Can Andy Burnham fix Britain's tax and financial headaches?

0:02Lee Boyce: Welcome to This Is Money podcast sponsored by Trading212. Download the Trading212 app today and open a cash ISA with promo code TIM to get the 12 month bonus promo rate of 4.51%. Terms apply. I'm Georgie Frost and joining me in Simon Lambert today is Helen Crane. And coming up, another one bites the dust. The UK will soon get its seventh prime minister in just 10 years. Have we become the political basket case of Europe? And what does it all mean for our money? Also today, fury over ISA reforms. Experts explain why Rachel Reeves' new tax on investors won't work. Plus, the Bank of England wants your help.

0:43Lee Boyce: Don't forget you start up to date with all the latest breaking money news. Just go to thisismoney.co.uk or download the app. But first, I am in Vienna this week. By the way, I'm covering the Consumer Goods Forum. It's basically where leaders from the world's biggest retailers and consumer goods companies, supermarkets, food manufacturers, household brands, you will have heard of them, come together and they tackle the biggest challenges facing the industry. And I'm here and I'm interviewing a lot of leaders about it. and I have to say, Simon and Helen, and I have to say, Simon, the number of readers of these major brands who are quipping, almost laughing at me when they hear my accent about our political situation after Sakia Starmer resigned this week.

1:33Lee Boyce: Well, let's just say it's not a good look for brand UK, nor a ringing endorsement for a country desperate for growth and for people and companies and investors to invest here. So this all comes, Simon, in the week, in case we've forgotten, the 10th anniversary of Brexit. Do you remember those days, Simon? We were on air and it was like dominoes watching everybody fall. But it feels like the dominoes are still falling 10 years later. What happens in Westminster inevitably affects our money both directly through taxes, etc. But there's a broader economic picture as well. Simon, what is going on with Britain?

2:16Simon Lambert: We are getting something of an international unwanted reputation. Yes. For being, the phrase that keeps bandied around is ungovernable due to our rotating cast of prime ministers. Obviously, for a big chunk of that, you need to blame the Tories because they went through most of them. We've also gone through a lot of chancellors as well. um and and that's that is an issue and the problem is is we're being seen as a country that cannot come up with a plan and then stick to the plan or has a number of competing plans running at the same time and we can't decide which one we're doing or we announce we have a plan and then we do things that appear to be the opposite of it and then instead of fixing them we sort of blunder on and then eventually we lose a prime minister and we get another one.

3:13Simon Lambert: All this government needed to do was be competent, more competent than the Tories, which was a reasonably low bar going on what happens at the end of that Tory administration, and deliver on its promises which were basically growth, competency, and generally making things better. Unfortunately, we are two years in, aren't we? We haven't really delivered on any of those things. Now, that's not to say that Keir Starmer hasn't done anything. He has actually done quite a few things and he has been pushing ahead with some of his plans. The broader picture is that we've kind of squandered the first two and a half years, the first two years of the parliament, I would say.

3:54Simon Lambert: We've squandered the bit where you get the opportunity. To talk in football terms, seeing as the World Cup's on, we've squandered the new manager bounce. In fact, we squandered the new manager bounce very, very early on when they started talking about black holes and then causing slight chaos and then raised national insurance for employers and things like that. And we've just blown it, really. It's like the Tories did have a bit of an excuse in that Theresa May and the Brexit scenario. So trying to get Brexit through was probably one of the hardest things that's ever been done in this country, because nobody could agree what it would look like there was a vote when we decided to do it but but it wasn't a vote on what it would look like there was just a vote on should we do it um and then it was like oh well what do we do now and there was warring factions and there was an incredibly difficult thing to get through boris johnson had covid to deal with again pretty unprecedented scenario and was brought down by a scandal albeit not the scandal that everyone wanted him to be brought down by he actually resigned due to another scandal.

4:59Simon Lambert: Keir Starmer, on the other hand, he's not done anything wrong. He's not been caught by a scandal big enough to leave office. He's been doing what largely what he said he was going to do. He hasn't delivered incredibly well on it. But I don't think that you should be allowed to have a general election and have someone stand as prime minister. And then two years later, they resign and you get someone completely different as prime minister, who may have completely different plans from the same party without having a general election. And I would have said the same thing under the Tories. This is particularly bad because there's no excuse.

5:38Simon Lambert: The party's just torn itself apart for the hell of it.

5:42Lee Boyce: Just look at, if you would, the legacy of Sakhir as Prime Minister. And Rachel Wears, you're absolutely right, said, you know, with a loss of Prime Minister, you tend to get the loss of the Chancellor as well, or change of chance that we've had many. I don't even know how many we've had. What has Sakhir done for our finances? What was the vision? If it had continued, where do you think it would have gone?

6:05Simon Lambert: The vision was growth and that we were going to improve all of our finances by returning the country to growth. The record on that hasn't been terrible, but it hasn't been great. Okay, our economy is doing okay. Okay at best. We are somewhat hamstrung by our substantial amount of debt and the interest payments on that debt. But as are lots of other major economies, we are paying a premium on that debt. Some of that premium is due to the fact that we're not America, so we don't have the dollar, we're not the world's reserve currency, and we're not a gigantic block like the EU. But some of it is, you know, the dreaded moron premium, the fact that we can't come up with a plan and stick to it and we keep shooting ourselves in the foot.

6:49Simon Lambert: But Keir Starmer and Rachel Rees would argue that they have delivered for those in society who need it most, in that they have kept it in a scenario where the wealthier are paying for the not so wealthy. But the Tories did a lot of that. Most of that comes from the Tories. The Tories changed us into an economy where a small number of higher earning taxpayers are paying much more in terms of the chunk of tax that gets paid than the lower earners. And the tax burden for the lower earners has gone down and the middle earner has gone down. the tax burden for the upper earners has gone up and the overall tax burden is near an all-time high but what i would say is that they've started movement on the house building and the planning stuff but again they've identified a problem but a long-term problem and not really it's very difficult to say they've identified the real problem in that they're just like well it's the planning system and if we just say builders not the blockers repeatedly we'll fix it and we'll sort out the planning system and then it'll all be fine what's actually happening is that house builders are not building houses because it's too expensive to build houses and they can't sell them at a big enough profit so they're reining in the number of houses they're building in order to protect their profits they don't want to flood the markets with houses and bring down house prices because they want to protect their profits what we need is more social housing and labor have been doing stuff on that but what it doesn't do is deliver more houses each year but in other places it's not been a great record on our finances as i said you know shortly after that we squandered the new manager bounce.

8:18Simon Lambert: There was the winter fuel allowance removal fiasco, along with banging on about black holes that then triggered months of uncertainty until the delayed budget came in. The government were warned people were pulling pension tax-free lump sums and they wouldn't be able to put them back and that if they weren't going to change something, they should just say something, but they refused to be drawn on speculation. Then the budget arrived in order to deal with the fact that they'd hamstrung themselves in their manifesto by saying they wouldn't raise income tax national insurance etc they decided to raise national insurance but not really raise national insurance under the manifesto promise in their eyes by raising national insurance on employers not employees that triggered problems in the jobs market at the worst possible time as the jobs market was slowing down anyway and ai was coming in and so on also raised the minimum wage which is good in that it gives more money to people on minimum wage but bad because it's pricing people out of employment it's caused havoc in retail hospitality basically areas where low paid people work so whilst low paid people are being paid more money there are less jobs for them we've then had a raid on savers in the form of increasing the tax on savings in reducing the cash ice allowance for under 65s.

9:41Simon Lambert: We've had a capital gains tax raid. The rates have gone up on that. And we've had a massive one, which is pulling pensions into the inheritance tax net, which is going to be absolutely huge for people who have defined contribution pension pots and have to save through their lives to build a pension in order to fund their retirement and are unlucky enough to die early before they've depleted their pension. and it's going to pull many more people into the inheritance tax net. People it won't affect are public sector workers with defined benefit pensions, however. And also it's going to introduce an element of double taxation for over 75s who could find that their unspent pension pots end up with 60%, 67 % plus tax on them.

10:25Simon Lambert: And again, repeatedly the government has been told about this. Repeatedly the government has been told it's a problem and the government's just sort of ignoring it. And we're back to this age old problem. What they haven't fixed is the bit where they listened when people said, OK, fine, but that's a problem. And then did something about it. Instead, it's blinkers on plowing straight down that route. They just basically continued with the same tax strategy as the Tories of just tinkering here, tinkering there. And it's just causing even more problems when what we need is a complete overhaul of the tax system.

11:00Simon Lambert: And they had a golden opportunity to do it. and they blew it it's basically not like watching england play football in the tournaments under southgate where we were really great and successful and we almost won it it's like watching england play football under all the managers that came before that where we we looked really good in qualification and then we turned up and we were rubbish yeah quite before we get on to the future

11:29Lee Boyce: because the great thing about the UK is you say they blew their chance, but heck, these chances keep coming because we keep having new prime ministers. So there could be another chance for a reset. But just quickly, how have markets responded to the news?

11:42Simon Lambert: Incredibly sanguine.

11:45Lee Boyce: That's kind of new, right?

11:46Simon Lambert: Markets priced in Andy Burnham as the next prime minister a long time ago. It was not a surprise. That was priced in a month ago or whatever it was. So, yeah, I mean, you might see a shift. obviously. But we are talking about the king of the north is going to be the king of the country, isn't he? Not the real king of the country. We actually have one of those. But he's going to be prime minister. Everybody knows this. And markets are the first thing to react to anything. They anticipate things. Often they anticipate things too much and the pendulum swings too far. So what you could find is actually that when he does become prime minister, some of that premium on guilt, guilt's borrowing rates and everything actually starts to dissipate slightly because it swung too far in the wrong direction.

12:29Lee Boyce: Helen, welcome. For anyone outside of Manchester, I mean, you would have heard of Andy Byrne. I think he's quite a famous guy. But in terms of his sort of policies, what are his views about money? What are we expecting here? And I guess it won't just be his views, it'll be whoever is his chancellor as well, because I guess all speculation is that Rachel Reads will not be hanging around.

12:54Helen Crane: Yeah, unfortunately, I don't think Rachel Reeves is likely to survive this one. So we're looking at Andy Burnham's views. And then, you know, there's a few theories out there about who might be Chancellor. Ed Miliband is being talked about quite a lot at the moment. But we don't know. We're in that kind of funny situation where, you know, he actually might not even be Prime Minister. We're already talking about who's going to be his Chancellor. I mean, it's pretty nailed on, isn't it? We're looking at things he's sort of talked about in the past and reports he said he agrees with. And there's a few things out there that people have sort of drawn on to get an idea of what Andy Burnham's sort of thoughts about money might be.

13:37Helen Crane: The big one is property taxes. So this is something that's come up a couple of times in in recent years. It's been called sort of a mansion tax in various forms but it is this idea of a proportional property tax so this would be essentially scrapping council tax and scrapping stamp duty as well so you wouldn't have to pay anything up front when you bought a home but replacing that with a proportional property levy which basically means that depending on the value of your home you pay a certain amount every year And the figure that's been bandied around is you would pay this at 0.48 % of the value of your home.

14:19Helen Crane: So that's obviously good for people who live in lower value properties. But once you get into those higher property bands, that could end up costing you more than you currently pay in council tax. So, for example, someone in a home worth£250 ,000 would pay£1 ,200 a year. that's pretty good for them because if they were a band D council tax home this year they'd be paying £2 ,392 so they've been paying about half what they pay now they also if they wanted to move they wouldn't pay any stamp duty but if you start to look at people in more expensive homes so if your home was worth£1.2 million you'd pay£5 ,760 per year under this new system and at the minute if you were banned H, the highest council tax ban, you would only pay on average£4 ,600 a year.

15:10Helen Crane: And obviously, one of the things that some people like about this is that it could be a bit fairer than council tax. You know, council tax bills are partly set depending on what local authority you live in. And, you know, people often quote these statistics, people in an inexpensive home in Wandsworth in London pay on average£1 ,028 in council tax and this is a band D and someone in Dorset pays£2 ,765 so it's you know I live in Wandsworth full disclosure but um you know it can be seen as quite unfair um across the country people like this I just grab and stamp duty as well because people always kind of talk about it as a barrier to moving home and you know if you didn't have that it could be a bit of a sort of shot in the arm for the housing market so i don't think this would necessarily necessarily be a hugely unpopular policy but the difficulty is in the actually doing it it would involve probably revaluing every single property in the uk the values that we pay our council tax based on now are from 1991 and i think if you were going to shake it up that much it would have to be based on actual property values from now which is like a huge undertaking and frankly how many years of labour got left to put this into place right so they've possibly only got till 2029 and you know Andy Werner's got to get in he's got to actually put this policy in place and then revalue all the homes so is this likely to happen it would certainly take a long time I think is the sort of thinking on it.

16:48Helen Crane: One other thing to say on it finally is that it could be good for tenants because it would be charged on property owners and not landlords so tenants would basically not have to pay council tax and not pay this new tax either however as with anything like this there's always the risk that landlords would just put up the rent to kind of compensate for the extra charge.

17:09Lee Boyce: So Aminela makes a good point there about long-term and short-termism. Some of these measures, and I was just going to ask you, is there anything that we could do to turn this around? And yes, we can fix this, we can fix that, but is anything likely to happen that's going to make a really meaningful difference? Because I gestured at the top about being a kind of a political basket case, but there is a bit of a snickering, shall we say, across Europe and the world. Not that we care, but for our own country, It'd be nice to not have everybody talk down all the time about it. It feels just so negative.

17:46Simon Lambert: Yes, I think there is some long-term thinking that we could do. And I think that there is potentially an opportunity where you get an Andy Burnham in, you get a new chancellor in, and then they do some of that. I feel sorry for Rachel Reeves. She's been unlucky, but you make your own luck. And she has done quite a bit to make her own bad luck. I think and I've always argued that Rachel Reeves had it in her to be a good chancellor I think she knows what the problems are but I think she has ended up hamstrung and hasn't been able to act and instead has done things that have made things worse I think almost everyone knows that we need to sort out our tax system we need to get rid of the tax traps we need to simplify it we need to get rid of this ridiculous promise not to raise national insurance income tax BAT etc and we need to basically open ourselves up to doing what we need to do so you need to need to unfreeze income tax thresholds uh the stealth tax drag is okay it pulls in more money but it's just wrong tax thresholds should rise with inflation um and people need to feel the tax system is treating them fairly and you can get away with the stealth tax thing for a while but then people start to notice and it becomes a problem and people started noticing a long time I'm going.

19:06Simon Lambert: So I would come in, I would say, right, from this point on, tax bands go up with inflation every year. You've already banked the gains that you've made, but it's like from next year, they're going up with inflation. I would remove the 60 % tax trap above£100 ,000. £100 ,000 is a lot of money. But when that was introduced,£100 ,000 was a lot more money. And now in order to be at the same level, if it had gone up with inflation, it would be£160 ,000. So that just goes to show and in fact even if it's 160 000 pounds it distorts behavior it's a bad thing just bin it off right fine keep the 45p tax rate and in fact maybe you bring the 45p tax rate down to 100 000 pounds you say okay we're getting rid of the 60 tax trap but we're lowering that band down to 100 000 pounds i would look at the child benefit removal i would look at all those other little bits in there and go look we're going to get rid of that stamp duty bad tax everyone thinks is a bad tax, stops growth, stops people moving for work, stop that.

20:06Simon Lambert: I would say, right, this is the plan on national insurance. This is the plan on minimum wage to say to businesses, this is what we're going to do. I would say this is what the plan is on pensions. I would be very clear on those things. And I would also try to create a scenario where the people in this country with money stop feeling like they're constantly under attack and therefore feel like they're poor, despite the fact that they're actually by all to all extents and purposes loaded and i would start harnessing that they're they're spending and investing power instead of making them hoard cash which is what they're doing and they've been doing that ever ever since you know the kind of financial crisis era reforms and the recovery from that and it just gets worse and worse and worse and every move that we make to try to squeeze a little bit more out of the people who have money and I'm talking the mass affluent here, not the really, really rich.

20:58Simon Lambert: Every single move that we make to do that just makes them save even harder and not spend their money and not invest their money. I mean, so in the last budget, right, we had Rachel Reeves declaring that she was going to make us a nation of investors. And we've got Savvy the Squirrel, who, you know, was going to encourage everyone to invest. The campaign then came out. But at the same time, we staged a raid on ISIS that people just hear as raid on ISIS. They don't hear as a raid on cash ISIS. But at the same time, we were then increasing capital gains tax and dividend rates. So it's like, invest.

21:42Simon Lambert: I'm going to punish you for investing. What kind of madness is that? So we need to stop all of that madness. and I do think yeah we need a we need a bit of a long-term plan we need to like right this is what we're going to do and actually you know things like inheritance tax everyone hates it it's really bad tax just do something about it drop the rate to 20 or something like and then everyone will go 20 is all right 40 really bad yeah that's all right or basically my idea that I put forward before make uh guilt held to maturity free of inheritance tax then all of that money that people are hoarding or trying to give away put it into the guilt market helps lower the UK's borrowing costs we need to be radical and we need to harness the power of business and entrepreneurialism and the mass affluent and actually I do think potentially an Andy Burnham might get that right because that's what he's done in Manchester he's been you know very pro business he's harnessed the power of business to bump things up there's a bit of legendising going on with the Andy Burnham and Manchester story but he has done that right so he's got the practice in doing it and I think that the person that we need in as the next chancellor if Rachel Reaves is going is again someone who's in on that as well and I think you know clear plan and lay out a clear plan that goes beyond the the 2030s and make it so that the next government whoever that is has to stick to it because it's going to look really bad if they don't stick to it and also come up with some short-term ways to get growth going that was the massive mistake that uh kirsten and rachel reeves made is they got all these really complicated wonky long-term plans none of it delivers short-term growth or makes people think that stuff's getting better what you need to do is deliver short-term growth and make people see stuff getting better like and also we need to stop companies taking us for a ride on my way to the station there is a road that had completely fallen apart and they closed it and it was closed like in sections for about a month right caused traffic chaos but they resurfaced the whole road it was like driving along some like costa rican jungle track or something it was that bad they resurfaced the whole thing smooth perfect great a year later along come Cadent the gas people they have dug holes the whole way along that road and then they've patched them up badly I know what's going to happen it really winds me up because I cycle along that road to work to the station every day and I'm already seeing some of them start to fall apart it's going to start to fall apart and that's how the road falls apart and that is a company taking us for a ride we as taxpayers have paid for that road to be fixed properly and a company has come along it's dug a load of holes in it and in order to save itself some money it hasn't resurfaced the whole road and it should have resurfaced the whole road because it's the entire stretch of road it's just patched it up badly and then it's walked away rubbed its hands and off we go water companies sewage works in the rivers in the seas all that kind of stuff we we have allowed ourselves to be taken for a ride for too long by companies in this country and we need to like turn that around as well because that's impacting all of our lives and it's basically costing us money because our taxes are being wasted so that they can pay their

25:14Lee Boyce: shareholders yes simon indeed i want to talk about one of the things that you've mentioned because there are a lot of things in that, but one specifically, Helen, which relates to the ISA changes. They were finally announced this week. We got confirmation that the Treasury plans to slap a 22 % tax charge on interest earned from cash sitting in stocks and shares ISAs. It is to avoid us, of course, all stashing our stocks and shares ISAs with cash to get round the new limit that Simon spoke about for under 65s of how much we can save into cash ISAs. of 12 ,000 rather than 20 and to get us to invest more money, basically.

25:54Lee Boyce: Well, just tell us, firstly, what are the new rules about holding cash in stocks and shares, ISAs? But also, you've spoken to the experts who say they don't think it's going to work.

26:06Helen Crane: No, you're right. They don't think it's going to work. So this is the plan that's been announced this week about how much tax you'll have to pay on cash that's held in your stocks and shares isa the reason this has been done is because from 2027 the rules are going to be changed on isis so if you're under 65 you'll only be able to hold 12 12 000 pounds tax-free a year in your isa in cash and if you want the other 8 000 pounds of the allowance you have to put it in stocks and shares so in theory there's going to be more people who traditionally put all their money into cash isa now looking at stocks and shares isa's perhaps for the first time um and what the government wants to avoid is people so if you have a stocks and shares isa you can still keep funds in there in cash so you put your money in and you can hold it in cash there before you decide what to invest it in and you can often earn interest on that money so there's an obvious leap hole there that you know people who just open a stocks and shares ISA, put the money in, and then never actually invest it in anything.

27:15Helen Crane: So that's what the government are worried about. That's what they're trying to stop. So 22 % is what you're going to be taxed under these new proposals on cash held in a stocks and shares ISA, which is obviously a fairly chunky amount is a big penalty for people who are, who are going to try and do that. But you know, we've spoken to the experts on this. And I think they're saying, you know there's no evidence that people would actually do this you know we haven't seen what people's behavior is going to be like when they maybe look at investing and you know they're perfectly legitimate reasons why you might keep cash in a stock and shares isa it's quite all sensible investing behavior in a way just kind of chucking all your money in and investing it straight away without maybe probably thinking about your strategy or maybe where you might want to put it is is not really a good idea so the experts are kind of arguing that people should have a bit of uh sort of breathing room and and you know room to kind of manage their investments in in the way that they want to and in a way that they feel is sensible and that might involve holding some money in cash and people always also hold cash in stocks and shares isis because they need to pay uh fees the platforms and things like that so you know you can understand why the government wants to close this potential loophole but I think the risk is that you don't want to sort of scare people into maybe sort of bad investing behaviour just because they're terrified to be charged 22 % on their cash.

28:49Lee Boyce: And I imagine that your readers were less than pleased with this new plan can I say please say that?

28:57Helen Crane: Yeah they're not happy our readers obviously love an ISA and there's been yeah there's been quite a backlash to this I think understand me and also we should mention as well for pensioners are a group who were supposed to be protected but by these sort of ISA changes you know that's why there's this over 65s rule if you're over 65 you are allowed to still have the whole 20 ,000 pounds allowance in cash and there'll be no kind of exemption on this 22 % rule for the pensioners who have a stocks and shares ISA and you know who naturally might be more kind of risk averse so i think that's something that our readers think is

29:36Lee Boyce: a bit of an oversight as well simon the two great things about isis are they are tap-free and they are pretty simple to get right i mean i know that george osborne loved introducing a new isa but just in their fundamentals they're quite a nice simple way to say does this not sort of muddy the waters somewhat, make them a little bit complex and not really tax-free, is it? When you introduce one element that's not tax-free, it then becomes very confusing.

30:08Simon Lambert: No, and it's just, it's another example of tinkering with something and then having to come up with ways to stop people using a loophole to avoid your tinkering and you just get stuck in this morass and people just they hear the noise you know we know the details our listeners will probably know the details because they're financially engaged but lots of people aren't they don't lots of people just don't even really understand isis they just know that they're to do with saving and investing and they just hear you know tax investments isa raid they see the headlines and it just adds to that what's the point they'll only change the rules um and it it's stick not carrot and i guess we really needed carrot and to go back to the tinkering element we've introduced different isa allowances for cash and stocks and shares we used to have different isa allowances for cash and stocks and shares we got rid of them because it was a bad system and then we've reintroduced a bad system that's so daft that really is what do we do now we start introducing more complex rules we the irony is the british iso was a better idea than what's been done i didn't i didn't think the british idea iso was an amazing idea but an extra iso allowance for investing in the uk stock market it's like okay yeah great that'll harness some of that all that money sloshing around with the mass affluent i was talking about it will get the it'll get them to maybe try to invest some more.

31:44Simon Lambert: And that plan was in play. It could have been brought in. A lot of work had already been done on it. And instead, what we've done is we've just wasted all the money that was spent on all that work by the government, by the companies involved and everything like that. And we've ended up with something that's worse. It's just daft.

32:01Lee Boyce: Helen, given the fact that there's going to be changes, are we optimistic that any of these sort of more unpopular ideas might be scrapped or is it just now too far down and live. It's a final parting gift potentially from the current Chancellor.

32:16Helen Crane: I mean it seems like this plan is quite kind of far along and I don't think it's necessarily anything that Andy Burnham would object to. It's quite an easy thing to say isn't it? Like Simon said for people who necessarily aren't that financially engaged for them to see the government saying oh we're gonna stop people trying to not pay tax with this sort of sneaky loophole on the surface of it it doesn't sound like you know what's in it for Andy Burnham to kind of object to that so I think it sounds like it probably will go through and one other thing to mention on ISAs as well there's been some news on a new first-time buyer ISA to sort of replace the LISA the lifetime ISA although people who have one will still be able to keep them open and so this sounds a bit like the old help to buy isa so you'll say then to it there'll be no limit so at the minute licens have this uh four thousand pound a year limit and you get a one thousand pound a year or maximum government bonus we're kind of going back to the old help to buy isa system where you put kind of as much money in as you want and then you don't get the bonus paid every year you get the bonus paid at the end when you buy your home um so it removes the need for all these withdrawal penalties that we've had with lifetime ISAs if you don't use it to buy a home or for retirement you get stung with this 25 % penalty which takes some of your own money so it will take that away because you won't be getting paid the bonus as you go and I do think these these rules have kind of confused people with the LISA but what's not good about this is that it sort of removes the compounding elements so with the LISA if you're getting paid your bonus as you go along then that's in your account and you can earn interest on that and it kind of snowballs but that won't uh you used to be able to earn interest on the money you put in but you won't have that kind of bonus added to it so in a way it's it's a worse deal for people who are buying their first home but i do think it's a bit easier to understand um and it's the kind of system that people used to be used to

34:24Lee Boyce: all right then finally the bank of bingham let's end on a lighter story shall we than all this tax and change and all that sort of thing, politics. The Bank of England is designing the next series of banknotes, which will include updated security features, and they want our help. Simone Lee has been chatting with the chief cashier of the Bank of England, Victoria Cleland, the person who basically signs our money. Is that right, Simon?

34:52Simon Lambert: She signs our money.

34:54Lee Boyce: She goes around and she individually signs. You might not remember, everybody, because when was the last time anyone here has held a banknote? I cannot remember. well funnily enough you're gonna tell me it today tell me today do you want to know a funny story

35:04Simon Lambert: about that so me and me were then getting we dug into our wallets and found banknotes the other day to see whether we had victoria's signature on them because you might not you might have someone else's signature on them the lady sarah who signed them as well anyway mine had been signed by um i'm very sorry sarah i don't know your surname i'm sure it was sarah uh mine had been signed by another person Lee on the other hand had an old£20 note and went hang on a minute is this an old£20 note it's like oh I wonder how long I've had that where'd that come from can I even still spend that I was like I don't know whether you can how old is he talking anyway he googled it and he's going to have to take it to a bank to get it paid into his account or swap it for another bank note he had an out of date bank note so there you go

35:59Lee Boyce: That's funny for Ali because I would have thought if anyone uses cash and spends cash, it's Ali. He does use cash. He likes using cash. He likes a banknote hidden. I know he does.

36:10Simon Lambert: Obviously, this is the equivalent of Ali's cash savings scheme where he's just been sitting on a note forever. Or someone's mugged him off and given him an old banknote.

36:18Lee Boyce: Yeah, maybe. That must be it. And he just didn't notice. I can't believe Ali would have a sneaky note that he hadn't noticed. Anyway, let's hear Lee's chat with Victoria Cleland.

36:56Thank you.

37:39it's really exciting consultation we're running so last year we asked the public what they would most like to see on the banknotes would they like to continue seeing historic figures or we gave other options as well and nature overwhelmingly sort of came out the favorite So we've announced that we're going to move to animals. We've launched this consultation, which, as you say, closes on the 3rd of July. And we've put a short list of 18 animals. And we're asking the public to sort of tell us their favorites from each of three buckets, so to speak. Sorry, animals, you may not want to live in a bucket.

38:14And from that, we'll then think, how best do we get those across the denomination? So we're looking for the central image for each of our four denominations of banknotes. And so we're really keen to hear from the public which are the ones they'd most like to see on the notes, because we want the public to engage with them. We produce the notes for the public to use. So, yeah, it's a great opportunity. I understand it's been the source of many discussions over many sort of dinner and supper tables. I've presented to a number of school children who've had fun designing banknotes and their own sort of animals on it.

38:48So it's got a real buzz, but the serious side of it is that we are changing the security features to make the notes even more counterfeit resilience. And that means we also change the images. So having fun with the animals, but the serious science behind it.

39:03Lee Boyce: Yeah. And obviously that was the move to polymer notes mid 2010s, wasn't it? To kind of have more of those security features put in there. I was looking through the 18 choices actually. I've got to say, I think I had to go for a common kingfisher for a£5 note and a brown hare for a£20 note. I'm going to ask you the most difficult question here. Have you got a favourite? I'm not allowed to say. I don't want to lead the audience. And one of the things that's really important to us is making sure we get a good mix across the four notes because we want them to be very easily distinguishable for people.

39:39and so we'll be and that's the reason why we've got these three sort of groupings that's a bit more polite isn't it animals um groupings and that's thinking a bit about their habitats as well so ideally we'd have something that is sort of for example um a sea animal maybe a sort of bird so you can get the flying and the flapping wings a mammal that's maybe um running around or on the grass and that means we can get different backgrounds and different types of movement and And that will help the people to distinguish between the notes and also hopefully focus their attention a little bit more to the security features.

40:17Lee Boyce: Yeah, so that's the seriousness behind the box, right? And I guess it really lends itself to the security features that you're talking about. I was told 400 ,000 people have taken care of this station. Yes, sorry, I got so carried away with excitement about animals, I didn't answer that. Yeah, so we already had over 4 ,000 people responding to the consultation, which is more than we've ever had on a sort of bank design consultation. And there's still a week to go. So we close on the 3rd of July. And it's just been fantastic to see how many people are engaging with this. I think it shows that actually the animal theme is really resonating with people right across the country.

41:01Lee Boyce: Yeah, I mean, 400 ,000 is a huge amount, isn't it, to have taken part in that. And as I say, if you are listening to this and you do want to go and have your say and vote for which animals you think should go on banknotes, go and do it. That was Ali chatting with the chief cashier of the Bank of England, Victoria Cleland. Right, Simon, your stat of the week, please.

41:23Simon Lambert: £4 ,500. pounds that is what buyers would pay on the average home for one that has a top energy efficiency rating compared to a normal home uh so basically some figures from nationwide said that a property rated a or b on energy performance certificate is only 1.6 percent more expensive than a similar home rated d so that's the equivalent of 4 500 pounds based on the average house price in england and this is despite the improvements that you would have to make to get it up to that level costing you much much more than that you know for example solar panels heat pumps and so on obviously you know it depends on the house and so on and i suspect that after the heat wave people might be well you actually think after the heat wave people would be more interested but actually they don't equate it with protecting them from the heat in the same way as they as they equate protecting it from the cold so i imagine at the moment the premium will be down because people will be like i don't want a home that stays warm i want a home that's cold but you know actually you know an eco home should be cooler rather than warmer as well all right then

42:39Lee Boyce: And Simon, thank you very much. That is it. Thank you, Helen. Thank you, Simon. Thank you for listening. You can keep up to date with all the latest breaking money news. Just go to thisismoney.co.uk or download the app. And if you have any comments or questions of the team or anything you'd like them to look into, Simon?

42:54Simon Lambert: You can email us at podcast at thisismoney.co.uk. Send us your questions. We will try and answer them. Or come to thisismoney.co.uk forward slash podcast to find podcast pass and join in the debate in reader comments.

43:08Lee Boyce: and if you like our podcast why not rate us wherever you found us it helps other people find us too