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The Martin Lewis Podcast - Episode Summary
Episode Title
Unpleasant Issues Help: Free Wills | Power of Attorney | Inheritance Tax and More
Episode Overview In this episode, Martin Lewis addresses the importance of financial planning in the face of life’s unpleasant realities: death, divorce, and dementia. He discusses essential financial documents such as wills, power of attorney, and inheritance tax, providing listeners with valuable insights and actionable advice.
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Key Topics Discussed
- Importance of Planning for the Three D’s
- Death, Divorce, Dementia: These are critical life events that require careful planning to protect oneself and one’s family financially.
- Wills: Discusses the significance of having a will, particularly concerning guardianship of children in case of parental death.
- Power of Attorney: Emphasizes the importance of having a power of attorney in place, arguing it may be even more crucial than a will for financial management if one loses their capacity.
- Child Trust Funds and Access for Individuals Under 22
- Individuals born between 2002 and 2011 may have unclaimed Child Trust Funds, often amounting to around £2,212.
- Listeners are warned against third-party firms that charge high fees to access these funds when individuals can do this themselves for free.
- Wills and Writing Them
- Discusses options for creating a will, including free or reduced-cost schemes such as Free Wills Month and Will Aid Month.
- Encourages listeners to update wills regularly, especially after major life events like marriage or divorce.
- Power of Attorney
- Describes the difference between lasting power of attorney (LPA) and general power of attorney.
- Stresses that without an LPA, families may face lengthy and complicated legal processes to manage finances for individuals unable to do so themselves.
- Inheritance Tax (IHT)
- Clarifies common misconceptions about who needs to worry about IHT; only 4% of estates pay it.
- Explains exemptions (e.g., leaving assets to a spouse or civil partner) and the basic thresholds for tax-free inheritance.
- Discusses strategies to minimize IHT through gifting during one's lifetime.
- Family Finance Management
- Warns against having one partner manage all family finances without involving the other, as it can lead to complications in the event of death or incapacity.
- Advocates for regular discussions about finances and keeping clear records of assets.
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Listener Engagement
"Tell Us" Segment Listeners shared stories about items they purchased for under £5 that brought them joy. Highlights include:
- A £1 Acer tree that grew for 22 years.
- A £3.50 toy horse that became a cherished Christmas gift.
- A £5 suit purchased from a charity shop that continues to be worn with pride.
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Key Takeaways
- Have Difficult Conversations: It is essential to address uncomfortable topics like wills and powers of attorney to ensure financial preparedness.
- Utilize Available Resources: Take advantage of free or low-cost will services and understand how to access funds like Child Trust Funds.
- Educate Family Members: Ensure that all family members are informed about financial matters to avoid complications during challenging times.
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Conclusion Martin Lewis emphasizes the importance of financial literacy and preparation, urging listeners not to shy away from planning for life's unpleasant realities. By tackling these issues head-on, individuals can protect themselves and their loved ones, ultimately leading to peace of mind.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01BBC Sounds. Music. Radio. Podcast. Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's all going to be about. Now, usually much of it comes from my BBC Radio 5 Live show with Adrian Childs, but there's bonus money-saving tips just for you lucky, lucky podcast listeners. And this week, it's all about unpleasant conversations. Nope, not just Adrian and I chatting as normal. It's about protecting yourself financially and your family financially from the three Ds. Death, divorce, dementia. Jolly, eh? So, in this week's pod, two of the big free or cheap will schemes are open for bookings right now.
0:41I'll talk you through what you need to know. Why power of attorney is arguably even more important for you to get than a will. The key need-to-knows, done quickly, don't worry, about inheritance tax. Are you hurting rather than helping by taking charge of the family's finances? A warning for those aged under 22. You may have two grand you don't know about. A beautiful tellers about the most joy you've ever got from spending under£5. And we got to the last one, thank heavens. Hidden in this week's mastermind is an important lesson for anyone who pays for car insurance. Let's get on with it. Play the theme tune.
1:40So before we started talking about unpleasant conversations, Adrian and I had a difficult conversation about how we were going to have a difficult conversation. So it's the antithesis of everything you're about. You're the opposite, the absolute apotheosis of not putting your head in the sand. Totally. Whereas everything you do is about not putting your head in the sand. The rest of us, to a lesser or greater or complete degree, have our heads in the sand. And this is, and stuff like wills, inheritance tax, powers of attorney is possibly, and debt, obviously, but, you know, it's the best example of that.
2:18And it's fatal, isn't it? Well, I'm going to... Pardon the slight pun. Something that I'm going to come on later, I might. Maybe I'll just do it now, actually. Look, it's the most difficult one, and I've written about this this week and I remember when I was writing about it thinking, oh, people who just... Who'd look after your children if you died? If you've got children and they're under 18, who would look after them if you died? And I've said this to friends in the past because I'm really jolly and they sort of look at me askance like, why would you say that? Now, part of this is personal.
2:50People know. I lost my mother just before I was 12. Thankfully, I didn't lose both parents. And what normally happens if your parent dies is responsibility for under 18 year old children passes to anybody else with parental responsibility. Mothers automatically have this. Most fathers automatically have parental responsibility. There are some nuanced cases where they don't. So if you have another parent around, that child is going to pass to parental responsibility. If there's nobody left with parental responsibility, so both parents have passed, or there isn't a father around who has the parental responsibility, they will check your will for who you've named as legal guardians.
3:30So it is important to make sure it is in your will. If not, the court decides. Not you. The court decides who'll look after your kids. So, I mean, to take your example of putting your head in the sand, it is one of those issues that nobody wants to think about. And I'm not going to cover life insurance today, but life insurance is all part of that. What would you do financially if the main breadwinner lost their life and was no longer able to earn money? And all of these are horrible to think about, but they are so much worse if you haven't thought about them and it happens. OK, so you have to think about, well, who is a difficult conversation?
4:12Because, you know, in a couple, you know, logically, you think in terms of siblings of the parents. Of course. But then you might have competing siblings apart from anything else. One sibling might be offended. I mean, there's a whole host of reasons to put off having this conversation. Look, it's very difficult, and I have it. My wonderful wife, who is a very sensible woman, Whenever I broach this and I said, you know, talked about updating wills or doing stuff like that, she just gives me a lot. And she often she often gets upset about it of like, why do we have to? And she knows why. I mean, and we do it.
4:48But I'm much more blunt and prosaic. I see this as a part of your standard financial management task to, you know, like insurance. We all have insurance which we pay for in the hopes we'll never claim on it. Well, doing this is in the hopes that these issues won't happen. but there's always the potential that it will. So that's why I'm calling it unpleasant issues chats today. And here's the rule. We're going to deal with it bluntly and unemotionally. I'm not saying you shouldn't be emotional about it but we have to get it done. So we're just going to talk straight and we're going to call death, death.
5:21We're not going to beat around the bush and we're just going to use straightforward language because that's the best way to do it. Okay, before we get into that, just to let people sort of brace themselves, don't run away. You've got a warning for anyone aged under 22. I do. So anybody who was born between the 1st of September 2002, which is aged 22 now, to the 2nd of January 2011, and of course it could be your kids, which is aged 13 now, was given a child trust fund by the state, which is a form of tax-free savings account. But what was crucial about those periods is the state started it off with money, Normally£250, in some cases£500.
6:05So every child born between those dates, so age 13 to 22 now, had a child trust fund. And you can access it when you are age 18. Now, the stats show 671 ,000 child trust funds for the age group who are now 18 to 22 haven't ever been touched. OK, so this wasn't an opt-in thing. You got it. You got it. Everybody got it and you got money in it and it would have had interest and it would have or it would have had investment because it could have been investment or savings. And the average amount in those 671 ,000 accounts have never been touched is£2 ,212 now. Now, why am I doing this right now? I've been spurred to do this because there are third party claim forms, claim firms, especially on TikTok, trying to charge people 350 quid to access their money or 25 percent of the savings to access their money when they are doing absolutely nothing for you.
7:09These firms are not doing anything that you cannot do yourself absolutely simply. So I just want to talk people through what you need to do. Look, if you know what firm it is, it's easy. Contact the firm. If you're aged over 18, you can take the money out. And we could talk another time about what you do with it. What do you mean, the firm? So the government opened them with a firm? Yeah, it might be a savings. Well, or your parents might have chosen where it was at the time and forgotten about. It could be a savings or an investment provider, a bank or investment company. Right. You know, NatWest.
7:36OK, so you're that age and you want to know what your name is. And you want to know what it is. So if you know who it's with, you can access the cash. Right. If you don't know who it's with, go on to gov.uk, the government's website, put in the search box child trust fund. And as long as you have your national insurance number and you know your date of birth, which I think most people will, you then put your details in there and within three weeks it will get back to you and tell you where your money is. And that's how you locate it. And all the firms that are charging you 350 quid are doing is exactly the same thing.
8:11So you do not pay anybody to do this. So if you know anybody, especially between 18 and 22, it often will be your kids. You might have forgotten the child trust from yourself. They have this money. By the way, some people have a lot left due to investment performance. It might only be 500 quid. Some people will have more. But my big message is do not pay anybody to access this cash or give them a cut of your savings because there's a really simple tool on the government's website. And it isn't just me. The HMRC itself has said... I'll do it in an HMRC voice. Third-party agents are currently advising their services across social media.
8:48They're offering to search for child trust funds. These agents always charge. Using an agent can significantly reduce the amount received. It is likely to take longer, and customers still need to supply them with the same information they need to do the search themselves, which is their way of saying... That sounds a bit Pathé News. Was it? I was sort of doing... A bit 1950s public information film. Yeah, that's where I was going. But the point being, don't pay anyone. Go and get access to your own cash. And then you might want to put it in a lifetime ISA, which gives you a boost of a first-time saver.
9:18You might put it in a cash ISA or in a top savings account, or you might need the money to pay off debt. But it's your money. Make sure you get all of it.
9:28So, on to difficult conversations now. Let's talk about wills. Lisa wants to know, what's the best way of making a simple will? Write it myself, use a charity, get a charity, write it for me, use a solicitor. Contacted a couple of solicitors to write my mum's will, or they wanted 350 plus VAT. And Kenny says, my wife and I have been together for 15 years, married for seven years, neither of us have a will. This is something we've been discussing recently. What's the best way to go about it? Well, the reason we're doing this Unpleasant Issues chat today is because two charity schemes currently provide them either for free or cheaply.
10:04and the gold standard for writing a will, because there can be disputes in a will, is to get a solicitor to do it for you and in both these schemes, these are solicitor drafted wills that you can get. So let me talk through the two schemes. The first one is free wills month. Free wills month. It's not that easy to say that. I don't know why. It's a bit of a dunk, isn't it? Free wills month. It happens. Free wills month, ironically, happens twice a year. Do you want to have a go? Can you do it? I'm enjoying your mouth shapes. Can we call it FWM then? Even that's not easy to say. So Free Wheels Month happens in October and March each year.
10:44And each month, October and March, covers different locations in the UK. So at the moment, it's on in Liverpool, Manchester, Belfast, Birmingham, Bristol, Cardiff, Newcastle, Swansea, and many more. You need to go onto the website to see the full list. If it's not on where you are right now, it will be on in March. Now, with Free Wills Month... Oh, that was better when I went quiet. Yeah, you're getting back. What happens is a solicitor will draft the will for free. It covers a single will for anyone aged 55 or over, or a mirror will for couples... Now, mirror will is where basically you both have the same provisions.
11:19It's pretty obvious that the word does it. Where the wills are near identical, as long as one of you is aged 55 or over. You've got to book your appointment by the end of October, but places get booked up pretty quickly, so I would get on with it. but the appointment itself can take place after October. And then why do they do this? Well, it's organised on behalf of Age UK, Alzheimer's, British Heart Foundation, Marie Curie, Minds, Samaritans and more, in the hope that you will leave them a bequest. That's money in your will. It's typically suggested you leave£300 to£500 in your will, which is very different to paying for it now.
11:51It's not compulsory to do that, but these are charities, so if you can, please do. The second scheme, excuse me, is Will Aid Month. Much easier to say, I'm pleased. And you can book for that now. Now, that's for anybody of any age. In practice, you have to be age over 18. You have to be an adult. It's a much bigger scheme. It runs across the UK. It's open to everyone. With Will Aid, you are asked to make a suggested donation to a charity. A single will has a suggested donation of£100. so you know you were talking£350 if you're doing direct. And Mirror Will has a suggested donation of£180. The donation spread across seven charities, Age UK, British Red Cross, Christian Aid, NSPCC, Save the Children, SEIF and Trocare.
12:37If you can't afford it, you can give less, but this is not something you should gain. If you can afford it, pay for it. If you can't, you can give less. WillAid is already open for bookings, which must be made by the end of November, but again, it books up quickly. so if you want it, do that. There are other ways to do cheap wills, by the way, but I think these two schemes, because you get the best possible, which is a solicitor drafted. I mean, clearly, this is for relatively simple circumstances. If you've got a£15 billion multi-share empire, you're going to have to pay for a will and they're not going to upset you, but for most people, this will work.
13:13Solicitor drafted, which is the gold standard, it's absolutely the way to go and therefore, I would suggest people get on with that. A couple of will tips while we're here. you need an up-to-date will. A will is not good enough. You need an up-to-date will, especially if you have got married. In England, Wales and Northern Ireland, not Scotland, wills are often revoked when you get married, so you'll need a new one. And the other big point I want to talk about at wills is for unmarried couples. Now, when I say unmarried, I mean you're not married and you don't have a civil partnership, which is legally akin to marriage, even though it's a slightly different thing.
13:48If you are unmarried, Well, in law, it basically means diddly squat. That's the best way to think about it. It's irrelevant. You may have been together for decades. Everybody may know you're a couple. You may have 35 children. In law, it means diddly squat. So you need, if you want to look after your inheritance, either to get a will or to do some form of contract or do a civil partnership or get married. I mean, that's what you need to do to protect your assets. And if you don't, you could end up with a battle royal over your estate. Well, you could also find that your partner who you've lived with for years doesn't get your house, right, and can't stay in the house.
14:23And we'll talk inheritance tax later when marriage is important. I'm just going to read you because I like this and I set that up because James Byrne's gone in touch with me. My wife agreed to marry after 17 years of me asking and being engaged. 17 years of my asking and one word from Martin and she agrees. This is the power you wield. Nice to know she married me for financial reasons. So there you go. Excellent. See? How romantic. That's beautiful. Is Stephanie in Worcester with us? Stephanie, are you there? Yes, hi. How are you doing? Fire away to the great man. Thanks, Martin, for taking my call.
15:02Pleasure. I currently have a joint will with my husband, but we're now separated. So if I make a new will on my own, does it override that will? And if so, what happens for my husband? and does he need to make a new will as well, or would the joint one still stand for him? Go on. Sorry. Well, what I'm going to do at this point is I have, for exactly this type of occasion, because it's a legal question, not a money question, I have Pauline Oliver on the line, who's founder of Oliver's Legal Services in Doncaster and a former gladiators contestant. So I'm going to let Pauline answer that rather than me.
15:40Hello, Pauline. Can you take that question? Random. Love it. Hello. Thank you. The legal gladiator. The legal gladiator. Yes, yes, that is I, that is I. So in answer to your question, so are you saying that you are married? Yes, we're still married. We've been separated. We're not legally separated. He's left the marital home about 12 months ago now. OK, so if you, because you are separated, if anything happened to you, then your estate would go to him because you've got the same wills. So what you would need to do is to update your will to reflect the fact that he's now excluded. And then I would also advise to put a letter of wishes next to that will explaining why he's excluded.
16:28Can I just ask you, Pauline, a couple of points on that? When you say to update your will, does that in practice mean to do a new will? That is correct. It needs to be a complete new will. OK, so it's not really an update. It's actually you've got to do a new will. What do you do with the old will and what is the situation with her husband? Because if he doesn't update his will, does that mean everything goes to Steph? Right. So it needs to be a completely new will. If the husband doesn't update his will, then that means if anything happens to him, his estate will go straight over to Stephanie.
17:07So Stephanie also now needs to write the new will to exclude him with an exclusion clause and the letter of wishes, explaining the reasons why. And let me keep tattling you, Pauline. Yes, please do. Would this technically have been any different if they had got divorced? Would the same situation stand, or would divorce have changed it in law somehow? Yes, it would have changed. It would have changed because they're divorced. And therefore the will would no longer be valid and they would have to do a new will anyway or they would die in test date. Is that correct? They would die in test date. So if they got divorced, so intestacy to say to everybody are the rules of where your money goes if you haven't done a will.
17:49And there are different ones in England, Scotland, Wales and Northern Ireland. The state has a prescribed solution of where the money would go. So what I want to know is they have a joint will. Somebody has a joint will and this isn't Stephanie. They have a joint will. They then get divorced. They haven't made a new will. Yeah. Does the joint will still apply or is the joint will invalidated because they've got divorced and therefore they go on to the intestacy rules? Yes. So that is a complex question, which I think I would need to. We'll come back to you on it. Don't worry. We'll come back. I'll give you a bit of time to do it.
18:28Steph, does that answer your questions? It does. And I was going to ask the question about what happens if we get divorced before I got around to making a new will. So I'll continue to listen to the programme to get the answer to that. Hopefully that's from Pauline. Perfect. Well, definitely. But the most important thing, you need to get on and make yourself a new will. I would look at one of those two will schemes and get on and do it. And an expression of wishes is sort of, it's the soft stuff around. So when you do a will, you have the formal bit and then you have the letter. The carriage clock.
18:56Yeah, who's getting what and why I think this and how I feel and what I'd prefer to happen. And it's a sort of more, the conversation piece, if you like. The letter of wishes, even though you do put one in place, it's not legally binding. However, if somebody was to challenge the will and they saw the letter of wishes and the judge saw it, then he would take it into consideration. So it's sort of strongly evidential as to what you were thinking at the time that you wrote the will. Yes. Now, through the magic of podcast editing, let's fast forward through time, because now we've got an answer to the question about what happens if you get divorced.
19:38So, Pauline, the question was, if someone has joint wills and then gets divorced, is the joint will, or mirror wills rather, are the mirror wills then invalidated so that they now go to the intestacy laws if they haven't written a new will? or would the joint will still stand? Right. So thank you for that, Martin. So the joint will, as soon as you get divorced, if the executors was a spouse, then they would automatically be revoked and the rest of the will would stand. So any gifts, et cetera, would stand. So if you had a mirror will that said, let's imagine Adrian and I were a couple, he should be so lucky.
20:21So Adrian and I are a couple and one mirror will said, I want to leave everything to Adrian and Adrian's will said he wants to leave everything to me. We then get divorced. No, never. It was forever. You said it was forever, Mark. Deal with it, man. We want to get divorced, right? So we are now divorced and then one of us passes away. Regardless of the executor, would all of my stuff go to Adrian still? Yes. So if you've not updated, put a new will in place, everything would go to the new person. Everything would stay in the will as it was. I have left everything to Adrian. My sister is my executor, but I have left everything to Adrian.
21:07I have now died. We are divorced. Does everything still go to Adrian? And you haven't made a new will. We haven't made a new will. Then that would mean everything would go to Adrian. Fine. So I think I can clear this up. When you get married, that can mean that your will is no longer valid. When you get divorced, your will is still valid. So if you don't want everything to go to your former husband or wife, make a new will. Is that basically where we are? That's what I would say. Always recommend. You've got new circumstances, update your will. Get a new will put in place. Then there's certainty.
21:41Thank you so much, Pauline. Appreciate that. You should do some teloses. Yeah, we'd love to do this. What's the plural of telos? Is it teloses? I think it's Tel-Ai, isn't it? The Latin, T-E-L-L-A-I, or is that feminine Latin? It's Tel-We in the black country. All right, so tell us, what's the best thing you've ever bought for under a fiver in today's money? What made you happiest or exceeded expectations was just generally great. Now, normally you get Twitter and I get Facebook, but I have stolen one from Twitter because I liked it so much. And this is it from Steph, and it's got enormous numbers of likes.
22:20My mum spent one pound reduced from a fiver on a twig in a box in Woolworths. A little bag of dry compost tied to one end was the only way to tell which end was the root. I thought I'd give it a chance. And 22 years later, this Acer tree, and she's got a pic of this huge Acer tree with the most beautiful orange golden leaves spread out in a wonderful wide canvas. It must be about 10 foot tall. It's absolutely gorgeous. This Acer tree is the result, and it was beautiful. So what a good£1 for a twig in the box. I've got a similar one that came into the show. My wife has wanted a plum tree for years now.
23:02We've got a B on plum there, Al, but I'll let that pass. I think you mean a plum tree, as in plums. While visiting a local garden centre, she ran up all excited about a tree she had found, an RHS Queen Elizabeth plum tree reduced from£69 to a fiver. one very happy wife and free fruit to keep us regular. These things matter with age. Good job he had a sunroof. I mean, that's not for keeping regular. That's for, I assume, for having the top of the tree poking out of it. I've got this one from Sally-Anne that got 395 likes, which is only a little bit more than Harry Brook has scored today. I became a single mum 14 years ago when my husband left me.
23:41I was left with our then 18-month-old daughter, didn't have much money and spent£3.50 on a dobby horse that made a horse noise when you pressed its ear. That was the only thing I could afford to buy her for Christmas. I cried for days out of guilt. She's nearly 16 and still has it and won't part with it. She says it was her best Christmas present and it still works. Love it. I love this one. Bella says she bought some orange plastic picnic spoons for a pound that for some reason my then two-year-old nephew decided was the greatest toy ever and we spent months playing teaspoon cricket. He's now 13 and trying out for his county cricket team.
24:22I still have the spoons. Also, Scott says, I've got a potato peeler with orange string around the handle. Suspect it will outlive the human race as it never goes blunt. I've got a big thing about kitchen utensils. I've got a favourite spoon and everything, but I know what you mean about that perfect peeler. Well, one of my best ever buys, and it was more than Fiverr, so I can't say it in there, but I'm going to give now. It's got a plastic casing and a lid on the top, and then it's got blades underneath and a pull string. So you pull it back with a handle on the top. So like starting an outboard motor.
24:56Yeah, but it's only small. It's maybe, what, 15 centimetres in diameter. And you can put vegetables in there, and then you pull it back, and it speeds the blame round, and it chops them at super speed. I love it. I absolutely love it. I make amazing guacamole with it. I can chop up a salad with it. And whenever we've had friends... Well, how much salad can you get? I want one. How do you... Well, I don't want to give the brand name because it would be advertised. Can you still buy them? Yeah, you can still buy them. I think they're about a tenner. Right. It costs a tenner. And you pull it back and it does it so easily.
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25:30You don't need any processor. It's so quick. The guacamole is amazing. And my top tip, and when I've had friends round, they go, I can't believe you're going to put that in there. I put my guacamole, I put my garlic, and I put my lime. I put a little bit, because I saw this abroad and they had a beautiful burrata cheese that they put in the guacamole. But I just used like, you know, a cheese triangle. Put a cheese triangle in the guacamole. A Dairy Lee. I didn't say. I'm not doing brands. It could be any brand of cheese triangle. In a guacamole? In a guacamole. It's amazing. I hope we're not going out in Mexico.
25:58All right. You're going to be a world of... So anyway, so you pull this around and it chops it up. But literally, because I've had it out in the summer when people have come round and I made fresh guacamole because you can do it in front of them. And I have at least nine friends who've bought one since because they see it and they go, that's amazing, and they've bought it since. But we weren't doing mine. So I'll do one more. This is Simon. The best two quid I ever spent was on a boosted comment on a Mark Goldbridge YouTube stream. I think he's a Man United YouTuber. Right. And asked him to tell my 10-year-old son it was bedtime.
26:31He's his favourite football streamer. He still rewatches it and talks about it now. And I like this one. One more. I've got loads of these, but I like this one. Robin. I bought some washers from B &Q. I attached them with Blu-Tac to my letterbox flap, which had driven me crazy for years. Now there is silence during windy days. Simple things. I like that. Beautiful. There's one here from Nicola. A red smiley squeaky ball from Tesco's. It gives my dog such incredible joy. She's even swapped a rabbit she caught for this amazing ball, which you've slightly ruined it then, Nicol. It's become all sort of macabre.
27:11It's blood red now, isn't it? A dead or half-dead rabbit. And he dropped it for the squeaky ball. I mean, anyway, let's not go there. Let's just go back to the letter flap. Let's stick to the squeaky ball, shall we?
27:30we need to talk about power of attorney tell us why these are so important what i would say is in many ways i believe that power of attorney is more important than a will and the reason for that is if you die you're just talking about who your stuff goes to but if you lose your faculties the financial issues are often more urgent but less clear-cut who'll look after you who can access your funds to pay for your living and your care yeah who'll ensure your money is still working for you if you're no longer capable. And that's what a power of attorney is there to fix. It's not perfect, but in many ways, it's more important because losing faculties isn't just something that happens to the elderly.
28:08Accidents, stroke, early onset dementia, and more may hit anyone. And younger people have separate finances. So everybody out there, if you have dependents, I would suggest you look at a power of attorney. I'm now 52. I know on the radio, I look much younger, but I've had a power of attorney since I was in my mid thirties. And what fascinated me is I did a poll on my social media, 51 ,000 votes. Of those, 51 % had a will, but only 26 % had a power of attorney. And I can see very few circumstances where you're in the position where you should have a will, but you shouldn't have a power of attorney.
28:47I'll be honest, I can't really think of any. If you're a type of person who's got dependents that you're worried about, that you've got assets that you're worried about, that you've done a will, you should have a power of attorney as well. Now, what a lasting power of attorney does is it makes it easier for someone to take over your finances and financial decisions if you can't. And we've all got loved ones. Most of us have had loved ones who've had dementia and we've seen them disappear. And what you need to understand, if you don't have a power of attorney, then you're going to the dreaded court of protection.
29:19And I mean dreaded or the equivalent, the sheriff court in Scotland or the control of the Office of Care and Protection in Northern Ireland. But I'm going to go with the court of protection for now. And that's what you have to do to take care of somebody's finances if you don't have a power of attorney and they've lost their faculties. I cannot tell you the number of nightmares that I've had put to me, both in time and money, because people have had to go through there. David tweeted me. This is so important. My dad collapsed and suddenly was diagnosed with dementia. I had no lasting power of attorney, so I had to apply through the Court of Protection to access his bank accounts.
29:56It took nearly a year and all the while his two and a half thousand pound care phone fees had to be paid. So that's why we're talking about a power of attorney, because what a power of attorney does is it means you nominate a trusted friend or relative to look after your affairs if needed. This does not mean you are giving up control now. My lasting power of attorney does not mean my attorneys are in control. I'm in control because I still have my faculties. Now, if you have simple affairs, it is just a form. You have to pay for it. I accept that. It costs around£100-ish. The Power of Attorney form is available from the gov.uk website.
30:36Download it, see if you can understand it. If you want some help, which wills has a tool, which way you sort of, you put it in yourself and then a paralegal reviews. Or of course, again, the gold standard is solicited or drafted, but you're going to pay£300 to£700 to do it. But I mean, I'm sure people will get in touch. You've had terrible experiences without a Power of Attorney. Get it done. Get it in there. It is a massive safety protocol. it is a nightmare without. Hopefully there's a quick answer to this. Zoe has just found her current will is invalid now that her partner, that she's married her partner.
31:09They're going to update the will soon. Got me wondering, are our registered POAs now also invalid? Do they change once you go from being a couple to being married? No, it's a different thing. So your power of attorney shouldn't be affected by the fact you're married. Let's double check that with Pauline. Your power of attorney isn't changed by the fact that you've got married, is it? No, but what you would do is you would notify the Office of the Public Guardian that there's been a change of name and then send them the marriage certificate, etc. But if there's no change of name, though, there's no even need to do that then, presumably.
31:41Yeah, but you do need to just let them know. Let them know of a change of name, not let them know that you've got married. That's right. OK, thank you. Any more? Let's go to... Oh, Alison. Alison, Alison, how are you? Sorry to keep you hanging on. What can we do for you? that's okay my question is about general power of attorney right so we have a legal power of attorney set up sorry you mean a lasting power of attorney lasting power of attorney yeah we have one of those set up but obviously as you've explained that only comes into force when my mother is incapable. She is still capable, but struggling.
32:26Lives several hundred miles away from me. So forgive me for dissecting this. I apologise. When you say capable, but struggling, you're saying to me, she has her mental capacity, but she just finds stuff tough to do. Is that what we're saying? But she is a good mental capacity to make decisions for herself. Yes. Okay, sure. Carry on. Sorry. So she has asked for help with banking. She doesn't understand online banking at all. Yeah. Obviously, more and more things need to be paid online. So she has asked for help. Yeah. Can't use the LPA. Because she still has her faculties, yeah. And it also says that three of us have to be present every time.
33:12Gotcha. Gotcha. So the bank told me to set up a general power of attorney, which we did. That's a very simple form purchased from various shops. Filled that in. The banks have accepted it with no issues and have given me online access to the accounts so that I can help. I can also keep an eye on the accounts because my mother has been scammed on more than one occasion. But one of the financial institutions came back to me and said, no, the GPA needs to be registered in exactly the same way as the LPA. Is that true? Well, I'm going to put that to Pauline in a second. Let me just do a glossary for everybody listening here.
33:56So I'm going to mention three different types of power of attorney. And we're talking the financial ones here. There's also a health and welfare power of attorney. We're not talking about that today, although it's very important. is just not the subject of this programme and podcast. So the lasting power of attorney was set up in 2007. That's the main one I've been talking about where you nominate somebody to look after your finances in the case that you lose your faculties. The enduring power of attorney was its predecessor. The lasting power of attorney replaced the older enduring power of attorney system.
34:28Yet if you have an enduring power of attorney and it's still correct, it would still be valid. There are some nuanced differences in operation between the lasting and the enduring power of attorney. But in a nutshell, they're there to do the same job. A general power of attorney is basically a form that says, I want somebody else to look after this for me. It's not about faculties. And in fact, if you were to do a general power of attorney, and I hope not, but your mum were to lose her faculties, then the general power of attorney would no longer be valid because it can't be valid once someone has lost their faculties from having been in place beforehand.
35:02So a general power of attorney, again, I mean, I could say to Adrian, I want you to go and manage my finances for me with this particular firm. I mean, I would never do that. That would be madness for me to do. But I could say that to Adrian and I could do it through a general power of attorney. So let's put the question to Pauline about does it have to be registered? Is general power of attorney something you cover, Pauline? We do do general power of attorney documents. They need to be fined and witnessed by the person that's given the authority over. And they do not need to be registered. general power of attorney are in place, I normally put them in place, pending the registration of LPA documents at the Office of the Public Guardian.
35:41So then, I mean, I think you need to go back to the bank and ask them why, but this could be... I mean, there are some institutions that don't deal with accounts that have lasting power of attorney and general power of attorney. That may well be the problem. It shouldn't be an issue, but that could be it. I think you're going to have to go back to them. Which provides... Who was it? Can you tell us? An investment company. It's an investment company. I mean, some of them are just pains in the bum with dealing with this. Yes. OK, Alison, thanks very much for that.
36:13Do I need a calculator? You do not need a calculator. So, welcome to Money Mastermind. For those who don't know, it's a question that we put forward. Adrian's current record is he has two right and one wrong. I think I'm going to equalise myself. Rather impressive. Yeah. Now, they say the car reflects the man. So none of you will be surprised to hear that Adrian drives a mud-brown 1989 Volvo estate with go slower stripes. It's a Maxi, actually. Sorry, Austin Maxi. I'll go with what you're saying. The nearest... I'm very pleased with this next line, by the way. I'm not sure I should say that in advance.
36:47I think you shouldn't telegraph that anyway. The nearest he's ever... Dude, it's making me laugh, though. The nearest he's ever got to a spoiler on his car is when someone wrote in the dust on his back window who had won the second series of The Traitors. very good I was pleased with that very good thank you very good now it's time for him I'll be your straight man you don't have to do this for yourself I'm so happy to do it for you Mark anyway go on now it's time for him to get his car insurance thankfully all those years on consumer programmes has helped and he knows not to auto insure instead he went to a new comparison site targeted at people just like him called I've no enthusiasm for this but know I need it dot com
37:32I very much enjoy writing this There he was shocked to find This is the important bit now There he was shocked to find It was offering him A substantially cheaper quote From exactly the same firm As his current insurer With exactly the same policy So you've got your renewal But you're going through a comparison site Same firm, same policy is cheaper You with it? Yep So, Adrian, what I want to know is in that case, which of these is your legal right? A. You can require your existing firm to lower your quote to the same as the comparison site because the law says existing customers must be given the same price as new customers.
38:15B, you can do similar, but you must first renew your existing policy, then ask it for a refund of the difference, because the law says existing customers must be given the same price as new customers. C, nothing. It is allowed to charge you a different price to that of a new customer. I would worry it was option three I suspect it's option two but I'm going to go for option one I'm going to be positive and think that the law is framed like that So you're saying that you can require your existing firm to lower your quote to the same as the comparison site because the law says existing customers must be given the same price as new customers No, change my mind I'm going to go for the second one So you have to buy it first and then you get the difference back.
39:07OK, so that's option two. We've locked that in. That's your final answer. Right. Now, a couple of years ago, they did bring in the loyalty penalty war to ban price walking, which is where what happens is each year you stay with one insurance firm and it walks the price up a little bit far more than it would charge a new customer. So after five or six years, you're paying 60 or 70 percent less, which is why I always say don't auto renew. And that law is in place now. So the general principle is existing customers should not be charged more than new customers. The general principle is the operative bit here.
39:45So before I go on, can I play the uh-uh? Oh, have you got it? It's meant to be an uh-uh. I don't like that noise. We need to get the old noise back. Anyway, this is the problem. And this is what everybody needs to understand because I get a lot of questions about this. The same price for new and existing customers rule is channel specific. Now, what that means, for example, if you got insurance direct from the firm, your renewal must cost the same as a new customer going direct to the firm. If you got your insurance via a specific comparison site, then your renewal must cost you the same as a new customer going via that specific comparison site.
40:29Not going via a comparison site, going via that specific comparison site. Now, I frame this question, if you'll remember, you went to a new comparison site. So by definition, you could not have been an existing customer of it before on your renewal. And therefore, the new and the existing customers being charged the same as new customers rule does not apply. And this gives insurers some wriggle room. One, it means they can put specific offers through comparison sites, which means a comparison site can be cheaper than the direct renewal because they don't have to offer their existing customers direct renewals.
41:03And two, they could vary which comparison site year by year they're giving special deals to so that the renewal customers only have to be given the same price as those who went through a specific comparison. So loads of people get in touch with me and say, I thought they'd got rid of this rule. I've got my renewal quote, but I found it so much cheaper on a comparison. Why are they charging me as a new customer, much less than as the existing customer? because the rule is channel specific. Make sense? Yes. So am I missing something? I mean, it's annoying, but why not just go with the new quote through the new comparison site and just get it done and don't trouble yourself with wrangling with, annoying though it is.
41:44So you're absolutely right. And of course, that's what you would do. But in practice, my point is in principle, my concern about this new rule where it was promoted that existing customers can't be charged to new customers is it's given people a false sense of security that their renewal is there for a good price because they think, well, it's the same price as a new customer would get. And people are shocked, because they should do a comparison anyway in case your existing insurer is not the cheapest for you. But people are shocked when their existing insurer is cheaper on a comparison site because they thought that rule had changed.
42:14So it's not about the practicals. It's about the, I want to get rid of that false sense of security that you have out there that I don't need to go elsewhere because I know my renewal company at least will be giving me the same price as a new customer coming to it. Well, only in a channel-specific way. And it is still massively important to go and do a cross-market comparison, use more than one comparison site, add in the likes of DirectLine who aren't on comparison site, because firms have ways around those rules and jemmying those rules. Do some tellers. Let's keep it easy. Tellers. Go on then.
42:49What have you got? Stacey, my teenage son recently spent£1.99 on a sink plunger when out with his mates, apparently because they thought it was funny. I've since used it to easily unblock two sinks and one toilet. That was value for money. That was value for money. My 1970s albums, All Cost Under a Fiver, still give me immense joy. Stevie and Martin was very specific. It has to be£5 at today's prices. It does. We can't allow that. No, but it's nice anyway. But it's still nice, yes. Jane, a ticket to a charity barn dance almost 30 years ago when I met my husband. Absolute game changer and bargain.
43:21Oh, I like that because so many people will then do the joke at the end, it was the worst thing I've ever done. I like the fact that you're still, 30 years later, still smiling and happy in your relationship. How lovely. Debbie says, I spent£3.99 at Etsy on a small flat plastic stand for my electric toothbrush. It's such a nothing type of item, but it makes me so happy every day to be able to stand my toothbrush up without it toppling over. Small things. And Alan from Barnsley says, Adrian Martin, My best buy was only a couple of weeks ago, a pair of kids' football socks for two quid. The result was my seven-year-old grandson, Theo, being able to be a flag bearer at Oakwell.
43:57She was screened live on TV, so all the family and friends were able to see him for free. Absolutely marvellous. Wonderful. Need to check what the result was there. Hope they didn't let you down, but that does sound like a bargain, I must say.
44:14Now, we spent so long talking about things in the main radio show, I've got lots more I want to talk to you about on unpleasant issues. Now we're in the special Only For You podcast listeners bits. I'm going to talk about inheritance tax and what you need to know about that later. But I'm going to start with a warning about the family finances. I talked about the three Ds, death, divorce and dementia, and we haven't done much on divorce. And while the story I'm going to tell is actually involves people who lost their partner, exactly the same applies in divorce. This is all about whether looking after the finances can hurt your partner as much as help them.
44:52Now, I've told the story before, but it sticks in my memory like glue. I'd once done a talk and three women came up to me afterwards. They were all in their 40s to 50s. They weren't together, but by coincidence, they were one after another in the queue to see me afterwards. Each told me they'd recently lost their husbands and they were desperate. with very similar words saying, I just am in dire straits and I do not know what to do with the finances. And what happened is their partners had hoped to ease their wives' burdens by becoming the chief family finance doer, if you like. But in their case, the kindness was a curse because doing that in all their cases left them inexperienced and ill-equipped for the solo responsibility once their partner had gone.
45:43One of them, whose husband was willless, was struggling even to access his money to pay for the mortgage. Now, this isn't about gender. It works any way round that you like. It can happen in any couple and it can be dementia or divorce caused as well as death caused. So let me be plain with you. I'm not against one partner being the chief family finance officer. The real issue is the doing it all. And the worst, and I've heard this many times, is I know nothing about my finances. is my partner does it all. And it said with a smile, like, isn't that great? And I think, no, it's awful. You're not being equipped.
46:17You're not educating yourself in case one of those three D's hits. So let me give you my quick tips. Number one, the chief family finance officer, and let's be honest, you're likely to be listening to this podcast by definition because you're the one who does all of this stuff. If your partner doesn't understand what to do, sit down, do a beginner's briefing on the family finances for them. They may even resist it saying, oh, I can't be interested, you do it all. But you need to make sure and be blunt that they are in a position that it would be not so stressful if they had to take over because you couldn't do it.
46:51If you want, blame me. I don't care. Number two, create a financial fact sheet. That's where you list all product providers from roadside recovery to investments, from boiler cover to bank accounts. Keep it somewhere safe, easily accessible, but without too many security details on it, just in case it get nicked. But that way, if your partner had to pick up from you what was going on, everything that they need to look at and deal with is in one place. And number three, well, kitchen table catch-ups. Every few months, have a discussion with them about what you're doing, what's going on, so that they continue to be briefed on an ongoing basis of the latest financial situation.
47:28It's not that much work to do for you and it can massively improve their ability if, heaven forbid, one of those 3Ds hits. And I would love to know if you've tried that, if you do it and what your method. Do get in touch at martinlewispodcast at bbc.co.uk.
47:49Now I've got podcast producer Simon with me. Simon, we've got so many tellers this week. Let's do a few more of them. What have you got? We've got this one in from Chris. A Kylie Minogue CD, greatest hits, discounted on Amazon. Music for a lifetime. Fun, joyful, never gets old. I should be so lucky. Yeah, that much joyful, that's the fiver.
48:11Sarah, in around 1977, I bought this doll for£5. My mum was cross and said it was a waste of money and it wouldn't last. And you can't see the image, but it's one of those dollies that you pull a string and it sort of moves its legs and jiggles around. Still going strong after 47 years. We actually got sent in this voice note from Jade. Hi, Martin. My name is Jade. My best buy for under£5 was some Winnie the Witch books that I bought from Vintage for my son who's autistic. They have given us so many laughs, so much joy, and I have to read these three books over and over again, and he is now asking for the whole set, And if I hadn't have bought those three, then we wouldn't have experienced all of those things.
48:59So it's really special to find something that he likes so much. Oh, thank you so much for that, Jade. And of course, Joy From Your Children is absolutely priceless. That's lovely. Jade Olson, doesn't she have a great broadcasting voice? Yes. I sort of got drawn away from that the moment I heard it. I almost couldn't listen to the story because I was thinking, what delicious tones. I wish I had tones like that. Let me do another one now. Karen, I gave a wee boy£5 to buy his mum flowers last Valentine's Day. He was only about three and was insistent, but the mum said not this week. So I asked if she minded if I gave him the money.
49:32I just love that when most kids, they want sweets, but this little one wanted to get his mum something pretty. I've actually got one here that really resonates with me from Pinocchio Princess. I bought my second daughter a bunny rabbit for 50p for when she was being left for the first time with my parents. That bunny has gone to bed with her every night since and he's now 32 years old, falling apart and looks terrible, but the best 50p ever spent. So in their 30s, falling apart, looking terrible. I know exactly how that rabbit feels. I thought you were going to talk about your new little one and what they had as a comforter.
50:04It's amazing what they pick up as a comforter. You can never quite work out which one is going to be the one that they actually latch on to. And then once you do, how old's your... 11 months old, yeah. So currently she's got a lot of things that are comforting. Okay, but you know the rule. as a parent of a now 11-year-old, not 11-month-old, whichever one she latches on to, go and buy another two or three of them immediately. The number of times... We left ours on a bus one time. I ran after that bus. I didn't catch that bus. It was devastating when she was about four. Oh, I still have nightmares over it.
50:37Jenna, this week I discovered Caramac has been reintroduced and they have Caramac button share packs for a pound. I was devastated when Caramac was stopped. Therefore, I was over the moon to see these in the shops again. Maybe not what you were after, but it definitely made my life happier that day as an impulse buy. Jenna, it's exactly what I was after. And not only that, I have a similar. I remember, I'm actually just emotional just thinking about it. I remember when I was a little boy and I'd go with my mum and we'd go to, it was Boots, let's be honest. And one of my treats that I loved was the little rolls of Horlicks tablets that you can buy.
51:14I never liked Horlicks the drink, but I loved the tablets that you could chew. And they were discontinued for years. I looked around the world to see if I could find them because it was very evocative for me. And then last year they brought back Horlicks tablets. You couldn't buy them everywhere. I think it was in B &M that you could buy them. And I went and I bought about 10 packs and I still have them and I have them stored properly so that they're not going to go off. And I often just have, I don't have many of them because a lot of sugar in them. I just have one of those Horlicks tablets and it takes me back to being a little boy from a bygone time.
51:45And it's quite beautiful. And they don't cost very much either. So Jenna, absolutely. If you love your Caramac and it makes you happy, you enjoy it. Let's do a couple more, shall we? Well, yeah, I'll tell you what, I'll do mine. Because you mentioned my daughter. About 10 years ago, before I started messing about making podcasts, I used to be a teaching assistant in Special Needs High School. And there's a story called The Animal Boogie that I loved reading with the kids. And then when my daughter was born, I thought, I'm going to get it. And I found it on, I think it was Vinted on Facebook Marketplace, one of those sort of places for less than a fiver.
52:15And she's too young to really kind of engage with the story, but she quite likes the rhythm of the music as you sort of sing it to her. And we sort of sit there together and reading it. And it is like the most magical moments in my life. Enjoy it. They grow very quickly, as everybody my age will tell you. I'll do two more, then we'll stop. We're all getting all melancholy here. This sort of fits what we were talking a moment ago. So Debs, I lost my childhood teddy bear when I went travelling age 19. Bereft doesn't come close. Just after I had my daughter 12 years later, I spotted an almost identical one, Emmaus Charity Shop, Port Slade.
52:46The happiest quid I've ever spent and something I treasure. To finish Josephine, my husband needed a suit to attend a wedding. We were passing a charity shop and there was a suit on display in the window. It fitted in perfectly. Apparently it had been made for a gentleman and he only wore it once before passing away. the best five pounds I ever spent as he still wears it to church I quite like that I quite like the sort of circle of life story in there the renewal that it was made for someone and the clothes continue to live on and it had been given to a charity shop and then someone carries on and they wear it wear it for life I think there's a moral in there somewhere I'll let you all draw your own from it
53:27OK podcast listeners I said I wanted to talk about inheritance tax and I'm going to do it now with my seven quick inheritance tax need to knows. I should note that if you want more detail than this, we did a great podcast where I sat with a panel of specialists answering your inheritance tax questions. We did that back in June. It's one of the Not the Martin Lewis podcast. You can find it in your podcast app or on BBC Sounds. So need to know, number one, most of you shouldn't be worrying about inheritance tax as only one in 25 estates pay it. Only those at the higher end of the wealth scale are impacted by it.
54:024 % of estates paid it over the last year, though many, many more when I poll on this. Now, you know, 30 to 40 % of people fear it, even though most of those will not pair it at all. And you're going to understand why when I do the rest of my need to knows. Number two, anything you leave to a spouse is exempt. So you can leave whatever you want to your husband or wife and there is no tax on it. But crucially, this only applies to people who you have got married to in a legal ceremony or you have a civil partnership with in a legal ceremony. If you have been cohabiting and you are what they call common law husband and wife, or common law husband and husband, or common law wife and wife, you doesn't count.
54:43It has to be a legal marriage or legal civil partnership. Now, you heard earlier the lovely message from someone who got married or was getting married on the back of hearing me talk about this because it does have a real financial impact. I've got a less pleasant message here which shows you the importance but in a different way. I got a tweet of it. I'm not going to tell you the person's name. You'll understand why. My partner died suddenly two years ago. We were together 36 years, not married and no will. My children paid£97 ,000 inheritance tax. Luckily, several friends learned a lesson and have now all either married or made wills.
55:23Don't get caught out like I did. And just to say, if you're anti-marriage, and I know some people are, then a civil partnership is the legal equivalent without the baggage that marriage has, which some see as positive and some see as negative. Number three, if your estate is under£325 ,000, no inheritance tax is paid. You don't pay inheritance tax on the first£325 ,000. Now, your estate means all your assets, including property added up. So if you are worth less than£325 ,000, inheritance tax just isn't an issue for you. Number four, that is boosted by£175 ,000, up to half a million quid,£500 ,000, if you pass on your main residence to your direct descendants.
56:07Now that includes biological foster step, adopted children or grandchildren. So if your house and other assets are under£500 ,000, and you're passing it on, then inheritance tax is again not an issue. There is a caveat here that if your total estate is valued over two million quid, you start to lose this extra£175 ,000 allowance. You actually lose 50p for every pound over£2 million, meaning if the estate's over£2.35 million, you lose it entirely. Number five, this is the really important one. You can pass all of your unused allowance to your spouse. So if you left them everything, they could leave£1 million including a house with no inheritance tax, as that's your£500 ,000, your£320 ,000,£25 ,000 standard limit plus the£175 ,000 because you passed on your main residence.
57:04That's£500 ,000 and their£500 ,000. So you could leave a million pounds in total if you're leaving the house to your descendants and your spouse left everything to you. But again, a spouse is your married or legal civil partner, not somebody you are cohabiting with. And this, again, you're starting to see why when people hear me say this, they realise technically we need to get married or do a civil partnership if we want to prevent inheritance tax in those occasions. Number six, if it looks like your estate will be over your total allowance, either the 325 or the 500 ,000 or the one million, then inheritance tax is charged at 40 % of everything above that.
57:44So an estate worth£1.3 million, including the house, passed on to a spouse and passed on everything, so you have the million pounds allowance. If the estate is worth£1.3 million, you pay the£300 ,000 that is above the£1 million that's exempt, and you pay 40 % of that. 40 % of 300 ,000 is 120 grand. And finally, number seven, if you look likely that you will have to pay inheritance tax, then giving assets and money away while you are alive can cut or cancel it out. Anything you can comfortably afford to give out of your normal income is exempt from inheritance tax, though proving it can be tricky.
58:26Plus, there are a host of allowances, even if you're giving money away from your capital, your wealth. In general, the longer you live after gifting, the better. But for that, I would really strongly suggest if you want to go through all the gifting rules in details, you listen to that Not the Martin Lewis podcast from back in June on inheritance tax. And there we went through it in detail. I just wanted to give you, because it fits into the unpleasant issues conversation, the sort of broad brush of how inheritance tax works.
58:55okay and to finish today last week we were talking about the energy price cap has gone up 10 the energy price cap dictates the price that the vast majority of homes in england scotland and wales pay for their energy effectively if you're not on a fix or a special tariff you're on the energy price cap your bill has gone up i'm now calling the energy price cap a pants cap most of you should get off it. And just a warning that since we did the pod last week, at least three of the cheapest fixes have been pulled from the market and been replaced by more expensive fixes. If you are looking to do this in the short term, the sooner you do it, the better choice you have.
59:32The good thing about doing the comparison now and make sure you go to a whole of market comparison site by default, one that shows you all the tariffs and doesn't hide the ones that don't pay it, is when you do a comparison now, you are getting a comparison against what you're currently pay you need to be looking for a fix that's cheaper and there are many of them in some cases you can save up to 10 which basically means that you won't get the price rise that has just happened if you're on the price cap and interestingly even since doing the podcast last week the prediction of what's going to happen to the price cap has actually gone higher that it's going to cost more it's currently predicted in future than i thought last week and basically means over the next year on average it's thought if the current predictions are right and some of it is crystal ball gazing that you will pay pretty much the same as you are doing right now.
1:00:19So when you do a comparison against the current price cap, that's likely to be quite a true comparison of how much you will actually save. So if it says you'll save 300 quid over the next year, even though the current price cap only lasts three months, then the predictions show, well, it's probably likely you will save 300 quid over the next 12 months. So go and do it. Now, one of the reasons for picking this up is there was a question in last week's pod that I said I wanted to check out before answering. I've now got an answer. so let's do it. Simon read the question to me last week. Let's hear that.
1:00:49Sue asks, we've got our house up for sale. Should I still go for a comparison and fix our energy with British gas or wait until we move? So one of the reasons I wanted to check last week is this tends to be provider and even tariff specific. So I've done a little bit of work on that. And it's actually quite interesting because firms seem to do one of two things. They either say you can port the tariff with you when you move house. In other words, you can take it with you if you're moving house so that you'll then stay on that tariff in your new home. In which case, if you choose not to take it with you, you would have to pay an early exit penalty if they applied or if they don't allow you to port it, then they won't charge you an early exit penalty for leaving your fix if you're leaving because you move house.
1:01:37So it's sort of in one of those two camps. The camps that allow you to move it and would therefore charge you an early exit penalty if you didn't want it tend to be British Gas, EDF, Eon, Octopus and Utility Warehouse. The ones that say you can't move it but we wouldn't charge you an early exit penalty are OVO and Scottish Power. Again, I'm doing it at a provider level. It can be tariff specific, so always check yourself. The other part of the question that I was being asked is, if we don't take the fix, can the people who move into the house after us have that fix? Would they be forced to have that fix?
1:02:07What happens to them. No, when you move house, your old house goes put onto a designated tariff, which what that means is quite simply, it will be put on the standard variable, the price capped tariff of the firm who's providing the house. And it all starts again anew. So of course, unless you're porting it with you and bringing your old tariff with you. So that is how it works. And you can probably see why I needed to double check before I answered.
1:02:34That's it from me for this week. I do hope you've enjoyed the podcast. If you have, please tell your friends and why not get them to subscribe so you can keep up to date and your pockets will be pleased with you. And do, even though it's difficult, consider having those unpleasant conversations. Talk to those that you love and care about and that you want to protect about what you've got prepared or what you need to do in case the worst happens. Then if the worst doesn't happen, okay, it's just a wasted conversation. If it does happen, you've done your best.
1:03:26Martin Lewis is the founder of moneysavingexpert.com. But of course, other consumer and price comparison and 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. I got bills, I gotta pay.
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