Why the UK has a bond market problem - and what it means for you

0:02Welcome to This Is Money podcast sponsored by Trading 212. Download the Trading 212 app today and open a cash ISA with promo code TIM to get the 12 month bonus promo rate of 4.61 % terms apply. I'm Georgie Frost and joining me and Simon Lambert today is Helen Crane. And coming up, the government bond market is freaking out again and the timing couldn't be worse for the new chancellor ahead of his first budget. But how worried should we really be? Also stay to use stews. How to make£750 in two years with a 0 % credit card. That'd be warned. Plus, could you get duped by the British boutiques that are actually shoddy Chinese shops?

0:41And the death of the dining room. But is it time to revive them? And no, you don't need a mansion to have one. Just ask our Simon. Don't forget to use App State. With all the latest breaking news, just go to thisismoney.co.uk or download the app. But first, UK government borrowing costs have surged, with some gilt yields hitting levels not seen for 28 years. Britain already spends around£110 billion a year just servicing its debt, and the bill is forecast to hit£135 billion this year. With the budget looming, this could leave the Chancellor with an even bigger hole to fill. So, should we be preparing ourselves for big tax rises?

1:20A very warm welcome, Simon. A warm welcome to you, Helen. What is going on, Simon, firstly, in the bond market? And why should we care?

1:29Simon Lambert: What's going on in the bond market sounds like just another episode of the financial soap opera that we keep hearing about. Yields up at X year high. We hear that story all the time, don't we? More on premium, all that kind of stuff. And we think, well, do I need to worry about it? In actual fact, you do, because effectively this is the rate that we are all paying. It's not the rate the government's paying because the government doesn't really have any money. The money belongs to us as a nation, and it is the rate that we are all paying in order to get investors to buy our bonds. And why are they buying our bonds?

2:06Simon Lambert: They're buying our bonds because they are lending us money in order to keep the country going, because, like many Western economies, we live above our means. Now, this is true of the US. This is true of Germany. This is true of France. This is true of Italy. And it is also true to say that this is not just a UK problem. What we've seen this week was referred to as a global bond market route, global turmoil, bond blowout, all that kind of stuff. And it sounds a bit like the kind of drama that we get criticised about with stock market stories. There's no stock market's down X percent, but you always talk about this many billions being wiped off the stock market, but you never talk about them being wiped on.

2:48Simon Lambert: But the bond market is really important. And it's a key sign of financial health in the system. And there has been a concern for a very long time that we cannot continue with a scenario where countries are continuing to borrow and borrow and borrow and spend and not really get real on their finances without there being some form of reckoning. And every time this happens, there is a concern, is the reckoning here? What's going on at the moment is being driven by some external factors. So you've got the Iran war, which has stoked up inflation. By stoking up inflation, it's reversed the direction expected on central bank interest rates.

3:28Simon Lambert: So rather than interest rate cuts, we are now expecting interest rate rises, which pushes up the amount that countries have to offer investors in order to lend them money. Because otherwise, you could just park the money with the central bank instead. You've got alternatives. You've also got some US data that came out last week and some comments, again, from the Federal Reserve chairman, Kevin Walsh, talking at Jackson Hole symposium. He was hinting that maybe the US might raise rates. And that's a really politically charged situation because, obviously, as we all know, Donald Trump really wants the Fed to bring down rates.

4:03Simon Lambert: And we talk about a moron premium here. Donald Trump talked about his own Federal Reserve chief as being a moron, the previous one. So he put the new one in, everyone thinking that he would be much more dovish, which is like easygoing on rates. And actually, he's brought out some hawkish comments. So that's triggered this latest bout of turmoil. However, it is worse in the UK than it is in those other countries. We pay a premium on our debt, which has been referred to as the Moron premium. It's not just the Moron premium. There are other things at play here. but it is true to say that we pay more to borrow than the US.

4:43Simon Lambert: We pay more to borrow than Germany. The US is the reserve currency. The dollar is a reserve currency and massively benefits from that. Germany is seen as more financially cautious and having better finances but we are also paying considerably more to borrow than France which I have referred to previously on this podcast as an economic basket case. Don't mean to be mean to the French, but their finances are not in great shape. Neither are ours, but theirs are really not in great shape. And also Italy, if we seem to remember the Eurozone bond crisis. Italy was one of its post-childs. And the reality of this is there's some really quite scary numbers that I ended up looking into on Monday.

5:28Simon Lambert: Yours truly returned from holiday over the weekend, was working on the bank holiday Monday in the office, was asked to write 600 words on bond yields for the next day's paper and also a piece for This Is Money and ended up falling down a bond yield rabbit hole. And there was a report put out by the Debt Management Office, which is the government's office responsible for issuing these bonds a couple of weeks ago. And there's some terrifying charts in there where we're issuing 300 billion worth of gilts each year, which is way, way higher than at any other time other than in funding the response to COVID.

6:05Simon Lambert: We are also paying a considerably higher rate. And then, as you mentioned, the debt interest that we are paying is huge. Almost one in every 10 pounds that the government spends goes on the interest on our debt. And what that means is that if it wasn't for all this debt, and these very high bond yields, and the fact that we're paying a premium on top of other people, we could have both better public services and lower taxes. Quite. On the state of debt around the world, it's got a bit silly, hasn't it, Simon? It's got like, the numbers are just unfathomable. Is it time to talk about sort of debt jubilees and the like?

6:51How are we ever going to get this sorted? Because when bond markets freak out, as they tend to quite often, then the cost of borrowing goes up and it's harder to pay down your debt. And then we just keep going and going. How do we fix this?

7:09Simon Lambert: Well, I think the time for debt jubilees, I think the time when you could get away with debt jubilees and other things has passed. Unfortunately, that was kind of financial crisis and post financial crisis and maybe into COVID era stuff. We now appear to be in a world where markets are demanding a much greater dose of reality. Now, I would agree with Andy Burnham on something, which is that we do not want to be in hock to the bond markets. He is right. Okay, on that note, I absolutely 100 % agree with that sentiment. Unfortunately, we're not in a position to take that stance. Because we are currently needing to issue 300 billion pounds worth of bonds every year.

7:56Simon Lambert: Ideally, you need to be in a situation where you don't need to issue bonds to say, well, we're not going to be in hock to the to the bond markets anymore. Because the reality is we are in hock to the bond markets. And if you look around the world, who wants to get serious on this? It means dramatically cutting spending. For example, one of our big problems is welfare spending. It is abundantly clear that Labour MPs do not want to get real on welfare spending. But welfare spending includes pensions. And pensions, you know, one of the things driving this up is the triple lock. So really, we need to get real on the triple lock.

8:31Simon Lambert: And, you know, Jim O 'Neill came out this week, who has been an advisor to Andy Burnham and said, you know, we need to be talking about some of these sacred cows. Or the alternative is we just need to pay a lot more tax. But we are already paying quite a lot of tax, if you look at it on the tax burden sense. But the people who are paying a lot of tax are the higher earners in the economy, and it has been skewed further and further towards that end of the scale, whereas actually middle earners and lower earners, have a lower tax burden than they have had historically. And actually, they've got the Tories to thank for that.

9:03Simon Lambert: The Tories were the ones who shifted a lot of the tax burden onto higher earners and the wealthy. But we've got a promise not to raise income tax, national insurance, VAT, all corporation tax, which means the government is completely hamstrung. So instead, it's fiddling around the edges, raising little taxes here and there, making the wealthy feel more targeted, discouraging people from economic activity, from trying to earn more, from all these other things. This is true, this is happening, when really what it probably needs to do is actually maybe raise the basic rate of income tax. But, you know, who wants to be the person who does that?

9:36Simon Lambert: And then we've got all these other things that we need to pay for that we can't even afford to do. I mean, ranging from fixing the roads to much more important stuff, let alone before we start talking about needing to increase defence spending. So what we've relied on, and what all major economies have relied on, And the point I'm getting to here is they're just being part of the pack. It's like don't break from the herd. If all of you are in this club of people who are borrowing loads of money because your economy doesn't balance and you can't really afford things and nothing's really going anywhere, then just stay in the pack and you should be fine.

10:11Simon Lambert: At one end, you've got the US maybe getting away with it more because of a the reserve currency thing, but also because the economy has been growing very strongly. But the US is starting to have an issue due to the fact that it's not the whole US economy growing very strongly. It's one bit of it. And then some other parts of it are really, really suffering. And then we've also had Japan this week where you're seeing Japanese bond deals have been very, very low for a very long time. And it's got away with running a huge debt pile and deficit. But actually now things look like they're starting to fracture there.

10:43Simon Lambert: And Japan is a really important part of the financial system as well. And Helen, the combination of some of these decisions that have to be made and, you know, the activities of the bond market over recent days could all come out in our budget. Is that likely? I mean, do they do that? Do they look at the bond market and go, oh, hang on a minute, scrap what we wrote. Let's completely rewrite it and add a few more tax and cut a bit of spending there. How does it work, Helen?

11:09Helen Crane: So when you put it like that, no, they probably don't react immediately to every little sort of, well, not little, quite big kind of hiccup in the bond markets in that way. But these do crop up increasingly, these sort of debt and borrowing panics. So I think it is something that's on the government's mind when they're looking at the need to cut spending and potentially raise taxes. But look, you know, we've been in that environment for some time anyway. We've seen the last few budgets with Rachel Reeves, several tax hikes. So I think it's sort of boring bond panic will be on their minds. But I don't know if they would react specifically to the current round of panic.

11:54Simon Lambert: Well, I was just going to say that the one issue that we have with that is that you need to think long term on this. And I said in my column this week that this kind of stuff shouldn't worry people who are long-term thinkers in terms of investors and things like that. You can get caught out temporarily if you need a mortgage or so on. But one of the issues is that the OBR is doing the numbers for the budget at the moment. And the OBR needs to look at what we're going to spend on our debt interest and the cost of their debt. And needs to look at whether Andy Burnham and John Healy are going to manage to meet the fiscal rule that they've promised to meet, which is having the current budget in surplus by the end of this parliament which is Rachel Reeves' rule.

12:34Simon Lambert: What this has led to in recent years is this kind of policy by spreadsheet where effectively you're trying to make the numbers fit based on figures that will almost certainly change they're not going to stay the same. So this is a really bad time for this to be happening because ideally what you'd want is roundabout now when the OBR is running the numbers. Bond yields to be nice and low or near the lower range of where they've been over the last year because then it gives John Healy more headroom and means that he's not under pressure to try to build his buffer back up. And economists have said this week that they reckon the headroom's been taken down from the 24 billion that Rachel Reeves had to about 14 billion.

13:20Simon Lambert: So that's a sizable amount. So there's going to be a lot of pressure on him to get that 10 billion back from somewhere, which means 10 billion worth of potential, you know, tinkering tax rises. I don't like this fiscal headroom stuff. The numbers change all the time. Isn't it time that we focus on the fundamentals, have some decent policies that look beyond changing figures day to day? Yeah, it is. And I think there's been no greater example of this than the last couple of years where we had Rachel Reeves's spring statement that was then rapidly followed by Donald Trump's tariffs that blew everything immediately out of the water.

14:01Simon Lambert: And Rachel Reeves's budget and spring statement, and then Donald Trump decided to wage war on Iran, which swiftly blew things out of the water. To be fair to Andy Burnham and John Healey, we don't actually know what they're going to do. They have said they're going to do politics differently and all those other things and maybe they are going to do all of this differently and the budget is relatively early okay with it's just over it's like seven or eight weeks away from now isn't it 28th of october so we don't have as long a wait so that's that's good they've not made that mistake that rachel reese made last year you know there's a big vacuum between now and then and i do wonder whether we start need to be getting some kind of just some firm direction because what i do know is that one of the things that bond markets don't like is, you know, the fact that we won't get real on our finances and so on.

14:53Simon Lambert: But what they also don't like is this idea that our only answer to this is raising taxes, which is anti-growth. And effectively, what we need is more growth in order to, you know, get the economy going, which then eases the pressure on borrowing and makes it easy to pay the debt interest and everything else. There are some other issues why we're paying higher rates than others. And it's not just the so-called moron premium. The moron premium reflects our political instability. And we do have political instability compared to some of the countries I was talking about before. So, for example, we don't really think of the US as a bastion of political stability, but they do tend to have one president who lasts out an entire term, sometimes sees out two terms in a row.

15:37Simon Lambert: That's not something that we've managed with our prime ministers over here in a while. France, as I said, a little bit of a basket case sometimes. But, you know, whilst they might be swapping prime ministers and, you know, having government arguments all the time, Emmanuel Macron has been president for quite a long time. Italy, famous for a revolving door system of prime ministers. Georgia Maloney has been prime minister since October 2022. We can only dream of having the same prime minister for four years, can't we? So that's an issue. Then there's another couple of things, mistakes that we've made, which are brilliantly summed up by my colleague Alex Brummer this week in an excellent column.

16:19Simon Lambert: Firstly, a quarter of UK debt is index linked, and that's to RPI, which isn't even the official inflation figure, but it tends to be higher than CPI. So basically, every time inflation goes up, we have to pay people more money. This is a problem. France, an economy similar in size to Britain, has just 9.1 % of index debt. The UK is an outlier. Our debt tends to be long-term debt. So it's an average age of 14 years, which is about twice that of Japan and France. And demand for long-term debt has fallen because big pension funds, defined benefit pension funds, don't want those longer-dated bonds anymore.

16:55Simon Lambert: So there's a bit of a mismatch between the debt that we've got and what people want. And then the Bank of England, let us not forget, it made a decision at the end of quantitative easing. instead of just holding on to all the gilts that it bought and just holding them to maturity and then they expire and then we just move on they decided to sell them back into the market which basically increases supply in a market where as we were talking about demand is not quite what it was some of the problem we are causing ourselves basically and probably it'd be a good idea to fix some of those things too yeah wouldn't it wouldn't it helen i think people just want to know what's going to happen to mortgage rates, savings, pensions, investments?

17:39What's going to happen to my money? Yeah, unfortunately, it's not a good time to be looking to remortgage or to buy

17:47Helen Crane: a house at the moment. As tends to happen, we've seen lenders already react to this bond market uncertainty. Coventry Building Society was the first to put its mortgage rates up yesterday. Brokers are saying more will follow. Although I will say we have had mortgage rates in this sort of high 3%, 4 % for a few years now. It was back in early 2022 that we last had rates at 1%, 2%. So we're sort of in the last cohort of people that are coming off really low five-year rates now and going on to 4 % plus rates and having these panics. Not that that's a good thing necessarily to be on a rate that high, but there'll be fewer people having that mortgage rate shock.

18:38Helen Crane: Savings, when mortgage rates go up, savings rates tend to go up as well. We haven't seen that just yet, but if things go on as they are, we could see savings rates go up in the coming sort of days and months. I think the key is try not to panic if you are in a situation where you need to remortgage, you know, find a broker, make sure you're getting the best deal. It is not a cause of huge panic just yet, but it's just a slight annoyance, I suppose, if you're unlucky enough to be having to remortgage right now. Right, then we will leave that to one side. Stoozing, it's back, and it could make you£750 from your credit card company.

19:17Basically, you put your spending on a 0 % credit card and the money you would have spent into a savings account earning a high rate of interest. Do it right could make you hundreds of pounds. Do it wrong could cost you far more than that. What exactly is it?

19:30Simon Lambert: Stoozing. Stoozing is a real blast from the past. Stoozing was something that was popular in the early days of personal finance forums, a kind of pre-financial crisis thing right so this is when I was starting out as a financial journalist and stoozing was part of the great balance transfer boom if people could cast their mind back that far there was a real boom in balance transfer cards and you could basically max out your balance transfer card have a really long length of 0 % interest on it and then you could easily find another one and easily find another one and easily find another one the idea was you borrowed big at 0 % so So you're paying no interest on it.

20:15Simon Lambert: And then you take that money and you put that money in a high interest savings account. And there were lots of high interest savings accounts back then as well. So you could be going 0 % borrowing, 5 % interest. And you were stoozing. Basically, it's arbitrage. That got knocked on the head by the advent of the financial crisis, which had two major effects for the stoozers out there. a really knocked the balance transfer market on the head and b saw interest rates come tumbling all the way down to emergency levels and we were talking about best buy accounts that paid half half a percent or 0.6 percent there's just not really that much point especially as what happened was the balance transfer market sort of took a turn and they started charging percentages on the balance that you transfer so you can still get really you've been able to get good balance transfer cards but you may have to pay like two percent on the balance to transfer or three percent on the balance which obviously eats into any potential returns you're going to get however stoozing is back for a couple of reasons and it's back with a twist firstly you can get high interest savings accounts now you can get four and a half percent on a cash iso you get more than that with our sponsor trading 212 you get 4.61 percent um you can also get 0 % purchase cards.

21:38Simon Lambert: So this is different to a 0 % balance transfer card. The balance transfer cards still mainly charge fees to move the money, but the 0 % purchase cards tend to come with no fee whatsoever. And what you do is this, you spend the money you would normally spend on your everyday existence, or perhaps on other things that you would buy, on your 0 % purchase card, instead of from your bank account and then you take the money from your bank account and instead of spending it on those things because you've done that on the credit card already you put the money into a high interest savings account so you're earning interest on it and in the example we've given it's basically taking three you can get about three thousand pounds on one of these cards you could do it on three cards if you're based on fifteen hundred pounds worth of spending per month household spending.

22:27Simon Lambert: You could run up over three cards. You do this over six months. You borrow£9 ,000. You can stick it in a bank account. Stick that money that would have been in your bank account in a savings account, in an ISA, so you don't pay any tax, and put it there for the length of the balance transfer cards, which the best ones are 26 months. You earn the interest. You must make sure you meet the minimum payments and you do not get caught out by any other clauses because otherwise you'll pay interest and you might lose your 0 % purchase period and the whole thing goes kaboom. And then you must also make sure that the moment that 0 % deal period ends, you take the money from your savings account and you pay off that card in full and then you get to keep the interest that you've made on top and the numbers that were crunched for us by Moneyfax talked about a£750 profit over that period of time.

23:20Now to me, I have always

23:23Simon Lambert: thought that stoozing falls into the bracket of stuff that's a nice idea but in reality most people will probably end up falling foul of it because they'll make some kind of mistake like i do with the whole trying to collect avios points thing and i end up paying an interest bill at some point that wipes out any benefit i get from it and or what i do is i'd be tempted to spend the money in the savings account or i wouldn't move i'll just maybe i just won't move that money across this month because i need a bit more money i'll do it next month and then you never do it There's a reason why credit card companies offer these deals and it's because enough people fall foul of them that credit card companies make more money on them than they're giving to you.

23:58Simon Lambert: And that to me has always been a warning sign. However, whilst editing this story the other day, I was thinking this and I realised that I am stoothing. I have got a 0 % purchase credit card which I used for I got for things like paying for flights holidays big purchases things that you want to protect and I had built up quite a big balance on it and I do have that money in my cash isa and I did think a few months back I should pay that credit card bill off I've got like the 0 % period runs for a long time from now on so There's no urgency. And then I thought, no, I should leave the money in the savings account because I'm earning interest on that cash ISA.

24:43And I should wait to pay that bill right up until the last point.

24:47Simon Lambert: You know, it's not going to be a lot of money. I'm not going to make the 750. But I worked out I was probably going to make about 300 quid off the back of it. So that's what I've done. But every so often I look at that credit card statement and I just think, am I making a mistake here? Am I balancing the books quite right here? If someone like you is asking that question, then I just... For the money that you would get, and not everyone, like you said, will get£750, maybe you could get a few hundred quid. You would need to be in a fairly, I would suggest, a fairly good position before you even start.

25:20Very responsible with credit cards and with your finances more generally. You need to have a part of savings already, because the last thing you want, as you pointed out there, is when you're midway through this little exercise, something happens the car breaks down or whatever and you need to dip into that savings which you were going to use to pay your credit card and then you're in all sorts of trouble and you also need some of that money probably up front that then you could put into your savings account to start getting the interest earned on it. Helen.

25:51Simon Lambert: That stoozing fun police has stepped in here. I know I know I know this is supposed to be like a lighter story it's got a fun name but anyway Helen, is it for you? What are the penalties if you get this wrong?

26:04Helen Crane: It could be huge, right? I absolutely couldn't be bothered with it, Georgie, to be honest. I think this is one of those things that there's a certain type of person who is really into this sort of thing, you know, really maximising points and bonuses and the kind of person that will switch their current account all the time to get these cash bonuses.

26:25Simon Lambert: Would that be the same kind of person who might have a television show where they shout at people about what they should do with their money. It might be. This is my point about what you're saying. For the amount of effort and for where you need to be financially to do this, like quite comfortably in a good position, I would suggest. I'm not poo-pooing 300 quid, let's say. But really, who has the time or the inclination or the anything? Why add more financial admin? We know that we struggle already with it.

26:52Helen Crane: I agree. Look, that's the main thing. I mean, first of all, I'm the kind of person that hates seeing a big balance on my credit card. I'm very nervy if I look at my credit card and it's got too much on it. That's just the kind of person I am. It's a psychological thing. I couldn't do all my spending on my credit card. It would freak me out. I know plenty of people do it, but I, yeah, I'm a catastrophizer. I just, you know, I would always be thinking, like you said, what if something happens? another thing certainly don't start stoozing if you're about to apply for a mortgage or a loan or something because taking out three credit cards in quite a short space of time would not not help you there you know you're right I think for some people this is sort of a bit of a hobby and a bit of a fun game but it is really easy to get caught out as Simon said if you don't make your minimum payments or you let it kind of run over the the 0 % period you can really get caught out so you know if you're the kind of person that has that discipline and can really keep on top of it absolutely go ahead and you know maybe these are the kind of people that end up actually just having loads maybe if I did all this stuff I'd feel quite loaded but I just can't be bothered.

28:05Simon Lambert: The thing I would say is not to defend stoozing even though I am an accidental stoozer but in the case of my 300 pounds it's tax-free as well so really that's the equivalent of earning 500 um but you've got to be honest with yourself like i agree 100 with both of you you need to be so honest with yourself about whether you're the kind of person who can do this and pull this off and that's why i'm an accidental stuza not a deliberate stuza because for all of the reasons i highlighted before about you know despite knowing what i should do there's knowing what i should do and then there's my organisational skills which leaves something to be desired.

28:43Simon Lambert: The comments were fairly evenly divided between people saying this is a terrible idea and actually surprisingly by people saying yeah I do this and I've got one two great comments here on this. One I've done something similar with a four-year interest-free balance on new furniture took the loan offer put the money I was going to hand over onto into an interest-bearing savings account over the four-year period I'm about 500 pounds better off. And then the other one, I'm intrigued by this. We're going to have to find out more about this. I use this method to time my flexible drawdown on my pension.

29:19Simon Lambert: I'm getting 15 % annual returns on my pot at the moment. We need to know more about that. Yeah, investigate. Any other comments you have to make? Whatever the hell our podcast email address is. It is, what is the email address, Simon? Well, it's a really complicated one. It's podcast at thisismoney.co.uk. That's it. I knew it was there. Tip of my tongue. Any comments, podcast at thisismoney.co.uk. Now, moving on. We all know the rules when it comes to online shopping. Right now, you know, we've all gone through the COVID period. We check the reviews. You look at the pictures. You find out who's behind it.

29:56Make sure it all looks proper, etc. But what happens when all of that can be faked? And I mean, everything is AR generated. You think you're buying a lovely dress or maybe a nice dapper suit, Simon, for a friend's wedding from a charming little boutique in Brighton or some such place. You've seen the pictures. It's beautiful. But in reality, you're actually buying something cheap and nasty from China. Not from Brighton, not from the store. The store doesn't exist. This is money that's been delving into the murky world of fake online fashion.

30:35Helen Crane: tell us more so this is essentially a scam on a massive scale so it's people ordering stuff online often clothes um but but not always clothes can be can be other things and uh when it turns up it's not at all like the picture on the website and i've noticed over the last few months loads more people are getting in touch with me about things like this um they'll see a picture the The lady we've written about in our story was looking for a dress for a wedding. Looks beautiful on the website. Ticks all her boxes. Gorgeous. It's sold by a company called Norbury of London, which sounds very legitimate.

31:16Helen Crane: It's got pictures of people in the store. It's got a picture of the store itself. It all looks very, very legitimate. But it's absolutely not. The stuff is made in China. Takes ages to arrive. and then when it does arrive it just looks like awful basically by all accounts so this woman said about her lovely silk dress that she ordered for her wedding the material was thin there were short butterfly sleeves it was a wraparound dress with a big flap at the front it was poorly made and there were no labels it wasn't what i ordered um if like me you follow a lot of uh or fashion accounts online you always see people posting this absolute dross that they've got from china you know sometimes people will get a dress and it will be like the size of a doll's dress or it will be like completely see-through or just absolute yeah nonsense clothing um the issue is then though that you can't send it back or i mean you're told you can send it back but you have to pay loads of money because you're sending it back to china with all the sort of fees that that involves so the lady in our story, the dress she bought costs£49, but she paid£25 to send it back, which makes it barely even worth it.

32:33Helen Crane: And then when you do send it back, you might not even get your money back, it gets stuck in customs, or you're communicating with these companies who are based in China. You know, they're sending you emails probably generated by AI saying, Oh, don't worry, we'll get your money back. And just nothing ever happens. So really great problem for any one that shops online I must admit I find myself now whenever I'm considering buying something and it's a website that I haven't heard of I'll just google is x retailer legit I do it almost every time I buy something and I would recommend it because it brings up the reviews and if something isn't legit a google of is this legit would normally normally tell you so I would I would recommend checking before you do this but it is easy to fall foul off because some of these pictures and websites can now look so convincing, especially with AI and things like that.

33:30Helen Crane: Also, another avenue that's worth going down if this does happen to you, it's worth trying to go to if you buy the credit card, going to your credit card company, because you might project it if the product sort of isn't as described or as expected. This is why about 95 % of my wardrobe is from two retailers. I just cannot be bothered to go anywhere else too. Yeah, I've started shopping in physical shops on the high street again, like it's 2001. It's actually quite fun. I forgot about it, but it's actually quite nice. You can have a cup of coffee in between and there's hardly anyone there now, so it's quite pleasant.

34:09Simon Lambert: I mean, the thing is there's kind of sales revenue from social media advertising platforms is going through the roof and a lot of this is now the kind of Instagram and TikTok shopping is really, really booming at the moment. And people are buying lots of stuff from there. You know, they do do a really good job of making it look like it's a kind of bougie boutique. You know, some little family-run thing and all these stories behind it, as Helen said. Sometimes it's a sob story. Oh, we're being forced to close down. It's like people love a story. People think they're supporting an independent brand.

34:45Simon Lambert: But actually, it's so easy to create this stuff with AI now. You know, you could sit there and you could get ChatGPT or Gemini or Claude to just build you. You know, say, right, build me a shop front and I want it to look like this and I want it to look like that and I want it to appeal to this person and appeal to that person and I want this kind of person pictured in it and I want that kind of person pictured in it. Oh, no, change that, change that, change that. Job done. It's so easy and it's also so easy to replicate again and again and again and again. and really there's no recourse. What are you going to do?

35:21Simon Lambert: You can't really do anything. You know, we did talk about some of the things you can do legally in there, but what are you going to do with some random company in China that might actually be a scammer? And then there's knock-on effects where people are concerned about putting their details in. What AI can do now is absolutely, absolutely mind-blowing. The images are so real and we are at the cusp of what's possible. it's going to be so much harder and there's going to be so many more stories about this and the one thing I'd say about social media is and I laugh at myself my very rigid views about where I shop but you know late at night when I'm doom scrolling and I see this advert for some makeup or some dress that's going to make me feel and look wonderful and I feel rubbish and tired or it's at you all the time in the past you sort out where you would shop not just physically when you go online i need some stuff i'll go and i'll go take a look now it's thrust at you every single time you open your phone whatever you're going through how many wines you've had and i can see why people are falling for this sort of online shopping and some of those are absolutely legit but some of them clearly you click on them and think nah this cannot be right so i'm all for supporting local businesses and this is a legit way for local businesses to get marketing out there fairly reasonably budgeted but just be absolutely careful i would say i think you pick up on a really good point there which is that the you know the flip side of this story is that this is not just harming people who buy some dress that turns out to be a piece of crap but it's harming the actual independent businesses that are being mimicked here.

37:09Simon Lambert: You know, that style of business for whom the ability to use the Internet as their shop front has been huge. It's been great. It's been transformative. And people have grown some really great brands out of it. And you want to see more coming through. That's exactly the kind of business that we need in this country, that entrepreneurial culture of doing it. It's also something that, you know, you find a lot of young people are very good at. You've got a lot of young entrepreneurs who build stuff up this way. And they're being harmed by this fake stuff and scam stuff because if people get scammed, get some piece of crap dress that turns into rubbish, they're like, right, I'm not buying anything from anybody I don't know anymore, not buying anything from any names I don't know anymore.

37:48Simon Lambert: Or even if they just read the story, then the problem is, is then they go, oh, well, actually, do you know what? I'm just not going to chance it. I'm off to M &S. Exactly right. And sadly, that's what I've ended up doing. Right, finally, the death of the dining room. This is an unexpected story from Helen. Used to be the heart of family life. Whenever I think of a dining room, all I think about is my mum's and it's definitely not been the heart of family life. It's been a dumping ground for like plates and crap for years. But I'm sure at some stage it was the heart of something. But no longer.

38:26It's not just my mum either. She's not turning it into something useful. But it appears that if we do have dining rooms in our homes, More of us are choosing to turn it into something else. Storage, maybe, but like office, gym, knock it through to make a bigger living space. Sad times, Helen. Or is it? Do we need a dining room? And will they make a comeback?

38:49Helen Crane: Do we need a dining room? That's the thing, isn't it? Actually, it's funny that you mentioned your mum's dusty old dining room because when I was choosing the picture for this story, I made sure to find the most dusty-looking 80s dining room that I possibly could. I'd have done it. She's taking a photo. You know, I'm here. But that's what's in my head when I think of a dining room as well. I think it's just about changing lifestyles, isn't it? So this was a survey done for the insurer Aviva, who said that 23 % of Britons who had a dining room have repurposed it for another use. And I think it makes complete sense.

39:27Helen Crane: You know, people work from home. That space might be better used for that. loads of people are really into fitness now they might want to stick a treadmill in there as you said they might just want to knock through and have an open plan living room dining room which is actually you know a lot of people prefer their homes to sort of have that open plan look now you know and it's part also of this wider trend towards you know improving your house rather than moving people increasingly don't want to move because of things like as we discussed earlier the cost of mortgage rates if you're upsizing or something like that stamp duty is always a sort of bony contention so I think people are staying in their houses for longer and you know improving them and making them work better for them when I moved into my flat the people who lived there before it's a small flat but they had made space for a dining room and so it's a two bed flat and they'd essentially they were using what had been the living room as dining room using one of the bedrooms as a living room and just having one bedroom.

40:29Helen Crane: We got rid of that, changed it around straight away because, you know, I'd love to be the kind of person who sits down to the table for dinner every night, you know, lights a candle, cracks a bottle of wine, invites friends around for dinner parties all the time. But I'm not, that's not, that's not the life I live. You've got to be realistic. I can't give over a room in my small flat for a dining table that I never use. Just not, it's not happening. That's not me. I'm sitting down in front of the sofa, I'm putting Netflix on and that's that's how it is I'm afraid Georgie. Yeah I know like I get it that's how we're living our lives nowadays but Simon to be clear you don't have to have a massive mansion you can actually have a dining room in a flat didn't you have one?

41:09Simon Lambert: Yeah I'm a contrarian on dining rooms so I'm not only am I a contrarian on dining rooms I'm a contrarian on being a contrarian on dining rooms. When we lived in our flat, we created a dining room. We turned a room into a dining room. When we moved into our house and we did the work on our house and built a new house, basically, we removed the dining room and didn't put one in in a bigger house. So let me explain my reasoning. So firstly, in the flat, when we moved into the flat, we had, it was a maisonette, and it had three bedrooms um one of the there was two bedrooms on the basement level and then on the ground floor level you had an open plan lounge into a kitchen and then like the corridor and then there was a room at the back that looked onto the garden um and we put some patio doors in so you could go out from that room onto the garden because previously there was a little corridor we knocked down the wall and stuff like that and then it's like right what do we do with this room Now, we had two, well, we had one young child when we moved in there.

42:18Simon Lambert: So my oldest daughter was just under a year old. And then, like, my other daughter was born two years after her kind of thing. So we're in the young children phase. We were like, do we need three bedrooms? Not really, right? It's great to have three bedrooms. I'm sorry for all those hating on this right now, okay? Like, we had three bedrooms. We had three bedrooms in a flat. Did we need three bedrooms? no did we need somewhere where we could sit down and eat if we had people over yes because in our old flat we'd had like a dining space and we had a no it's not a huge table it's not like some kind of henry the eighth job but you can sit six people around it but there was not enough room in the kitchen to put that in there there was only room for like a small kitchen table um that you could fit three people around maximum because you had to wedge it up against a wall and you couldn't put it in the sitting room because then it'd be right in the middle of the sitting room and you wouldn't be able to see the TV because there's a table in the way.

43:17Simon Lambert: So it's like, what are we going to do? So we went, well, let's use that room at the back as a room that we put the dining table in. We didn't deliberately go, let's create a dining room, but we put a dining table in it and the chairs. And then when people came over, we'd eat in there. So we created a dining room and we put a sofa bed in there as well, which made a difference. So it's like when people did stay over, people could sleep on the sofa bed shoves dining table against the wall and so on so we created the dining room and actually it really worked for us at the time because we had young kids so you can't go out that much we were the first of all our friends to have kids like mainly a lot of our other friends didn't have kids at the time so it'd be like come to us come to us so like it gave a reason for like yeah come over we'll just have dinner kind of thing and then it meant you could accommodate those people now when we moved into our house now when we first moved into it it was the 60s house that hadn't built in 1962 and the same couple had lived in it since it was sold brand new it was very very 60s and it gave a real insight into changing like cultural norms because it was what i would describe as like 60s broken plan right so it had a separate dining room that did open onto the kitchen, but there was this sort of timber frame built and a door, and you could go through this sliding door from the kitchen to this dining room area, but you could also see through the timber frame, but if you wanted to, you could pull some blinds down between the timber frame, so you could close off the kitchen completely and pretend that the magic doesn't happen anywhere in the house kind of thing when you're eating, and shut the door.

44:52Simon Lambert: So you did have a dining room, but it was really small and squeezed in. And when we did the work, we just decided, actually do you know what we don't need a separate dining room let's just put it in the kitchen's going to be much bigger we'll put the table in the kitchen and we did what so many people do nowadays which is what's behind the death of the dining room is we had an open plan kitchen diner kind of thing but there are times when i think it'd be nice if we still just had a room with a dining table in it wouldn't it but then i know that what would happen is because it's out slightly out of sight and slightly out of mind someone would fill it with crap i was thinking there's two mattresses in my mum's two mattresses in the dining room.

45:32Simon's stat of the week.

45:37Simon Lambert: 1 ,092 ,000. That is the number of pensioners who are now paying the top rates of income tax, according to official figures. So they're basically there are 977 ,000 who are paying 40 % tax. and there are 115 ,000 who are paying 45 % additional rate tax and basically that's been obtained under a Freedom of Information request by our very own Steve Webb and highlights what the freeze on thresholds is doing to pensioners amongst workers and other people. It's not just dragging us workers into higher tax brackets, it's dragging pensioners into them too. And bearing in mind that a lot of pensioners have the ability to take their income flexibly and try and push themselves down below a tax bracket in a way that you don't as an employee and probably don't want to as someone who's self-employed.

46:34Simon Lambert: This just goes to show how bad it is. All right then, Simon, thank you very much. Helen, thank you very much and 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, team, or anything you would like them to look into, Simon? Well, I was really tempted to test you there and see if you'd managed to remember the email for 30 minutes but it's podcast at thisismoney.co.uk 10 out of 10 thank you and there's other ways right come to thisismoney.co.uk forward slash podcast to join in the debate and read the comments tell us what you think about dining rooms and listen to all podcasts past simon yeah which aren't all about which aren't all about dining rooms no they're not and if you like our podcast why not raise us wherever you found us it helps other people find us too