearly, the problem with that is rates can go up and they can go down and nobody knows. or you'd be making billions of pounds on the foreign exchange market as to what was actually going to happen. Yet locking in a rate, the benefit is if you go, actually the euro rate looks pretty good now, I'm going to lock in at that rate just in case because that would make it affordable for me and I'm going to close my eyes to what happens afterwards because I'm doing it a bit like fixing on an energy tariff or a mortgage.

29:49I'm going to fix my rate now because it looks decent and I don't care what happens afterwards because this is a decent rate. That's not a bad idea. Or you could hedge your bets. I mean, here's an idea. You've got a Revolut card. You're asking about a Chase card. You could get half of the money you need for your holiday on a Revolut card locking in the rate now. And the rest you could do spending on your Chase card at the perfect rate on the day. If the rate gets worse meantime, well, at least you've locked in half at the better rate. And if the rate gets better, half your money is at the good rate.

30:17And that's a way to hedge your bets. There is no perfect answer there. Revolut is probably the best rate prepaid card, though. More on the Costa Rican currency. Yes. Somebody's texted into correct our pronunciation. Cologne. No, I don't think it's that. We're not to pronounce it like a digestive organ. It is cologne. Cologne. Not colon. Okay. Okay. Cologne. Cologne, but that's not as fun. No, but if you do go to Costa Rica, then, you know, you don't want to upset people by asking them for colons. They're colognes, or that won't be the plural, I suppose. I think I'm going to... You asked me before, and I think it's the Dominican Republic Peso.

31:00Okay. I'll get Suze to check that out. But I may be wrong. I may be wrong. That's what I'm going for. Shall we do... Actually, a number of people have texted it. Dave in Northapton and John in Lincoln, and someone's been in touch with you as well. When you take money out of a cash point abroad, it says, do you want it in your own currency, effectively? Do you want it in GB pounds? Or do you accept our rate? This is one of my golden rules. Okay, so let me do why first, and then I'm going to do a very, very plain, easy way for you to remember this. What's being asked is, who do you want to do the conversion?

31:40If you pay in the local currency, because you have a pound account, if you pay in the local currency, your card will do the conversion because you've paid in euros or whatever it is. if you pay in pounds that machine or that shop that cash machine or that shop will do the conversion so that's your choice do i want the conversion to be done by my card or do i want it to be done by the overseas machine now we've talked about specialist uk cards if you have a specialist uk card the whole point is it gives you a near perfect exchange rate so why on earth would you want somebody else to do the conversion when you have a guaranteed near perfect exchange rate on your card.

32:21In other words, the answer to that is paying the overseas currency. If you don't have a specialist card, you're going to pay a 2.75 % exchange rate fee. You may also pay cash withdrawal fees, but you'll pay them anyway, even if you change it into pounds. And I have done copious amounts of experiments and films abroad where I've gone. I mean, many people go abroad and they do a pub crawl. I go abroad and I do an ATM pub crawl. And genuinely, I mean, it's not as exciting a life, but I have done this and I always do it. I have never found an overseas ATM or shop that gives as good a rate as a bad credit or debit card in the UK.

32:59So even the bad ones, the non-specialist cards are giving a better rate than the conversion you get abroad. And there's proof in this. You know, when you go abroad and it says, would you like us to convert the currency? If you say no, it says, are you sure? If you don't, we can't be responsible. when you say no and they go, are you absolutely blooming sure? You don't want us to do the convergences? Seriously, are you crackers? They're not doing that because it's for you. They're doing that because they make a lot of money if they do the conversion. So the golden, solid, locked in, don't risk it unless you have a lot of research that is above and beyond what I've ever done and never seen in all the times I have ever done it.

33:37Always pay in the local currency. If you're in Europe, pay in euros. If you're in dollars, pay in dollars. If you're in Costa Rica, pay in colons. Yes. If you're in Vietnam, pay in... Er, forgotten. Dong. Dong, that's right. And if you're in the Dominican Republic, you pay in Dominican peso. Pay in peso. That is the answer. Always, always, always pay in the local currency. And if you are in a shop... Brits, let's band together abroad. If you are in a shop, and I've done it myself, and I have seen a Brit who's ahead of me being asked, do you want to pay in euros or in pounds? And they say, I'm like, euros.

34:20I'm answering for you, euros. Sometimes if they don't know it's me, they might think it's a bit weird. If they know it's me, then they've got a story to tell. But I can't cope. I can't cope with the concept of people paying in pounds abroad because it is just a mistake. Hopefully that answers your question. Now, just to interrupt this podcast, because you had so many holiday money questions, I wanted to answer more. But I'm no longer with Adrian. I'm now with podcast producer Matt, who's standing in for podcast producer Simon. Hello, podcast producer Matt. Maybe I'll just call you Matt. Hello, hello.

34:48Thank you for having me back again. So what have you got for me? Right, some more questions. First one, Catherine is asking, my 17-year-old is going on holiday to Greece next week with her friends. They're all 18 and using cash cards, but I think they're only for over 18s. Can you advise the best way for her to spend her money there, please? She's got a Santander bank account with a debit card and I'm worried about any charges if she uses it abroad. Depending on which Santander debit card depends, whether it does or doesn't have charges, you'll have to look that up. You're looking for the non-sturning exchange rate fee and ATM charges.

35:20Assuming it is not a card that's a specialist overseas travel card, there are some easy options for you because there are cards available, prepaid cards for kids that also have near-perfect exchange rates. So probably the easiest one to get is a Hyperjar card, which is a free card if you use the virtual card. but if you want an actual hard card, then it's a£5 card delivery fee. There can be small fees if you top up over 10 times a month or you top up for less than£10, but most people won't do that. It's available for 6 to 17-year-olds. The parents must download the free app. I know she's 17, it's not such an issue, but you can get this at age 17.

35:56It gives near-perfect exchange rates on spending, although you can't withdraw from cash machines abroad on it. There's also similar, the Nationwide FlexOne debit card as part of a children's bank account for 11 to 17-year-olds, and that does give fee-free ATM withdrawals as well. Under 13s will have to apply in branch with a parent. 11 to 17 year olds can apply themselves. And there's the Starling Kite free prepaid card as well, but parents must have a Starling current account. If your child, and so this is generic, probably not for your 17 year old daughter, but if your child has a GoHenry prepaid card, which is a fee paying card that you'd have to say you have to pay£4 a month fee, then that is also near perfect exchange rates if you use it abroad if you already have one of those and Revolut customers you can get your child a Revolut under 18 prepaid card which gives near perfect exchange rates but only on up to 500 pounds a month and fee-free ATM withdrawals up to 100 quid a month so there's a whole host of different cards out there that you can use and you can give to your kids if you're going abroad because obviously just like we tend to be moving towards a cashless society for many people when they travel.

37:05Children need access to the same thing. And if you want to give them their spending money when they go abroad, especially teenagers, these cards are the way to do it. There is Richard. He's asking about haggling. Richard, hello. Welcome. You have a holiday money question for me, I believe. What is it? Martin, I wanted to know, do you think it's easier to haggle with cash or card while you're abroad? And should that influence people's choices when they're planning? So where are you thinking of haggling? So we're clearly not, you're not talking about going to a supermarket in Spain. Well, I'm thinking Spain, but I'm thinking more of the market stalls.

37:38So look, generally you often find people will haggle better in cash, you know, but it is always a case by case situation. I wouldn't let me influence how I do it, though. If I were going to haggle in Spain in a market, I would probably get myself a specialist card with perfect exchange rates. When I was there, before I went to the market, I'd go to an ATM, I'd take my cash out of the ATM at those perfect exchange rates, and I would use the cash for haggling there. I wouldn't just take cash in advance. So I would always be going with a specialist card. Does that make sense? It does, yeah, yeah.

38:14But as for the haggling, I mean, it just depends on the sophistication level and what they want. And frankly, I suspect the tax regime, if we're being honest, because one of the reasons that paying in cash is often cheaper in some areas is because people aren't paying tax on it. So you might also say it depends on your your ethical idea of what the taxation situation should be, which I'm not going to ask you on air. Well, as a fraud investigator, I'm always keen to pay my tax. Oh, are you a fraud investigator? OK, so then. Well, it's a really interesting one, isn't it? what the haggling derivation.

38:46But I think sometimes having the cash ready there, even as a prop when you're involved in haggling in these type of places, you know, and wherever in the world you are, having that I'm ready to pay, I've got the money to pay, but I only want to give you this amount can be very useful. But I wouldn't let that put me off getting a specialist card. That makes sense. All right. Thank you for calling. Nice to chat to you. Thank you. OK. Helen is asking, she's going to Thailand and she needs to pay in the local currency. She wants to know the best way to change money. Get it from an ATM or take Sterling and change it while she's there in the resort.

39:19So I think you've probably got the best and the worst option there and you've missed out the middle option in those three. Now, I have to say that I'm not talking specifically for Thailand as I don't know the situation in Thailand. I'm talking more generically if you want cash when you go abroad. The best way to do it is on a top specialist card. just getting your money out of a cash machine once you arrive and making sure it's one of the top specialist cards that doesn't charge you an ATM fee will generally be your winner because you're getting that near perfect exchange rate. Of course as I've already mentioned you are therefore somewhat at the mercy of the fact that exchange rates move so do you take it out at a good or a bad moment but there is no way to know that.

40:00My second option if you want cash would be to go onto a travel money comparison site in the UK before you go and to find who is giving you the best travel money rates. Now certainly changing at the airport is bad and high street rates aren't that good but there are a couple of travel money comparison sites out there that you can use which will tell you who's giving you the best exchange rates for the currency you want and the amount that you're using once you factor in all fees and the exchange rate. And that will generally be better than taking money abroad and changing it once you get there.

40:34Now, I say generally because it's very simple logic. When you go abroad, you're probably going to only have a very limited choice of one or two bureaus near you who will change the money for you. And therefore, it is not a particularly competitive market. Whereas before you're going here, if you go into a comparison site, you're comparing the very best rates from 20, 30, 40 different bureau de change agencies and the rates can actually have quite a big variation between them. So the cheapest will tend to be one that's trying to be top of that comparison site and therefore is giving special rates to attracting new customers and will give you a good rate.

41:10Now, that's not to say that there might not be somewhere in the world, a bureau abroad that gives an even better rate, but it's just, it would be incredible happenstance and luck if you happen to find upon it. Now, if you're going somewhere that you've been regularly before and you know there's a really good bureau de change and you know it has exceptionally good rates, I'm not saying don't use it, but that would take local knowledge before you went and a decent comparison to know if it was worth it. So use a card if you can. If you can't use a card, I would get the money before you go from the best bureau de change here.

41:46Only otherwise would I get it from the best bureau there. But just read me the last sentence, Matt, if you wouldn't mind of that question. So she said, what's the best way to change money at an ATM or take sterling and change at the resort? Now, I suspect from the resort, you're meaning sort of at the hotel. If you're meaning resort to mean a local town or area where there may be a few bureaus, that's one thing. If you're meaning resort because you're going on an all-inclusive place where it's a specific hotel or you're in a locked-in monopoly situation with the Bureau de Change and the rate will almost certainly be abysmal, as bad as changing at the airport, if not worse.

42:27So generally the worst place to ever change your money is at the hotel. Hotels are not Bureau de Changes and they do not give good rates. They charge you for the convenience of doing it at the hotel. So, well, I think I've been through it. Card first, comparison second, leaving it till when you get there third, but making sure that you're going to a good, decent local bureau, just not doing it in the hotel or the resort's own bureau de change okay sarah is going to dubai and she wants to know should she take cash or use a travel card dubai is virtually universal acceptance of plastic when you're there and i would take a specialist plastic travel card with me and if you need to get cash when you're there you just put your card in the cash machine and you get some cash out similar question nikki is going to cyprus she wants to potentially go cashless do you think that she should go cashless or she should take cash?

43:20I mean I can't see any reason unless someone has some specialist knowledge about Cyprus that I'm missing any reason that you couldn't go cashless in Cyprus they will tend to take cards and there'll be enough cash machines that you could take money out if you needed to get money when you got there as long as you have a specialist card giving you the great rate. And cruising, Sylvia is going on a cruise she's got a Revolut and she's going to use that when they're at port most of the ports are euros, but Norway is the krona. Am I pronouncing that right? Yeah, that'll do. Krona. Is it better to pay in euros there or krona, as I've been told they accept both?

43:55Well, if they accept both, I would tend to pay in the currency that they're pricing in. If they're pricing in both, then I would simply get online and go and do a conversion between the two to see if there's any difference. And whichever one works out to be cheaper when you do the conversion online into pounds. I would then use your specialist card and Revolut gives you near-perfect exchange rates, weekdays anyway. I would use your Revolut card to pay in whichever currency is cheaper. I simply can't know if they're pricing in both at a specific port that takes cruises, which one would be cheaper.

44:26But it's really easy to do. Just do a currency conversion at the time. Do you want to do more holiday or some Telus? What do you fancy? Let's do some. The Telus is amazing this week. The Telus is we often talk about the best wisdom from parents or grandparents, but let's go rogue. Luke, what's the worst financial information you were given by parents and grandparents? When was it and why was it so bad? And just some really interesting answers here. I've got the Axe ones, you've got the Facebook. Samantha, my dad telling me only the rich and wealthy go to university and it would have been free at that time.

45:00Oh, terrible, terrible lack of aspiration coming from that. Tommy, when I started work at 18, my dad told me not to bother with the work's final salary pension as it was a con. I ended up joining a pension, not final salary when I was 26, and now as a 43-year-old, frantically trying to catch up on those lost years. I mean, final salary pensions, they were the gold-plated pensions. Oh, Laura, my mum said, if you don't spend it, I won't give you any more when she realised I was saving my pocket money. What a moral hazard. I mean, you're actually rewarding your child for being profligate and not understanding about delayed gratification.

45:35Oh, Laura, hopefully. Well, the fact that you know it wasn't good for you hopefully means that you weren't fiscally scarred by it. Well, sorry for telling off all the parents and grandparents here. Go on, Adrian. Someone says they were told house prices are not going to keep going up as they have to come back down. And this was said in 1998. Yeah, and there is no law of gravity on house prices. They can come back down, though. Property is not as safe as houses, but they don't have to come back down at any period. Audrey, my parents said I didn't need a pension as I was a woman. I did pay for full state pension from 15, but the government kept changing the goalposts.

46:12Oh, dear.

46:15Another one else said they had advice to keep savings as safe, inverted commas, cash, rather than putting longer term savings into risky stocks and shares. But if your grandparent might have just been stung on something, and then that's where that's come from, and we didn't make it good advice. It has. The problem is, well, but that's, you know, that's confirmation bias. The fact that you've had something not go well for you doesn't mean it's wrong to do it in the future. Look, we actually have a massive British economic problem with this. And I'm partially to blame. I'm moving on to something slightly more serious.

46:49But I think it's an interesting discussion. You know, one of the reasons that the Chancellor is looking at reducing the amount of money people can put in the cash ISA potentially in the budget in September is to try and encourage people to put money in and invest more. And she wants to do that to invest in British assets. Whether people investing in an ISA are investing in British assets is another question. And I don't think it's the right way. It's not the right policy to encourage investing. But we have an attitude in this country that many people don't invest and don't realise that over the long term, the stock market will outperform savings.

47:18And I think one of the main people to blame from this is sitting opposite across the desk from you right now. and it's something I'm very conscious of and very aware of and I've been doing a lot of thinking about personal musing on. The reason is I cannot talk about investing because it is a regulated area and it is also not my expertise. I don't talk about risk products but it does not mean I am anti-investing any more than I'm anti-getting treatment from a doctor. I'm just not a doctor. It's just not my subject. I wouldn't talk about it but because I talk about savings a lot, which is my subject, People make the read that savings are therefore the right thing to do and investing isn't.

47:55And I've been trying to change and be, I mean, I've always said this, but I've been much more conscious in the last year whenever I talk about savings to put in investment as an option people should be looking at. Because, I'm sorry, I'm going to self-aggrandize here and that's not the point I'm trying to make. But as I've got bigger in the sector and, you know, I am the loudest voice by quite a substantial way in this consumer finance area. that means more and more people get the message about savings but not about investing and i don't have an investment person i wish there was an investment person out there who had a loud voice who could influence towards that and so i do think we have a critical problem here and i am concerned about the drop in the cash iso limit that may come because i think that's a mistake i don't think people will simply say well you're going to tax me on my savings so i'm going to invest it instead i don't it's like saying do you want a steak or do you want a coca-cola the two things aren't the same.

48:43But I think we do have to educate far more about investing in this country. Anyway, let's get back to the tellers. That wasn't the point. Actually, I do one. Claire. OK. My ex-mother-in-law's foolish wise words included, you don't have to buy a house. We were saving and could afford a mortgage. So why would any parent actively discourage it? And you don't have to have a pension. Decades later, her youngest son is turning 40 and has never held down a decent job. Maybe because he's had his mother telling him you don't have to. I'll say, get yourself an endowment mortgage. You'll get enough back to pay your house off and buy a luxury car too.

49:18Yeah, well, a lot of people actually, endowment mortgages were one of the biggest areas here, you know, quite often commonly missold. The idea it would clear your mortgage, it was a very lack of transparent form of investing in endowment mortgages. We could talk about that for details away. Jackie, my stepdad used to get cross with me when I told him I had something new as an adult. He would say, you Blairite children, you spend what you haven't got. I'd got double glazing to reduce the efficiency, the energy usage of the home, I presume, on interest-free credit. God rest his soul. Alistair, put your food shop and petrol on a credit card, then pay it off at the end of the month.

49:57Didn't pay it off. OK. The advice was good, though. The advice was good. But it's a very interesting one for me, because, of course, that's the get rewards and pay off in full philosophy. but I always talk about the risk of credit cards is you can only do this if you trust yourself and if you're if you're self-trustworthy you have to have and that has to be part of that discussion I love this from Fiona my grandfather sold me his car for its alleged market value after a mechanical incident caused an accident the insurance company told me he'd charged me half as much again as it was worth 50 markup to profit from your apprenticeship earning granddaughter valuable lesson learnt.

50:37Never trust dad or his side of the family. Sean says, when I was 18, my mum said, you're 18 now, that means you can get a credit card. I learnt so much from doing that so young. But again, you can't really say it's the wrong way. No, because, listen, and I had one in here somewhere where someone said their parents told them never ever to borrow. And have I got it? Talk amongst yourselves, everybody.

51:08never ever to borrow. And the problem with this, as I often talk about when I do education stuff for kids, is if you follow the grand parental wisdom of neither a borrower nor a lender be, well, that doesn't work in our modern world because if you're going to get a house, you're going to have to borrow. If you want to go to university, you're going to have to get what we call a loan. So a prohibition on all lending doesn't work because when you break that prohibition, what we haven't done is differentiated between good debt and bad debt. And there is good debt a bad debt. Most people listening will have had or have a mortgage at some point.

51:38Many people listening will have got what we call a loan when they go to university. And arguably done right, they are good debts because they're investments in your future and they can enable you to go on in life. Going and getting a payday loan for a holiday is a nightmare debt. So just what we have to do with young people is you put the prohibition is terrible because it's not going to work. It's not practical. Actually, we have to start educating about when you should get a debt, when you shouldn't get it there. Now, this is now in the national curriculum. Sadly, less than 50 % of schools follow the national curriculum.

52:08It is in the financial education textbook that I've provided via the Young Money charity that can people download. But it is actually a really important conceptual thing.

52:20It's time to play that theme tune.

52:29Yes, welcome everybody to Money Mastermind. The current score is Adrian has got 10 right and 17 wrong. You got the last one right. You're keeping your head above random chance water, which would involve only getting a third right. You're a little bit above that. Now... I'll settle for that. I've got low expectations of myself. You see, you hear the notepad clicking there, everyone. I don't know why I get it out. I just doodle anxiously. Now, do congratulate Adrian, listeners. He has won a very prestigious prize, drawn by random lots. The BBC Tech Department has managed to create the world's first time machine, and Adrian was selected as the first person to use it.

53:10He's decided to revert back to when he was 21 and just starting out in his career. He thinks he could probably do better second time around. Let's hear that time machine transition.

53:26GENTLEMENT Gentlemen, thank you very much. That's it for Match of the Day 2. Jolly, good afternoon. Welcome to Working Lunch. I'm Adrian Charles, the director of the... Good morning. The big boys in the personal computer. So, everyone, please picture a young, handsome, strapping, charming, whip-smart, keen young man with a West Midlands accent. I was none of those things. And sitting next to him is a 21-year-old Adrian Childs. You broke the joke. I'm sorry. Here we go. My question, Adrian. Does a 21-year-old starting full-time work, earning exactly£19 ,999 a year, automatically get opted into a workplace pension, including employer's contribution.

54:19So, does a 21-year-old starting full-time work, earning exactly£19 ,999 a year in that workplace, automatically get opted into a workplace pension? A, yes, indeedy. B, no, it's too young. C, no, it's not enough earnings.

54:41Well, I'm probably falling for a trap you've so skilfully set here, but the way you said$90 ,999 precisely makes me think that... I know you're setting me a trap, so I don't know why, but just to please you, I'm going to fall into it. So I don't think... Three options again. Yes, indeedy. Too young, not enough earnings. I don't think it's enough earnings. I think it's probably... I'm assuming there's a$20 ,000 threshold, unless you're just being naughty and saying all this$90 ,999, precisely, just so I can blonder. Blonder into it for your obvious amusement. Would I do that? Yes, you would. Would I do that only for my own amusement?

55:21Yes, you would. I think it's fair to say I would, but that doesn't mean I have. Yeah, well, that's my answer anyway. So your answer is C, no, not enough earnings. Okay.

55:34So, employers, employees who are aged between 22 and 66, who earn at least£10 ,000 a year are automatically opted in to the pension auto-enrolment scheme at their workplace, which means as long as they contribute a minimum 5 % of their salary, their employer will have to add 3 % on top. That is aged 22 to 66, earning£10 ,000. For those aged 21 or younger or 67 or older, state pension age or older, you are not automatically opted in. So let's have the uh-uh. The correct answer here was no, but not because of the earnings, because the threshold is£10 ,000, not£20 ,000. Yeah, that was naughty then.

56:22You shouldn't have gone on about that precisely. I didn't say precisely. No, you said precisely. We're going to have to play that back, because I think I just said£19 ,999 a year. I don't think I added the word precisely. Exactly. But that's how much they earned, and it's precisely how much they earned. It's not precise. So the answer here is they were too young. But there's a really important point in this question, as there always is. There are two points to the Masked Man question. One, so I can enjoy myself at Adrian's expense. And two, because there's an important money point that I need to make at the same time.

56:53As I've got a little bit more time in the podcast, I want to explain it in some detail. This is actually really important for many younger or older people. For those who are aged under 22 or over state pension age, you are not automatically enrolled in your employer's pension if you are working. The default setting is to be opted out of pension auto-enrollment. However, what not everybody knows is you can choose to be a part of it. And in possibly the majority of cases, your firm cannot refuse you. And let's remember, what we're talking about with auto-enrollment is not just that some of your salary goes to pay for a pension.

57:37it's that your money goes to pay for a pension and your employer must add on top. Now the way the minimum contribution works, although firms can do more, is it's an 8 % total contribution going towards your private pension of which you put in 5 % of your salary and your employer puts in 3 % of your salary, well up to a certain limit, just over£50 ,000 of earnings any way that is. Now the thing to understand about a pension, an auto-enrolment pension, is effectively everyone who is in it is getting a pay rise as your employer is giving you extra money you would not have otherwise got, even though that extra money is not immediately usable.

58:18It's also worth saying everybody who is in it will get less take-home pay because to get that extra money you're saving from your current salary so your disposable income, the amount you can spend each month, is reduced. But in general rules I always say to people do not opt out of your auto-enrolment pension if you're automatically opted in because you're getting that pay rise and it's an incredibly lucrative way to save towards your old age. Now, when we're talking to those who are aged under 22, specifically aged 16 to 21, the last day of your 21st birthday, if you earn over£6 ,240 a year, now remember in the question I gave Adrian, it was someone earning around£20 ,000 a year, you can opt into your pension and your employer must by law do those matching or semi-matching contributions it must put money into your pension as well so if you're a 21 year old earning 20 grand a year let's say you might be living at home with limited expenses you probably have you know relative for your age and life status that's a huge amount of disposable income And the important thing to understand about saving to a pension, the earlier you start, the better.

59:34In fact, there's a rule I have. Take the age when you start contributing to your pension, halve it, and that's the percentage of your salary you want going into your pension for the rest of your life to have a decent retirement, including your employer's contribution. So if you start at age 20, you're talking 10%. If you start at age 30, you're talking 15%. Start at age 40, it's 20%. So if you're a 20-year-old earning 20 grand a year, absolutely get your 5 % in, get the 3 % added on top by your employer, and it is a really good head start in life that you should be looking at. Now, for those who are the other end of the scale, you're over state pension age and up to age 74, you have the same rule.

1:00:14If you earn over£6 ,240 a year, you can contribute and opt in to the employer's pension, and it must contribute too. And in many cases, that's not a bad idea as long as you have the money to do it. So that was the real reason for the slightly technical question I gave Adrian. There's such an important message. I always talk about those who are automatically opted into their pension should generally stay there. But there are many people who aren't automatically opted into their pension because of their age who might want to consider it too. Crucial information and worth talking to any young people you know about that one.

1:00:47Adrian, though, back to the time machine. You're back to how old are you? Old, 58 and a half. You're back to 58. And I'm off to Glasgow, man. Woo! Woo!

1:00:57That's it for this week. If you enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. We tend to put a new episode out every Thursday. Do subscribe to keep up to date and let your pockets be pleased with you. And if you haven't enjoyed it... I got meals. I gotta pay. So I'm gonna work, work, work, work every day. I got now. I got to feed, so I'm going to make sure everybody eats. Martin Lewis is the founder of moneysavinexpert.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.

1:01:41The 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.