How low will interest rates go... and will they stall earlier than we think?

0:03Lee Boyce: Welcome to This Is Money podcast sponsored by Charles Stanley Direct. I'm Georgie Frost and joining me and Simon Lambert today is Lee Boyce. And coming up, interest rates are cut in time for Christmas. But what does it mean for your money and where will they head next? Also today we take a look at the social media money trends the young 'uns are keen to try next year. Plus tell you how to find out if you are richer than your neighbours and we'll teach you how to spot counterfeit goods. We also have more neighbourly fence-related disputes. Oh, how we love them. Don't forget, you stay up to date with all the latest breaking money news.

0:35Lee Boyce: Just go to thisismoney.co.uk or download the app. But first, a message from our sponsors. With Christmas almost upon us, give yourself the gift of financial clarity with support from Charles Stanley Direct's Financial Coaching. Led by This Is Money regular Lisa Kaplan, Financial Coaching gives you access to a real expert who can help you make sense of your financial plans. Book your free 15-minute call today at charles-stanley.co.uk forward slash financial coaching. Go on, get answers you can trust. Remember, investment involves risk. Now back to the show. Good news for mortgage holders, bad for savers.

1:12Lee Boyce: The Bank of England cut interest rates this week from 4 % to 3.75%. It was widely predicted, but what is less certain is the speed of travel next. next so lee simon welcome lee it was a bit of a tight one wasn't it what happened yeah it was a

1:30Georgie Frost: five to four vote by the npc so i think what we always do is when we see the figure come through and we see that there's been a cut or if there's been a hold it's having a then a look at how the nine members of the npc voted and a five four suggests that four voting for a hold at four percent was tighter than expected uh i would argue and it felt like a shoo-in all week was basically we had a lower inflation reading only very slightly but a slightly lower inflation reading than what was expected the day before and then all of a sudden the markets were gangbusters it was almost like this base rate cut is priced in it's going to happen now for definite and then it came through at 5-4 and it was just a bit squeakier than what was expected so I think that what was the reason for that Lee?

2:16Georgie Frost: oh it's always on the cards i guess there's four members that are kind of not not as keen to cut rates they think that four percent should be where uh base rate is at and that's their their prerogative isn't it and i think sometimes what happens is we get kind of we look at all the data modeling that we have at our fingertips and how likely it is that a base rate decision is going to be uh happening you know in terms of like a cut or or a hold and then all the markets get hold of that data and it all goes a bit crazy but it just shows you that nothing's a dead set um and yeah and as i say a couple a couple of members still believe that four percent is the correct i mean for one thing four percent sounds a bit it's easier to remember than 3.75 isn't it georgie it feels like it feels like it feels like it which is obviously a consideration it's obviously a consideration at the bank of bank governor andrew bailey saying that you know we've we've passed the recent peak in inflation to continue to fall so we've cut our rates for the sixth time to 3.75 percent we still think rates are on a gradual path downward but with every cut we make how much further we go becomes a closer call um which you know is is highlighted in in what happened this week and as you say it's the picture is for for mortgage borrowers for people who are coming to remortgage and that kind of thing and mortgage rates are kind of banks already been pricing a lot of this in anyway uh i would say in the last couple of months and we have been seeing mortgage rates nip downwards.

3:39Georgie Frost: In terms of savings rates, actually, to be quite frank, they've held up pretty well. There's actually been some best buys that have come out in recent times, one-year fixes. You can still get plus 4 % on your savings. There's plenty of accounts out there that still beat inflation. So it's not all doom and gloom for savers, this decision, and there's lots of moving parts that kind of factor how banks price mortgage rates and how they price savings rates. But as I say, I think that the title call probably shows that it's going to be more difficult next year for there to be any more movement in terms of base rate cuts um but 3.5 sounds like a smoother figure than 3.75 perhaps perhaps

4:19Lee Boyce: perhaps they're fat today i'm pretty sure in the minutes that that's there lee how does this sound simon what did you make of it what picture is the economy painting and therefore members of the npc looking at? Because clearly, I mean, they're all looking at the same data, but they're coming to different conclusions, which is thus the issue with economics. But what did you make? Too cautious? I mean, I think we forget as well, don't we? Historically speaking, I mean, really historically speaking, not the past decade or so, 4 % is pretty reasonable.

4:52Simon Lambert: Absolutely. Historically speaking, an interest rate of 3.75 % base rate is pretty low. And what you need to look at is, What is the rate that the Bank of England would consider to be its neutral rate at that a moment in time or a moment that it's looking forward to in time, not this moment in time, but where it thinks the path of interest rates is going to meet the path of the economy. And the neutral rate is the idea of being this rate that it's Goldilocks, not too hot, not too cold. You know, it's not going to cause the economy to overheat. It's not going to cause the economy to go too cool.

5:35Simon Lambert: But what the Bank of England is actually targeting is not the economy. We have to remember that. The Bank of England MPC's remit is to target inflation and to have inflation at 2%. so when we talk about a neutral rate we're talking about what the neutral rate would be for inflation to be at two percent there are some that argue that the bank of england should have more of a dual remit that it should be targeting um inflation and something economic so for example the fed in the u.s targets inflation but also targets full employment um but what it's looking at is you can use inflation as pretty much a proxy for the economy and it's trying to get us to that point where inflation is not going to go up too far, not going to go down quite too much.

6:20Simon Lambert: And that's broadly the kind of like economic stability thing I was talking about a minute ago.

6:27Simon Lambert: And there are economists out there who think that rates should come down further before we hit that. The Bank of England itself has said that it thinks we are still on a gradual downward path for interest rates. but there are not many people who expect the bank of england to go much lower than it has done now barring some form of economic shock so the projections are for maybe another two rate cuts take us down to 3.25 percent um there uh one of the economists at deutsche bank this week um said that you know we stick to our call for two further rate cuts in 2026 one in march and another in june taking bank rate to a terminal rate of 3.25 percent broadly consistent with our estimates of the current neutral rate um the question is if we don't if we vary from that expectation the the expectation for like rates to be cut two times next year which side are we going to be varying on are we going to be varying on the they get cut by more are we going to be varying or they get cut by less.

7:40Simon Lambert: Now, I think investors are hoping that we're going on the cut by more. I think mortgage holders are hoping that we're on the cut by more. But I think there is also a risk that we have the cut by less and people should be prepared for that. Lee, talking about preparation, savers, mortgage holders,

8:01Lee Boyce: if you're looking to remortgage anytime soon, if you're looking, well, at your savings rate and thinking, I could do better than that. what should you be doing?

8:10Georgie Frost: Well, in terms of your mortgage, if it's time to go and renew and remortgage, rates have slid down a little bit compared to where they were at, say, a year ago, a year and a half ago. And they've been, as I say, gradually decreasing since then. If you're a first-time buyer as well, rates have been coming down very gradually as well. In terms of savings, I mean, I say that they're holding up pretty well. And in part, that's true in certain areas. So, for example, one-year fixes have remained pretty strong in terms of rates but where it does get hit is where a lot of people do park their cash in which is in easy access and you will see easy access rates start to slip I would say we actually had a comment in our piece this week from James Blur of Savings Guru who's basically warning that there's going to probably be deeper cuts in savings rates um next year and he's saying worse current rates are already priced above where i'd expect them to be for both the current base rate and the outlook outlook going forward given this i expect 2026 to deliver deeper cuts and just to drop the base itself so so i think for that reason that it might be wise to be looking at fixed rates if you can lock your money away um you know it's a good home for your cash but if you do need to access it you know speedily um you know you have no option but but if you are parking your money in easy access just make sure you're getting the best rate and make sure you're not just leaving it lumbering around in your in your current account

9:37Simon Lambert: getting eroded by inflation simon and the thing i would say on that as well is don't lose 20 or 40 of the interest that you're getting because you foolishly put your money into a taxed savings account rather than into a cash isa if you have the opportunity to put your savings into an isa because you haven't used your full ISA allowance, which will be the case for most people, because they're not going to manage to put 20 grand into an ISA in a year. Make sure that you get your cash savings into an ISA, because otherwise you're losing 20%, 40%, 45 % perhaps, to tax on the interest that you're getting.

10:16Simon Lambert: You've got the£1 ,000 tax-free personal savings allowance. It's been frozen since the day it was brought in, so it's worth much less than it once was. Meanwhile, interest rates have gone up. But if you're a higher rate taxpayer of which as we have commented many times before there are many many more higher rate taxpayers and many many more additional tax additional rate taxpayers and many many more people caught in the 60 tax trap then you're getting hammered on that interest so put it into a cash isa and i would say if it's an easy access one easy access cash flexible isa so you can take the money out put the money back in in the same tax year doesn't count as your new isa allowance

10:53Lee Boyce: best place to keep your cash and i imagine we're going to see a lot more money stuffed into cash ices in the next year and four months is it lee have i got the date right when does the limit

11:05Georgie Frost: change is it april 2027 hey bang on the money there georgie yeah you've got you've got this year's full 20 000 pounds of that you've got the next financial year's full 20 000 pounds allowance and then if you're under 65 uh that is going to drop as you say from april 2027 right uh we're

11:22Lee Boyce: sticking with savings, Lee, because if rates aren't going to help us next year and they don't sound like they will do, we're going to have to boost our savings ourselves. Apparently, social media is the place to go for inspiration. According to Nationwide Building Society, more than three and five to 24 to 35 year olds, so all of us here, are thinking about taking part in savings challenges next year. Things like the 100 envelopes method, revenge saving, we've covered that one before i know that and the no spend challenge if you are baffled uh lee is here to explain what all of those are lee yes i am georgie i am here to explain what all of them are and

12:01Georgie Frost: listen i kind of think first of all it's very easy to to look at this stuff and kind of sneer it a little bit where you're kind of like oh saving challenges like what what on earth under 35s doing now um but you know that's the but it's the way that lots of people you know uh get inspired to do stuff you know they're scrolling on their phone they're seeing what other people are doing they get inspired and if it happens to be that they're getting inspired to save more money uh you know or start saving listen i'm all for it um and and if that's the way it works for certain people that's the way it works for certain people so this 100 envelope challenge uh basically you take 100 envelopes and you write numbers one to 100 on them okay and this is the number of pounds you're going to add to the envelope each week you pick out two envelopes at random and put the amount shown on the front of them um so you might pick 17 and 34 and you have to put that amount of money in you tuck it away that week after the end of the year you're going to have 5050 pounds um and then what you do with your money from there is you you know this is a snowball effect you go and do something with it you stick it in a fix or you put it into some investing where you carry on going with it or you put in easy access and you carry on going with it the important thing is that it's kick-started you getting into the habit and actually do you know what george i think it's quite interesting this that the real interesting thing for me about this is that this is like going back to old school methods this is actually like saving physical physical cash and actually seeing it rather than a figure on a screen and i think lots of people are feeling like that in all sorts of areas of their life but if you get to it at the end of of the year and you see that five thousand pounds in cash i mean that's quite a quite a nice feeling um probably more so than seeing it you know just on a screen um the no spend challenge is what it says on the tin really um you're taking your tins out of your cupboard and eating everything that you can find um and basically trying to spend no money so you might do that for a month or you might do that for three months i think a lot of us are guilty i dread to think what's in my freezer i've probably got a good good i've got probably a good couple hundred quids worth of stuff in the freezer probably got a good good couple hundred quids worth of like tins and pasta and you know stuff that you just go oh do i need another pack of spaghetti can't remember you pick up another pack of spaghetti and you realize you've got four half open spaghettis in the cupboard already it's about basically you know using up everything that you know you've got to you just take say your paycheck isn't going anywhere and and not just food it's like you know not buying clothes it's not buying frivolous things like coffees and stuff that you know give us joy but sometimes we're guilty of spending too much so lots of people enjoy this it's a kind of like i would say it's like dry january but with money um instead of not drinking is this it's just basically being uh but i wouldn't do it january january's just such a miserable month yeah such a miserable month already do it in a kind of month where it's like more more feasible yeah february sure exactly you you took the words right out of my mouth that's what exactly i was going to say it's a couple of days shorter so you've got more of a chance and yeah the revenge uh saving we've talked about before uh it's this is all about carefully tracking how much you're saving uh as with normal budgeting activities but it goes a step further by doing not spending and taking part in a lot of different other savings challenges that are out there.

15:25Georgie Frost: Now, personally speaking, I think that the best challenge, the best savings challenge or the best way to start the habit, as I have mentioned numerous times, is a regular savings account. If you are at zero pounds and you feel that you can't save, you're not someone that naturally saves, setting up a direct debit to come out of your account once a month that goes into a regular savings rate, they pay up to 7.1 % which sounds really high but when you smooth it out over the course of the year you're not going to get anything like that but the rate isn't that important it's still nice to get interest on what you're doing but it's the habit and it's getting in that habit and if we have to if a regular saver just isn't a catchy enough term for you know if we've got to adjust this term up Georgie to make it more of a savings challenge the regular savings challenge just sounds rubbish yeah yeah our answers on our postcard uh listeners anyone who's got an idea of how we can make it more exciting uh in the new year and we'll become tiktok sensations georgie we'll start telling people to get their regular savings challenge on the go we can do it come on

16:35Lee Boyce: yeah i think like venti or something you know like regular as coffee you want to supersize it like a venti savings challenge um but i'll tell you what though georgie you put that in a headline

16:47Georgie Frost: people are crackers for this stuff but like you know readers love reading about it uh if you just like if you just do that and i still i tell you it will it will just catch on oh what's this venti savings challenge and all of a sudden it becomes a thing so you know you make it your

17:03Lee Boyce: thing all right cool social media sensation that i am i'm gonna that's good yeah i'll retweet it

17:09Georgie Frost: i'm in i'm in i'm invest i mean i'm invested literally but simon it's a good point i do not

17:15Lee Boyce: knock this at all in fact I mean it's not with physical cash but the best way I ever saved was you know years ago with one of those roundup apps and by the end of it I'd save myself enough pretty much for a deposit for a house I mean without even really realizing it and it's gamification isn't it and I suppose the whole point about social media and we've said it before with the revenge saving is it's accountability isn't it but yeah definitely the food cupboard thing is something I think we could probably all do with a bit of a clean out well when when Lee said that

17:43Simon Lambert: it made me laugh because i was literally about to say the word mince right so the cost of beef has gone up a huge amount we talked about this a couple of podcasts past when we were talking about food inflation beef mince has gone up loads to the point where waitrose posh shop of choice for many britons those who haven't gone i'm not paying that anymore i'm going to aldi um it has said that there's they've seen a big rise in sales of pork mints because people are going i'm going to make my weekly chili with pork mints instead the id yeah yeah i mean so we're still making our weekly chili with beef mints um but there's a lot more there's more veg going into it as well which which helps bulk it out but that also means that because we're buying the same amount of mints just paying more for it and then bulking it out more we're getting left with more leftovers and they all get you know bagged up going to the freezer um we've started dating them um not taking them out for a meal uh but dating them as in putting a date on the pack but but what we haven't really managed to do is start eating them and now i'm getting an increasingly full freezer but i'm thinking perhaps what i've created is an investment scheme because every time we really and then put it in the freezer the value of the chili goes up because the price of beef is going up but what we need to be careful not to do is that mistake that many investors make which is riding the market all the way to the top and then riding it back down so i need to eat that chili and cash in my gains on the mints before the price crashes or also the quality crashes because i mean this did come up the other week where my wife um i'd said don't order mints this week go and eat something from the freezer she's like which one should we eat and she's like we've got one dated 2024 i was like on the basis we're never going to eat all this stuff let's start with a more recent one although we should have eaten the 2024 vintage because obviously that's the one that's gone up in price the most maybe we're just holding on to it like a good bottle of wine well i'm just looking at this

19:52Lee Boyce: ai overview as you said this because i i thought it was about three months you could keep it in and it says you can keep beef mint in the freezer indefinitely for safety for safety i take if kept at zero degrees but best quality used within three to four months i take all of my food safety advice

20:09Georgie Frost: from ai overviews exactly it's notoriously correct ai yeah are we are we cruising into christmas taste tests here because this is where this feels like this is all this is all naturally going is this is where we go this is where joy simon's old chili out of the freezer we should have that we should

20:26Simon Lambert: have done a taste test this is where georgie reveals that 10 years ago she froze some turkey

20:31Lee Boyce: ham for listeners who are new to the show and never got to experience our wonderful christmas taste test i do recommend going back multiple years i couldn't even think how many years it would be to have a listen to that look lee before we move on from this you mentioned there about physical cash and i do want to ask you one sort of fairly large money story from the week and that's the contactless limit for cards is potentially going to be scrapped. I mean, it looks like the FCA wants to get rid of it come March next year, March the 19th, I believe. Now, of course, you can use mobile payments unlimited.

21:05Lee Boyce: So this is the physical card. £100, they're saying. If banks can prove that they've got fraud under control, didn't mean to laugh then. But what's weird about this right and lee help me out is the fca's own research shows that three quarters of consumers don't want the limit raised and in fact some want it lower and actually most industry people are not fully on board with this yet why is it happening i think

21:37Georgie Frost: it's a little bit of something for nothing if i'm being honest shortly because essentially as long as a customer of a bank can toggle on or off or phone their bank or go into a branch and say i don't want my card to be contactless and or i want my contactless limit to be 20 pounds or to be 40 pounds or to be 60 pounds or to be 80 pounds i'm kind of i'm kind of at ease with it what i'm not at ease at is if it just gets rolled out and everyone all of a sudden has an unlimited uh kind of amount that could be spent on the card now all of the banks have to have proper you know fraud checks so what i mean by that is usually every five transactions or so um especially if it's outside of your regular spending you should be prompted to input your pin and usually as well if it's um not that many it's a monetary amount so if you like all of a sudden there's been a transaction of 200 pounds and then there's one or let's say there's been like 100 pounds 100 pounds 100 pounds it should stop you there because 300 quid is usually the limit that they then make you put your pin in again so that what that prevents it should prevent is a fraudster grabbing your car stealing wallet and just going on a massive rampage and um as i say i think as long as it's not kind of just rolled out to everyone blanket it's kind of okay you know i'm a massive champion of cash i'm a massive champion of choice and that we we can't you can't you can't look past the fact now that something 90 to 95 percent of all uh you know payment transactions are contactless there's an incredible amount you know it's happened so fast it makes it incredibly difficult to budget um and i think that we we spoke to some of the banks yeah this week about it and and um I think Santander, for example, said it had no reason to change the limit and it would be keeping it£100.

23:31Georgie Frost: That was their kind of stance. So I wouldn't be surprised if something similar happens with other banks. But again, and I'll finish it here, we're lucky in this country in the fact that we do have a lot of choice of banks. Whether you want to be with one of the legacy banks, whether the big legacy banks, or you want to be with one of the new upstarts. You know, we have largely free banking. and if you're not happy with something that your bag does, just jump ship and go somewhere that's better for you, is my take. So I don't think it's as exciting as what it sounds, as in I don't think we're all of a sudden all going to have no limit and it's going to be a massive fraud rampage and et cetera, et cetera.

24:14Georgie Frost: I think it's fine.

24:15Lee Boyce: That's it for part one.

24:20Simon Lambert: i'm joined now by lisa kaplan of charles stanley direct for our weekly investing explained feature lisa a question here from a listener i gave my children some money 10 years ago as an early inheritance none of us can access our bank statements anymore so how do we prove this was done more than seven years ago for inheritance tax purposes it's a good question well i would say

24:41Lee Boyce: when you're doing probate, you're asked about gifts over the last seven years and to declare them, basically. And if this was more than seven years ago, you simply don't have to declare the gift. If the revenue wants to look further, you know, they can maybe try and unearth the evidence or ask you to find some evidence, but they can't go back further than seven years for the gift.

25:03Simon Lambert: Lisa, thank you very much.

25:05Lee Boyce: Welcome back. Time is running out to find the perfect gifts for Christmas, but be careful what you buy. Counterfeiting. No longer a fringe problem. Fake goods cost Britain more than£9 billion a year in lost revenue, deprived the Treasury of about£4 billion in unpaid tax, and a link to the loss of an estimated 60 ,000 legit UK jobs annually. That's according to the OECD and the UK Intellectual Property Office. And of course, some of the products can be dangerous so Dan Hatfield this is money's valuation expert has rounded up the 12 jupes to dodge Simon I have to say when I read this article those figures absolutely blew me away because I have to ask the question where are people getting these fake

25:51Simon Lambert: goods from it's interesting isn't it because well there's two things going on here right firstly there's obviously the black market for this kind of stuff right so you know picking them up online um probably increasingly um but also still physically as well but secondly you kind of think that in an advanced consumer economy like the level of fakery that's going on wouldn't happen and i must admit the place where this crops up and this is a bit tangential to be clear on this is honey right a huge amount of stuff that's sold as honey in this country is actually fake it's like a sugar syrup that's like from china kind of thing and it's on on the shelves of our supermarkets and i find this absolutely astonishing that in this day and age of you know food safety and all that kind of stuff um that you can you can do that kind of thing but anyway basically this huge amount of stuff that's being sold a lot of it is coming um online um and people see it i think as a kind of um victimless crime perhaps they go oh well do you know what it doesn't matter i'm just saving some money that kind of thing but some of these things can be dangerous so for example knock off toys authorities seized seized over 400 000 unsafe toys last christmas common dangers include choking hazards loose batteries toxic plastics illegal um chemicals um faulty wiring um so you know it's like people spotting trends and exploiting them fake labubu dolls k-pop demon hunter stuff you know all that all that kind of stuff um counterfeit jewelry fake watches counterfeit electronics fake designer handbags a single midlands raid uncovered three million pounds worth of fake luxury bags counterfeit clothing fake trainers fake perfume counterfeit cosmetics um and the counterfeit cosmetics and fake perfume one the fake perfume ones um you know quite a bad one because actually some of this stuff can be really harmful for people when they spray it on their skin the counterfeit cosmetics is a is another dodgy one and going back to my point about the honey there was a report earlier this year about like sun cream and loads of sun cream just not actually doing what it says on the tin you know and protecting people and things like that and so stuff like this can be you know very bad for people

28:25Lee Boyce: lee what has dan said what are the the main ones to to watch out for what can you do how can you

28:32Georgie Frost: spot it is there a trick well actually uh dan and i spoke on the phone a couple of weeks ago when we were talking through this story and actually i have a i'm kind of really passionate about this because i think that unfortunately there has been uh cost of living pressures and the pressure of christmas is that i think a lot of parents especially you know if you're squeezed or your budget's tight and but your children you know want certain toys and let's let's face it georgie some of this plastic tat and stuff that's out there you know it's expensive you know and my wife and i were talking about this the other week she she has she's got no idea how much like a games console costs for example and one of them flashed up on an advert you know between the tv break and she's like is that how much a games console how much is it you know like like four or five hundred pounds you know with a game and whatnot depending what you're buying a switch two is about three 350 something like that either way you look at it's a lot of money um you know things are heavily advertised and it's very hard to you don't want to let your children down i think that's the like mentality that a lot of people were in so you know i understand it um but it is damaging to the economy when you're buying knockoff stuff as you say it can be dangerous like a lot of these charging units for you know certain products are not fit for standard you know they're not they're not as they should be and could create fire hazards all of that kind of kind of thing what done and and the best advice really is that you know if something is too good to be true in terms of price it's very likely that it's going to be a knockoff and i think one of the biggest industries for this georgia and i think it's something that's probably close to your heart as well is football shirts now football shirts are an incredible amount of money these days um following a premier league team for a child that i i bought um unfortunately for my daughter i bought her a south end shirt you know it's pretty much the same price as an adult shirt there's a five pounds difference it's like it's about the eighth the size of my shirt you know how is a kid's shirt not sort of like a 10 or 20 pounds and football teams shoot themselves in the foot better than this as well because this is their next generation of fan you want your uh you know your the younger generation to be going around rocking you know your local football table or whatever rather than all of the Saudi Arabian shirts I'm seeing lately and you know into Miami and you know what's into Miami got to do with Essex you know just get you a South End shirt let's make it let's make it 10 20 quid but but but my point here is that there there has been a massive massive industry uh spring up for fake football shirts and i see it all over social media there's one brand in particular that is notorious for making good quality knock-offs of football shirts but football fans will go well if if the football team that i support is going to charge me 100 120 quid for a shirt with the name on the back with the with the badges on all that kind of thing i'm just going to go and undercut them and get one for a tenner from a you know chinese website um that's pretty much the same thing it's harmless you know i'm just one person doing that but you know lots and lots of people do that and it's just a balance isn't it georgie because as i say i understand why people do it because you know things like football shirts are expensive but it's almost like i just don't do it whatsoever just don't wear the shirt you know that's your football team's problem isn't it that's their loss revenue problem um and there's other ways and means to show your support um but there's lots of different examples like that where you could look around the counterfeit industry we just wanted to get this out here just as a kind of reminder to people before christmas you know not to get panicked and pressured into buying on social media for example where people can advertise quite easily without that many kind of steps um and you end up with something that's counterfeit something that's done something that's dangerous um and it's just food for thought really

32:16Lee Boyce: absolutely right i mean i can the football example is a great one because pressure from your kids they want to wear the shirt support the club and yet they you know you're paying 70 80 i mean god if you get your name on the back goodness me it's such a lot of money so i can understand if people are looking at it from a cost perspective but i also think a lot of people can accidentally get something so i guess it's that old and if we could put it up on a frame it if it sounds too good to be true it probably is is that right lee is that the moral of the story it is a big moral of the

32:48Georgie Frost: but the other moral of the story is as well is to think you know this isn't a victimless thing you know it costs the economy it it might be made by you know slave labor or it might be made by people with very poor working conditions you might be getting perfume or cosmetics that are made with all sorts of like chemicals or you don't know what's in there you know it's just a kind of like it's not being it's not being negative before christmas it's just a kind of like warning to to really think about what you're doing and where you'll buy your items from and if possible support your local retailers local toy shops local you know yeah exactly georgie yeah and and and you know hopefully you won't go wrong simon well yeah i think the big thing for people is is if they buy

33:31Simon Lambert: something that they think is real and then it turns out to be fake and they've paid big money for it because it's not like it's not always at both ends of the spectrum it's not the oh that's actually really cheap it's that that's just cheaper than it should be thing and especially with all the buying online and things like that it can be difficult to work out i know we had this when my daughter wanted some perfume and it's like i'm like okay but is that just fake you know it's 30 quid cheaper than the unbelievable price of the perfume for example but is it just fake um the football shirt thing i can i can absolutely see why people buy knockoff football shirts that look like the real thing right i can absolutely see it because it's like 80 quid or 20 quid kind of thing because the problem is when people are buying football shirts that are 20 quid cheaper than the real deal and they're still spending you know 60 quid on the shirt or something like that but yeah it is literally just what you said if it looks too good to be true then it probably is if you or your loved one or your child or your grandchild really wants that thing that's expensive they're on the good list they're not on the naughty list they've earned it right i would say from experience of when i was a kid and i can remember that and there being something some things i really really wanted and then i just got bought something that was a bit different to it but sort of the same and you were just like oh like as a kid you really pin your hopes on certain things And if that is the case, then maybe do buy them that thing.

35:04Simon Lambert: But don't be compelled to buy them all the other crap that you're going to buy them as well. Like cut back on the other bits and buy them the really expensive thing. If you really want to do that or get someone else to chip in or just go, do you know what? It's unreasonably expensive. And there's a lesson in life sometimes that you need to learn. Have unreasonably expensive things all the time.

35:24Lee Boyce: Well, I was thinking Christmas rather than the football shirt. you give them 100 envelopes right with one p two p three p four p you give them 20 quid and you say look by the end of next year you'll have saved 50 quid that's 70 quid you've got your football shirt and you've got 100 envelopes to play with what kids would not want that you know spot the one person here who doesn't have kids right encourage encourage them to sell some things

35:56Simon Lambert: they can use some of the money to go towards it oh one step away from getting coal in your stocking aren't we here i was gonna get you a present but what i actually did instead

36:07Georgie Frost: was i got you the idea of selling some of your stuff georgia when you said 100 100 envelopes i thought you you were turning like kids christmas presents into gambling so basically you put like some some football tickets into one envelope and all the other 99 are empty and if they find the Correct. One, they can go to the football, but if they can't, they've got hundreds of won odds. But if you can't, you're not getting a present. That's where I thought you were going. I thought it was genius. I liked it. You just get to keep the envelope.

36:33Lee Boyce: Yeah, no. All right, let's move on. Have you ever pondered, am I better or worse off than my neighbours? Well, ponder no more. To save you from awkward conversations, Money Mail, and this is Money Crunch, new data from the Office of National statistics to create a calculator that lets you see where your household income puts you in your location. So you just enter your household income, your postcode into the tool to see how you compare. Okay, I can't really say that I've thought about this one, to be honest. It's not. No, Lee looks like he hasn't either. But people do. There's a whole expression keeping up with the Joneses, isn't it?

37:11Lee Boyce: But what do we mean, Simon, by household income? How are we measuring this?

37:15Simon Lambert: Well, household income is the thing that really matters, I think, because it's the thing that for many people will define how comfortable off they feel. Now, your wealth is obviously dependent on what you've built up, your savings, your investments, your pension, your house, that kind of thing. but some of those things are notoriously difficult to spend your house is hard to spend your pension is difficult to spend until you reach pension age um your savings and investments if you're financially savvy you probably don't want to be spending those you're probably hoping to accumulate more than them what really matters is how much you've got coming in every month and what really matters is whether there's two of you with a substantial amount coming in every month because if there is your lifestyle could be really quite different different to if there's only one of you with money coming in or you're just by yourself there's the what's called the kind of the single premium isn't there where people who live alone and whatever stage of life they're at it costs them quite a lot more money because they don't get to pull their resources and share their costs so if you look at household income it's basically how much you've got coming in before tax this ons report looks at something called middle layer super output areas in england and wales middle layer super output areas in england and wales right which are neighborhoods of around 5 to 15 ,000 people.

38:50Simon Lambert: Most recently released figures are for 2023. So you need to add a little bit to this. Okay. And they look at the total income received for households before they've paid any tax. Okay. So it's pre-tax income. The average household income in the UK is£58 ,641. If you compare that to the average annual earnings for a full-time employee, that's 39 ,039 pounds so you can see how that makes a difference as i said dual incomes make a difference but it also depends on how these incomes are coming in so if you take the example and i think this is quite an interesting statistic if you take the example of a household with just 100 with just one earner on 100 000 pounds they are on a six-figure salary that's a lot of money they are being very well paid right versus a household with two earners both on 50 000 pounds who are well paid compared to most but you know they're just knocking on the door of the 40 threshold right the first one is going to see pretty much 50 000 pounds of their income taxed at 40 at the higher rate because once they go over the higher rate band which is just above 50 000 pounds they'll pay 40 on all their earnings above that the second household where we've got two 50 000 pound earners they're both going to just pay basic rate tax and if you look at it the hundred thousand pound earner after income tax and national insurance would take home 68 561 pounds but the pair of 50 000 earners would get 78 500 pounds so they're getting an extra 10 000 pounds of household income that stays in their pockets every year due to the fact that those earnings are split that's nearly a thousand pounds a month in their pocket not not not pre-tax this is post-tax if you had an extra thousand pounds a month or nearly an extra thousand pounds a month coming into your household every month you would feel considerably richer for most people you have to go a long way up the income scale before an extra you know 800 900 quid a month wouldn't make you feel considerably richer um anyway you can use this calculator to drill down and see where your household income puts you in your neighborhood are you near the top are you near the bottom are you in the middle and then we've also looked at some of those neighborhoods and which are the

41:21Lee Boyce: ones with the most money coming in so it's not a question of you looking over your fence and

41:26Simon Lambert: thinking i wonder if the smiths get more than me it's not quite that deep so i mean the question is how far are we in an ai digitally enabled world from being able to do that and i did actually read one of the scandinavian countries it might be norway where people's tax returns the public so we could in norway we could conceivably build you a calculator allowing for data protection and stuff like that that would allow you to genuinely see whether you're you've got a higher income than your neighbor now the thing that i think is interesting in this okay is firstly the highest income neighborhood does not directly match the most expensive one to live in so the highest income household income neighborhood is the southwest london suburb of richmond park sheen gate and petersham average household income there is 128 590 pounds that's 75 percent higher than the average for all of london um and that puts it and then next in the rankings is hern hill and dulwich park which is very very nice okay you know a bit of nice bit of posh south london sits between brixton and dulwich average household income is 125 416 pounds but it's not the poshest and most expensive bit of London.

42:46Simon Lambert: In fact, you have to wait until you get to number three in the list to hit Kensington. And you get South Kensington at£122 ,200. You then get Kew Gardens at£119 ,800. And after that, Alexandra Park in North London at£118 ,663. The only place outside of London to make the top 50 was Hinchley Wood and Western Green in, you guessed it, Surrey.

43:12Lee Boyce: Just a little thing about my patria, Norway. Yes, you can see people's records, but they also keep a record of who's been looking. So it can't be secret. There you go. Anyway, talking of neighbours, Lee, you have a question for consumer rights lawyer Dean Dunham. You do love a good fence dispute, but this one, this one's an interesting one. I mean, they're all interesting, but this one is quite interesting. My neighbour is building a kitchen extension and they want to temporarily move. This is not me, by the way. This is your reader, right? They want to temporarily remove part of my garden fence to give their builders more space to work.

43:54Lee Boyce: Right. This will be inconvenient, doubtless, because they'll be trampling on my garden. I have nice plants along the fence and it will compromise my privacy. However, it will be hard for them to complete the extension without it. can i say no literally i'm i'm no consumer rights expert here but i'm i don't know i i am confident you can say no surely to something like this but lee oh just like pour yourself a cup of eggnog

44:24Georgie Frost: have a couple of mince pies pass them over the fence get festive you know have a nice time with your neighbors be be this is the time of joy and kind of love and well they want to take your blooming fence down now listen i'd be absolutely incredulous as a neighbor tries to do this yeah so so dean dean says technically yes you could basically say you can't do this because you know regardless yours and a convenience for next law does not trump your property rights but then interestingly it does go into the law and it says the law does expect neighbors to behave reasonably and this is where things get a little more nuanced if their builders genuinely cannot complete the work without access your neighbor may apply to the court for what is commonly referred to as an access to neighboring land order under the access to neighboring land act 1992 this allows access only where it is necessary to carry out basic preservation works not because it's quicker cheaper or more comfortable for the builders he goes on to say if even if such access was granted were granted it would come with strings firmly attached such as limiting time scales strict conditions compensation for inconvenience and an obligation to reinstate your fence and guard exactly as they were your privacy and security should be protected and not sacrificed so to cut a long story short there georgie it would be very difficult probably for your neighbors to go to court to get that uh order through depending on what the work is that they're actually getting done if it's that if it i reckon if it was something really important like you know underpinning a house or something structurally needs to be done to the house to make sure that you know it isn't damaged or something you know to fix it if it's something cosmetic like you want to get an extension i think it's probably a little bit more difficult um where things could get interesting though is that compensation uh line because you might end up with a compromise where you say to your neighbor look let's do it you could do it but take pictures of this by the way that the fence is exactly the same the garden looks exactly the same and you if you pay me three grand that's you can do this six weeks you know whatever something you know i think a lot of a neighborly disputes come come from like not compromising or just taking a position of well i don't want my neighbor to do that i'm not letting my neighbor do that um you know but again it also depends on your relationship with your neighbors doesn't it like you know i live in a cul-de-sac get on perfectly fine with the neighbors find the neighbors on the hull are pretty um you know handy you know how else would i know what bin to put out um if i didn't see the guy who puts out his bin a day early you know i'd never remember if it was recycling week or normal cycling week you just i think you've just got to build relationships with your neighbors uh and just get along but you know you don't want people trampling over your garden um and destroying it if you're if you're unless you are reasonably conversated it might that's my opinion um we've heard the legal viewpoint of it i think it'd be very different but but you then have to live with those neighbors next door to you potentially for another year and they might move because they're fed up of you um or they they might stick around and it all might just get a bit awkward and that's where a lot again this neighbor stuff is is kind of frustrating and upsetting for people because yeah we live on an island where we are a lot of us especially in the southeast are just crammed in next to each other um sometimes we don't want to move house because we're happy in the area it ticks a lot of boxes but we want a little bit more space um and it's sometimes quite difficult to get planning permission and you know there's a lot of red tape to get through including pleasing your

48:01Simon Lambert: neighbors simon is it christmas yet okay my start of the week is 73 feet and six inches or 22.4 meters it is a statistic that has nothing to do with money but maybe fences or nothing to do with fences either you don't want to fence that high but everything to do with the kind of spirit that makes this country great right and actually that is going to drag us out of the gloom and into the positive light that is the height of the wave that laura crane needs her wave that she surfed this week to beat for her to become the surfer who has surfed the female surfer who has surfed the biggest wave in the world okay she was towed into a monster wave in Nazarene Portugal this week absolutely amazing she's 30 years old she's British look her up it's an amazing story she's shown unbelievable like kind of dedication and courage and bravery to do this and as the father of two girls.

49:09Simon Lambert: I think we should celebrate this kind of stuff.

49:11Georgie Frost: Hold on, she's not related to Helen Crane, just to be completely... No, she's not related to Helen Crane. Okay, fine. All right.

49:18Lee Boyce: You can keep up to date with all the latest Breaking Money news. Just go to thisismoney.co.uk or download the app. If you have any comments or questions for the team or anything you would like them to look into, Simon?

49:27Simon Lambert: You can email us at podcast at thisismoney.co.uk and come to thisismoney.co.uk forward slash podcast to join the debate and read the comments.

49:36Lee Boyce: and if you like our podcast why not rate us wherever you found us it helps other people find us too