Will the younger generation be worse off than their parents?

0:03Lee Boyce: Welcome to This Is Money podcast sponsored by Trading 212. Download the Trading 212 app and open a cash-licer with promo code TIM to get the 12-month bonus promo rate at 4.51%. Terms apply. I'm Georgie Frost and joining me and Simon Lambert today is Lee Boyce. And coming up is the idea that each generation will be better off than the last over. Two-thirds of young people now think they'll be worse off than their parents. Do you? Meanwhile, Labour's student loan interest rate cap kicks in. Who will it benefit, though? Also today, from vape shops to pricey parking, what do you want to see less of on Britain's ailing high streets?

0:43Lee Boyce: Or indeed, more of. So many choices, Lee, so many choices. And dodgy fire sticks. The police are cracking down. But how on earth do they know you're using one? We reveal all. Don't forget, we can step to date with all the latest Breaking Money news. Just go to thisismoney.co.uk or download the app. But first, Britain's high streets have changed radically over the past couple of decades, and not always for the better. Buy-buy bank branches, big brands like Woolies, BHS and Staples as we all head online to shop. Hello, charity shops, vape stores, big coffee chains, pricey parking, the list goes on.

1:23Lee Boyce: Fed up, British shoppers and independent retailers have now revealed what they want to see less of and more of on Britain's high street. But what did they say? And more importantly, what do you think? Welcome, Simon. Welcome, Lee. Lee. The not-so-great British high street. Just how has it changed?

1:43Georgie Frost: Well, it's changed a lot, hasn't it, George? If you think about where you live and what your local high street looks like now, probably compared to 20, 30 years ago, So I could probably come up with a list of what people would say are top five hits of what would be in your high street. And it would go something like this. Coffee shop, charity shop, bookies, thousand hairdressers and barbers. And then a smattering of odds and sods. We have seen some big brands and shops and things that have been lost in recent decades as well. And I think there's a couple of ways to think about this. You've got the sort of bigger high streets and the kind of more city centers or large town centers.

2:25Georgie Frost: Then you have the kind of smaller zones, a kind of different beast. I've got a theory that basically these two things have been completely decimated. Firstly, by the rise of online shopping, which will probably come as no surprise to you, not just from a big player from America that happens to share a name of a river, but also the Chinese you know kind of cheaper websites that people seem to absolutely migrated to which is beyond my comprehension I don't quite know why people are doing that and the other thing the big the big push has been at these out of town kind of like American style shopping kind of precincts you know where you kind of have a big giant car park it's a nightmare to get in and out of and you've probably it's quite identicate you tend to have a next an m &s there um a furniture shop um and those kind of things and it's hoovering out a lot of people that would have probably gone to the high street before and then the people say well it's free to park uh versus local high street having to pay to park having to deal with fiddly apps having to do this that and the other and i just don't go and visit it anymore so there's a there's a kind of blend of things that are going on and it means that there's been a changing face of what's going on.

3:44Georgie Frost: And then we kind of have a survey of 2 ,000 shoppers. 68 % said they wanted to see fewer vape shops, which have flooded shopping distance. I mean, districts have been half.

3:53Lee Boyce: Have you ever seen anyone in one? I've never seen anyone. I thought they were a front for some sort of nefarious activity because I literally never see anyone go in.

4:01Georgie Frost: No, there is a suspiciously high number of vape shops with kind of very low footfall in. Yeah, I don't want to go too much down that route. And then gambling arcades are the third least popular sites of shoppers, 52 % of people. But in between that, in between vape shops and the gambling arcades are actually just shops being empty and boarded up. So people would rather see a shop boarded up and empty than it be a vape shop, which I thought was quite an interesting uh take a hefty proportion of respondents today also wanted to see fewer bookies payday loan shops town in salons mobile phone repair and accessory shops to a lesser extent takeaway food shops charity shops chain coffee shops uh also viewed with a degree of disdain i have to stick my hat up here i do like an independent coffee shop uh and i also quite like a charity shop which should probably come no surprise to you i do like to dip into them from time to time and some of them are very well done you know it's kind of sure it's other people's trash and whatnot but you can pick up some fairly good things in charity shops and i quite enjoy frequenting them um wherever i am in the country um and then what do what do shoppers want to see more of um a bakery at 70 okay i have to agree with this we do have a local uh bakers on our on our high street um it's not the best though it's not the best independent bakery we'd like to see a bit more.

5:31Georgie Frost: It's been, the bakery industry has been completely swallowed up by a big bakery chain that rhymes with eggs that are just popped up everywhere. And then free parking, 69%, and independent coffee shops, 59%, topping the public vote. Next on the list, banks. Remember them? They used to be on the high street. Yeah. You had it in a discussion last night with the PR about just how many bank branches were shut and you'd be surprised at some of the numbers of some of the big banks, how few are actually left. A cash point, independent restaurants and bars, hairdressers, you know, why do we need more hairdressers?

6:09Georgie Frost: This has got to be some sort of joke. Chemists and quirky gift shops, which is quite interesting, Tate. They also tend to have more supermarkets. We have a funny bunch. And butchers in their town centre. And of all the big brands on the high streets, 40 % of shoppers like it if there was an M &S there and a similar number for a Boots. So Boots and M &S seem to be the kind of big chains that people quite like to have in the high street that people tend to gravitate towards. But I don't know. It's a really varied picture across the country, I think, of your high street and the kind of what's happened nearby that might have sucked out the footfall, might have made it feel a bit more deprived.

6:55Georgie Frost: And I don't know. I like my local high street and I do make a kind of point of going up there probably once a week um I can't believe that a good pub's not on this list actually um yeah one thing that's missing in my town center is don't really like the pubs very much I wish there was a better pub um but it's about it's about having having services and having things there and having reasons to go up to the high street rather than jumping in the car going into one of these out-of-town uh horrible shopping places um as i say with the free parking which people just seem to love and they people seem to love to have to be able to park right next to the shop rather than having to walk any kind of distance um it seems to be a kind of pull for these um places and the online shopping thing again i mean it's just been such a huge change um i was i was driving this week and the amount of delivery bands that are out that are just like curbing roads and like stopping traffic and stuff.

7:55Georgie Frost: It's incredible how much shopping we now do online. So all of these things you add them all together is what's kind of helped the downfall of the high street. But I'm still optimistic about the future of the high street, Georgie. I still think there are places for libraries and independent shops and independent coffee chains and independent coffee shops and restaurants and you know you if you don't go and use it you will lose it because these smaller businesses need you to survive um and if you are someone that's doing more shopping online than elsewhere or you're going to these out-of-town centers and you can't really be upset if your local high street goes to dog do this is the this is the point though isn't it lee i'm going to use

8:40Lee Boyce: the example of the town that i mostly grew up in i can't remember the one in norway but oxford little town in surrey and i remember it very well 30 odd years ago it had a book big walworth's that i'd go in and buy the sweets and the new kids on the block tapes i had a bookstore

8:59Georgie Frost: a fruiteria or whatever you'd call it what do you call that a fruiteria a fruit and veg place

9:07Lee Boyce: oh yes that's it i couldn't remember i think sorry i actually really like fruiteria that's it

9:12Georgie Frost: That's a rebrand. That's rubbish. That's why people aren't going to these places. They need to be a Georgie Frost rebrand. I'm going to the fruiteria. All of a sudden accused of being around the block. But it had this.

9:27Lee Boyce: It had the butchers, I remember. That then became, that is now, and I can tell you the things that they've come, that is now a barber's. It had about four banks becoming a place to get your teeth done, a Spanish restaurant. You know, this is the thing. So Oxid Surrey, very posh, as you said, very different. So what it's become is just a load of restaurants. But the problem is the reason that these places have gone, Simon, is that people didn't go there. Now, you can bring them back in the hope that people realise, you know, what they've lost until it's gone kind of view. But what's the point? We are choosing.

10:14Lee Boyce: These are choices that we're making. We are choosing to go online to Amazon or Temu or whatever. We are choosing not to go to our local stores. Not helped, I admit, by high parking charges now that have been introduced or just the impossibility of parking anywhere. but what's the point like if we don't go to the high streets we don't want them so get rid make

10:39Simon Lambert: housing we've got housing shortage well that argument has been put forward actually that we should be turning more empty high street premises into housing and that actually there's a structural thing going on with the high street as you talked about the world has changed we don't need as many shops as we did in a world of internet shopping and so on and so actually instead of trying to forced stuff back into the high street and ending up with the empty shops stroke charity shop scenario because charity shops benefit in a way that other shops don't so it makes it much cheaper for them to be open there um that we should just get people to move back into the into those areas and then actually you have more people in those areas you have more footfall and then it encourages more shops to open i do think though that a thriving high street is a really really important thing to have and it's the thing that people always hold up as an example of why they like living places and that could be within a city their local high street within a city it could be within a town it could be within a village and i've experienced all of these right when i lived in london i lived in strow green which is between finsbury park and crouch end strow green road was and still pretty much is the epitome of what you want from a high street it has got butchers green grocers decent pubs lots of independent restaurants lots of independent cafes it's the kind of place that you actively choose to go you walk down the high street my kids used to know the butcher my kids used to know the guy who ran the pizza place my kids used to know the people who ran the cafe and it's that's a really special thing to have and there's a community element there and that's what people want they want that community element now if you contrast that to the town that i live in now which is like as similar to you georgie other side of the m25 posh commutersville right it's actually got a pretty thriving high street compared to most places it's the kind of thing that you look at it and people complain about it but actually you should you should hold on to this kind of stuff but there's a lot more chain stuff the restaurants they tend to be more chain restaurants the coffee shops they tend to be more chain coffee shops some of the shops tend to be more chain shops but there's still plenty of stuff there the crucial thing is that it's also still got three supermarkets in that town center and to go back to the point of why do people want supermarkets in town centers it's because it makes people go to the town center right because once you take the supermarkets out of the town centers and this is one of the structural things that's happened people stop going to the town centre because they don't have the reason to go there as much now unfortunately my local district council which is St Albans district council has decided to do its best to try to kill off the high street in the town that I live in by bringing in parking charges now it used to be that you could park for a limited amount of time but it was free okay so there were parking restrictions it wasn't just a free for all you couldn't just park there all day long but it meant that people could go to the town and they could shop but importantly they had enough time to go to the supermarket go around the supermarket do their shopping pop into the bookshop pop into the butchers maybe they pop into the flower shop maybe they pop into the charity shop maybe they do all those other things first of all they tried to get rid of it all together and then overwhelmingly it was voted against it was voted against by like 98 of people or something and they had like thousands of people reply to the consultation and they still decided to do it anyway and when asked why they'd ignored the consultation on on the point of how many people voted in the consultation they refused to say how many people uh on average voted in consultations right which they were like we don't know that number it's like yes you do you do know how many people on average vote when you do a consultation you could find that out and i think thousands is a big one but that we're with the sort of 95 or 98 % that voted against it.

14:44Simon Lambert: They said it wasn't 95 % or 98 % of people who voted against it. It was only 95 % or 98 % of people who replied to the consultation and those are two different things. So it doesn't mean that 95 % or 98 % of people are against it. Just 95 % to 98 % of people who voted. Anyway, as a SOP, they introduced 30 minute free parking and after that you have to charge. But you have to register every parking thing. So even if you use the 30 minutes, you have to go onto the app or I think you can use a machine as well and you register it for your 30 minutes. Now, it is true that there is now no problem parking in the town centre compared to what they used to be.

15:23Simon Lambert: But all of those empty spaces do concern me for the future of said town centre. And there have been a number of shops that have said, we're shutting up shop, we're leaving because of this. And the council said, no, no, no, no, no, no, it's rubbish. Like parking charges have only just come in. They couldn't have even felt the effect yet. The businesses were like, yeah, we're doing it because of what's going to happen next. We're getting out now before we lose money. But also my big concern actually is twofold. One, the impact on all those smaller shops because half an hour isn't very long. I can just about get around Sainsbury's and do the shopping for like a weekend meal and the other stuff that I need to pick up in half an hour.

16:04Simon Lambert: I don't have, there's not a lot of time left after doing that. that you're literally talking like maybe less than five minutes after it and I might dither slightly in the shop but I'm not spending ages in there so I'm worried about the impact on all the other shops right the smaller shops because now I don't have time to go into the bookshop as well or I go oh I'm not going to go to the butchers I'll just get it all in Sainsbury's quickly because I don't have time to go there and so on but I'm also worried that what's going to happen eventually is that one of those supermarkets is going to pull out they're going to go well do you know what people just aren't bothering to come here because people have a choice they can go to that town center they can have the hassle of that 30 minute free parking fearing they're going to run over it having to register with the app or everything like that or they can just drive a little bit further and they can go to the out-of-town supermarket where it's totally free to park and they can be there for as long as they want and i suspect there's quite a few more people doing that and when people do that supermarkets are you know they are volley big volume low margin businesses and they look at these things and they go do you know what actually maybe it's time for us to move out of this town once that happens i think you've got a real problem and at the risk of going on too long i would say one other thing on this well if you think about your high street and you think about what's going on there, is in a couple of weeks, we are all, well, not all of us, in a couple of weeks, many of us are going to get a chance to vote in the local elections.

17:36Simon Lambert: And this is your chance to have your say on this kind of thing. Do you think the people who are running your council are doing a good job of looking after your town centre and your area? And I think we make a massive mistake in this country in the way that we vote in local elections. What's going to happen in these local elections is Labour's going to get a massive bloody nose and people are not going to vote for the Tories because they're still really angry with the Tories. So what we're expecting is this big reform vote, Green vote, Lib Dem vote. Now that's fine if that person is actually going to do what's right for your area.

18:16Simon Lambert: But don't vote on a national level. Don't vote on a party political level in the local elections. vote for the people who are going to support your area stand up for your area and make your area better right the general election is the time to be doing the party political voting not now okay stop trying to like hurt whatever party you're angry at just vote for the person who's going to do the best job for your local area and that's really really important because the local stuff is the stuff that we notice probably more than anything else and just to like quickly run listeners through this because it is confusing county councils they're responsible for the big stuff education transport planning uh social care uh libraries so are there enough are there enough bike lanes can you get from town to village on a bike lane have the potholes been filled in what's happening to the roads all that kind of stuff county council district council rubbish collection recycling council tax collections planning applications parking charges if someone's going to bring in parking charges in your area this happened this was the lib dems who did this and the lib dems got voted in even though everyone was really angry about this and annoyed at it because all the people around here didn't want to vote for the tories because they were so pissed off with the tories after them bodging up being a government for so long which was this was a classic example of cutting off your nose to spite your face it's like do that in the general election don't do it in the local election um and then you've got your town councils they look after the stuff like you know allotments bus shelters play some play areas and they basically keep the place looking nice town councils actually do quite a good job i think so you know there you go when it when it's when you've got your choice in a couple of weeks time you're looking down it a actually vote and b actually think about it and make your choice

20:05Lee Boyce: wisely to support your local area that took a unexpected political turn simon but thank you I feel very educated from that. The one point I'd make about the supermarkets is every town, and as you know, I'm a big renting fan. But the last town I was in, and most towns I've been in, they've been a big supermarket, and you get free parking for about an hour and a half, which you don't get on the high street. So if they go, literally, I think it would decimate the high street.

20:31Simon Lambert: Yeah, everybody parks in Waitrose at the moment where I live. I mean, if that goes, that's it. The whole house of cars is just going to fall down.

20:39Lee Boyce: Absolutely, absolutely right. And also, Lee, interestingly, I mean, Simon, I was listening intensely to your parking story, but I was also interested to know what a fruiteria was. And actually, I didn't completely make it up. It is quite a big thing in sort of Spain. But also, and this is not a bad idea for the high street, it's quite famous Mexican juice bar. And it offers, as you'd expect, fresh fruit, smoothies, snacks, but also a social gathering experience. And they're quite famous. So there you go. Have more fruiterias on the high street.

21:09Georgie Frost: social gathering experience.

21:12Lee Boyce: That's a Gen AI interpretation of it. So I'm not quite sure that that's how much...

21:16Simon Lambert: Fruitery is popular in countries where people actually like to talk to each other, I think is what that is in normal person language.

21:21Lee Boyce: And also where probably fruit is more easily grown because it's hot and it's cheaper. But anyway, right, that's our high streets. Let's push that to one side. Once upon a time, the prevailing view was that every generation would be wealthier than the last. And that seemed to largely be true in Britain. But maybe not anymore. Under the weight of high house prices, the cost of living, student loans with a threat of AI and the end of final salary pensions, things look much bleaker financially for young people. And they think so, too, according to a new survey. Lee, as the just ever so slightly youngest person here, when we talk about younger generations here tending to be wealthy, what generations are we talking about here?

22:04Georgie Frost: Well, this report is looking specifically at 18 to 29-year-olds. So it's one of those things. I think when I was between 18 and 29, I don't know if I necessarily would have kind of thought, I'm going to be richer than the generation before. before just don't know if it was a kind of thing i would have really thought about and if you'd asked me the question i probably would have said no because you know the thought of getting on the property ladder the thought of building up a pension the thought of building up any kind of meaningful savings and investments feels like a real long slog away almost impossible task and as you rightly pointed out we are you know we've come off an era of house prices that have been very expensive compared to wages.

22:53Georgie Frost: We are in an era where going to university, if you choose that option, has become very expensive, not only from the costs and the outlay that you need to pay for your course fees and accommodation and all of that, but the interest that is charged on those loans, which we're going to talk about shortly. You mix all those things together, including the global geopolitical situation that's unfolded recently and rising inflation. And depending on when you asked this survey and when these questions were asked, it might have had a different answer and a bit of, you know, a different flavor. But half of 18, 29-year-olds say they worry about their finances, while third worry about job insecurity.

23:36Georgie Frost: A lot of that will be AI-related, I would suspect. You know, the threat of AI, the looming threat of AI and taking jobs. one in four say that that's that's why they're saying that and then there's a quote here from eddie barnes who's a director of the john smith center which is part of the university of glasgow so the idea that the next generation will have it better than previous ones has been a founding belief for decades today's poll shows that the majority of this generation of young people no longer believe it to be true and it reveals their loss of belief is collapsing at speed i mean that's quite a worrying sentence but we then have this bit where it says that two feds uh still feel optimistic about their future but the younger people are far more pessimistic about their future finances so it's a it's a it's a worry for younger people um and how we support them how we get them uh you know into careers and working and doing what they want to do how to get build up uh wealth how to potentially get onto the property ladder and all of those

24:36Simon Lambert: things i think that it is tough for young people nowadays um and i think there is obviously a lot of insecurity and a lot of worry and a lot of things going on um i think we should never underestimate the effects of the pandemic on people's mental health and if you look at these poor young people nowadays um they missed a lot of their big chunk of their formative years to lockdowns and the negative economic impact of that is still hanging over us in terms of trying to sort everything out sort the economy out the amount of debt that was taken on similarly we'd only just almost got over the financial crisis when that hit so you know this has been going on for a while the thing i would say is that there was something in here about younger people having to take on extra jobs.

25:31Simon Lambert: Now, if I cast my mind back to when I was in my early 20s, now this is a reflection on the fact that I did decide to go into a career in an industry that was very, very difficult to get into. And there was a lot of competition for jobs and it was very badly paid. But it was only when I started at This Is Money, at the ripe old age of 26, that I actually stopped doing more than one job all through my 20s when I was working I was working at least two jobs so I was working as a local newspaper journalist and I was working in a pub in the evenings to earn you know to have some spending money basically I was doing tutoring as well at the same time at one point I was doing three jobs and I do think you know whilst it whilst you know we talk about our people having to take on extra work and extra jobs and things like that taking on some extra work if you can get it is a great way of boosting your personal finances and we shouldn't always talk about it in the negative way because if you are doing an entry-level job you're not getting paid much if you can go get some work in a pub if you can go get some work doing tutoring if you can go get some work doing anything else that gives you even an extra 50 to 100 pound a week that's going to make a really big difference to your finances and it gives you you know you're spending money uh whilst you know the rest of your money can go on something else the difficulty is is that unfortunately we've been undermining those jobs um and we're seeing a rise in in unemployment and we're seeing those kind of lower paid jobs that you can just go and walk into being particularly badly hit i'm thinking pubs you know restaurants um cafes but there's always things out there that people need help with you know there's so many kids looking for you know maths and english or language tutoring at the moment if you've got a levels in that kind of stuff then you know maybe consider doing that and it's not just finances financial aspect of it is

27:29Georgie Frost: it because i kind of say because you did lots of jobs in pubs and nightclubs and all that kind of stuff and shops and actually it's yeah financially it wasn't very well paid but it gave me a lot of life experience and a lot of kind of experience with dealing with the kind of unexpected and you know yeah if you can deal with drunk people being rushed off your feet at midnight uh after a champions league football match or whatever it is the kind of mad scenarios i think it's like sometimes i sometimes look back at it i think that it was some of the hardest work i ever did for such little pay but it was worth it it was really good for you i mean if i think back to the

28:12Simon Lambert: bar jobs i did um working in pubs and things like that you got like you know you got people coming in in the evenings you got like the local businessman and people coming in or people coming in on their way back from work and you're behind the bar you're serving them you're chatting to them it's building your confidence it's helping you to understand you know they these are the people who at your work would be your boss and you're learning more about how to talk to them what they're thinking about all that kind of stuff don't underestimate yeah that life experience i think lee's absolutely right there all right to be honest with you audience members there was a

28:50Lee Boyce: pause in proceedings there i am in a hotel room and the fire alarm went off unfortunately that That pause in proceedings has meant Lee has got to go and rescue his beloved wife from a nail in a tyre instance. So we've lost Lee. But Simon, it's you and I continuing. I thought I would explain what happened. If there are the reason, then just I'd like people to see what really goes on behind the scenes of This Is Money. But we're going to stick with young people because not exactly the fix that some were calling for. but Labour has capped the interest rate on student loans at 6 % from September for one year.

29:27Lee Boyce: The government claims it will help younger people manage rising costs if inflation spikes as a result of the Iran war. But it will only benefit graduates earning more than£44 ,300 per year because of the way student loan interest is linked to inflation. Before, in the best way that you can, because actually, I mean, there's a lot of reasons I pity students when it comes to student loans, But mostly this is really complicated stuff. But as entertainingly as you can, Simon, for our dear audience, how do student loans work and why is this therefore relevant?

30:04Simon Lambert: Student loans are a mess, a thorn in the government side and increasingly a problem. This is a problem that has been quite some time in the making. It's one of those things where governments can get away with meddling with thresholds and freezing thresholds and taking a little bit more money off people for a certain amount of time. And then all of a sudden you just reach a tipping point. then quite often you don't even realise that you've reached the tipping point and then people start to get really cross. We've done it with frozen tax thresholds, we've done it with tax traps, we've done it with many other things and now we are there with student loans.

30:46Simon Lambert: The tipping point occurred in the budget when Rachel Reeves decided to milk a little bit more money out of graduates and it all kicked off. So student loans have been a very hot topic this year. The big problem with student loans is plan two student loans these are the ones that people took out after fees tripled from three thousand to nine thousand pounds in 2012 and they lasted until the 2022 cohort of graduates at which point we moved to a different student loan system that isn't very good but isn't as bad as this one the problem with this one is that people pay an interest rate based on their income and it is an interest rate that is RPI inflation plus up to three percent.

31:35Simon Lambert: RPI inflation is not an official inflation measure and hasn't been for many years because it's considered to not be a very good one. The government however thinks that it's a good one to charge students on and in order to try to deal with the fact that not only did they have this student loan problem that's been brewing all year but then inflation looks like it's going to spike off the back of the war in Iran they've imposed a temporary cap so rather than fix the problem they've stuck a sticking plaster on it the sticking plaster will last for one year from September 2026 and it will cap the student loan interest rate at six percent right the reason why it's from September is because March's inflation figure starts to be used from the following September.

32:23Simon Lambert: If you will forgive me, I am now going to explain how people's plan to student loan interest rates is calculated.

32:34Georgie Frost: Right. Okay.

32:36Simon Lambert: I'm going to read this off the gov.uk website. And then at the end of it, you're going to tell me whether you think this was a fair way to get 18 year olds to sign up to a loan that effectively lasts for pretty much the rest of their life and whether they understood what they were getting into and listeners I want you to play that game too I want you to start this with a completely blank mind and the only thing I want you to think about is did 18 year olds understand what they were signing up to for most of the rest of their lives. Or at least their working lives. How we calculate your interest rate.

33:19Simon Lambert: After you leave your course, your interest rate depends on your income. If your income is the same as or below the lower repayment threshold, we charge RPI only. The same as or above the higher repayment threshold, we charge the RPI plus 3%. Between the two thresholds, we charge the RPI plus up to 3%. To work out the extra percentage, brackets, up to 3%, we calculate how far your income sits between the lower and higher repayment thresholds. We then apply that proportion to 3%. Example, your annual income is£40 ,000. The lower repayment threshold is£28 ,400 and the higher repayment threshold is£51 ,200.

34:01Simon Lambert: Calculation. Step 1. Calculate the difference between your income and the lower repayment threshold. £40 ,000, brackets, your income, minus£28 ,400, brackets, lower repayment threshold, equals£11 ,600. Step 2. Calculate the difference between the two repayment thresholds. £51 ,200, bracket, higher repayment threshold, minus£28 ,400, bracket, lower repayment threshold, equals£22 ,400. Step 3. Calculate your variable interest rate. by dividing your answer from step 1 with your answer from step 2 and multiplying that amount by 3. £11 ,600, brackets, answer from step 1, divided by£22 ,400, brackets, answer from step 2, equals 0.517.

34:48Simon Lambert: 0.517 times 3, brackets, extra percentage of up to 3%, equals 1.553. Your variable interest rate would be 1.55%. This means your total interest rate would be RPI plus 1.55%. The calculation shows the additional percentage charged above RPI when your income sits between the two repayment thresholds. Your total interest rate will always include the RPI.

35:17Lee Boyce: John, I might do. I might speed that up in a comedy fashion, Simon, just so we don't lose absolutely every listener that joined us at the start of the show. I mean, you lost me at government website explanations, but look, it's just a bloody racket.

35:38Simon Lambert: There are so many people to blame in this, right? So many people to blame. At the moment, the Chancellor's getting it in the neck for this, right? It's not Rachel Reeves' fault. She didn't design this, okay? She's just desperately trying to deal with the problem. Well, I mean. Who could we lay the blame at? Was it the Tories and the Lib Dems? I don't know. The problem is, it's like, this was flagged as a problem at the time, right? The various elements of it were flagged as a problem at the time. And then successive chancellors have tweaked it and tinkered with it and meddled with it and not fixed the problem.

36:15Simon Lambert: And it's everyone's fault, if I'm going to be honest. apart from the poor people who've got these bloody student loans right anyway the point is right to give some examples of like income thresholds if you earn 29 ,385 ,000 pounds or less you pay an RPI RPI has gone up to 4.1 percent so you'd be paying 4.1 percent if you earn 35 grand you'd be earning that plus a little bit 40 that plus a bit more 45 that plus more and then if you earn 52 ,885 pounds or more you would pay the full whack of rpi 4.1 plus the three percent so you'd be on 7.1 the six percent cap that has been introduced um it's been worked out what is only going to benefit graduates who earn more than 44 300 because they are the people who at the moment with rpi where it is in march which is important reading according to calculations by campaign group save the student who are going to see this cap kick in okay because they're the only people who'd be paying more than six percent what does remain is a load of people who are going to be paying 5.8 percent 5.6 percent 5.4 percent five percent and so on i would argue that basically what should have happened is the inflation that the interest rate on student loans should have been set at inflation as it was for my cohort of graduates that was the one before this and the idea was that basically your loan would never increase in real terms and you know you'd then be paying it off and the whole thing to do with this is they're like don't worry you might never pay it off and then it'll get cancelled after 40 years or whatever it is is just total nonsense because firstly that is a terrible way to teach people about their personal finances don't worry you might never pay it back yeah but also how i mean people were like oh great so i'm going to lose hundreds of pounds out of my wages every month for decades of my life and I'm still never even going to have the satisfaction of paying this loan off.

38:20Simon Lambert: It's such a terrible system. It's so, so bad.

38:23Lee Boyce: Is there anything that can be done or are we going to sort of get ourselves into a right little twist into trying to figure out, you know, what you do about future students, current students, past students?

38:34Simon Lambert: Is there any way to sort of get out of this mess? I don't know.

38:41Lee Boyce: It doesn't resolve result in lawsuits from previous students. Well, there's this argument, isn't there?

38:46Simon Lambert: You know, were students missold? The terms have been changed, you know, after they took the loans out and things like that. I mean, certainly the IFS looked at this and said that they don't think, you know, that you could really put the case that they were missold. but that if commercial banks have started meddling with people's loan terms after they took the loans out in this way that the government and the financial regulators might have had something to say about it you know you can solve the problem for future students what on earth do you do about the existing students um do we end up with some debt kind of debt forgiveness scenario or something like that there were certain financial experts at the time who said you don't need to worry about this because it's not going to affect your chances of getting a mortgage and things like that it It's not the debt that would be included for your mortgage.

39:32Simon Lambert: It does affect the amount of money you have every month. And on affordability-based measures, that's what defines how much you can borrow on a mortgage. It affects how much people can put into their pensions. It affects how much people can save for the future of a rainy day pot. It affects how much people can invest, as Savvy the Squirrel is currently telling them to do as part of the government investing campaign that we talked about last week. it affects a lot of things um and it's a classic example of generational unfairness and i don't know what we do about it and we could we could do three whole podcasts talking about what we do about it um but what i do know is that we do need to do something more than this temporary cap that has

40:18Lee Boyce: been introduced yes indeed simon yes indeed right if you are a student though um one thing i would recommend is to save money, don't do anything illegal. And specifically, we're going to be talking about fire sticks. Now, for anyone who's a bit confused about this, about fire sticks, it's got nothing to do with flames on sticks. Think Thai beaches. It's not. This is to do with watching telly using USB sticks. This is when I have spoken to a senior police officer at the heart of a fresh wave of investigations that are looking at us, basically, or whoever might be using these illegal fire sticks.

40:58Lee Boyce: Because in the past, they've long been targeting the sellers. And people have got some quite hefty prison sentence for selling these illegal fire sticks. But now, police are cracking down on the users of these. Now, it's interesting, as I say, that this came out because I was having a conversation with an acquaintance. Obviously, I don't know people who engage in illegal activity. And they said to me, hence my confusion, have you got a fire stick? And I was like, I don't know what you're talking about. But then I did realise, I said, yes, I've got a fire stick. And they said, no, no, an illegal one.

41:29Lee Boyce: They said, that's how I watch all the football. Now, first and foremost, let's just explain how a real legal fire stick works. And then what is an illegal one?

41:42Simon Lambert: Right. Many of us will know people with dodgy fire sticks. I personally am anti this kind of stuff Because it is theft It's thought of as a victimless crime It's not a victimless crime It is theft And it's theft from the creative industries You know, you might think it's taking money off You know, the Premier League And football clubs Rich footballers You know, streaming services And things like that But ultimately, you know, that money funnels down into the into the creative industries you know um it funnels down into the people you know who who do the the filming of your premier league games that you want to watch and all the kind of the other stuff there you know it's not just the footballers that you need to think about the football clubs and i work as a journalist in the media in the creative industries okay so you know i think this i don't agree with this kind of stuff but we all know people who've got them right fire stick is basically it's an amazon fire stick right so an amazon fire stick is you plug it into the back of your tv it goes into the hdmi point of the tv and then it enables you to watch amazon prime right but what it also enables you to do is watch lots of other streaming services so for example we have a fire stick a genuine fire stick you buy them they're a bit of hardware i can't remember how much it costs like 20 30 quid whatever it's in one of the tvs you can use it to watch all the streaming services you can use it to watch youtube and stuff like that but we're paying for those streaming services if you don't pay for the streaming services you know log into them via the fire stick you cannot watch them on that tv dodgy fire sticks however have an extra special secret sauce to them you plug them into your tv and then you go into a special program on there and when you go into that special uh program on there you can literally choose from pretty much anything in the world that you want to watch you can watch the premier league games you can watch the champions league games you can you can find movies that have only just come out in the cinema sometimes and what you're doing is is illegal fire stick users and let's let's not call them we call them dodgy fire sticks everybody knows them as dodgy fire sticks but it's like no no no they are illegal illegal fire stick users illegal fire Plastic users typically pay an annual subscription of like£50 to access these services for free.

44:08Simon Lambert: But that opens the door to Netflix, Sky Sports, Amazon Prime, Disney Plus, Apple TV. As I said, somehow you can find films that have only just come out in the cinema.

44:23Lee Boyce: Which would be savings because it's illegal, but you know what I mean? This would together cost probably thousands.

44:30Simon Lambert: Potentially, you know, Sky Sports is like£35 a month, isn't it? So, you know, you start with that and then you add everything else on. Then, yeah, you could easily, the figure we quoted in the story was worth more than£500 a year. But I could definitely see how you end up knocking on the door of£1 ,000. If you watched everything that you could possibly watch on one of these, you'd be running up a big, big kind of, you know, tally of stuff that you were watching without paying for. but that they are illegal um and you can you know you can get in quite a lot of trouble so anyone found using the devices can face a fine as high as 50 000 pounds um wow i mean at the most basic level you might be watching the bbc without a tv license so you could get a thousand pounds fine for that um using an illegal fire stick might also be considered an offense of obtaining services dishonestly under section 11 of the fraud act which can result in a prison sentence of up to five years and the biggest sentences are resolved for a reserve for those flogging the fire sticks themselves um two years ago there was someone from liverpool who was sentenced to three years and four months in prison for selling dodgy fire sticks on facebook uh and last year there was someone else who was jailed for two years for supplying and distributing tv now this story triggered a bit of a backlash it got posted on a number of uh websites and social media places where there was a certain type of person who was like, I can't believe it.

45:57Simon Lambert: Police can't do anything about X, Y and Z. Choose your examples. I'm not going to list them, but they can go after our fire sticks.

46:06Georgie Frost: Oh, I see what you mean.

46:07Lee Boyce: They were saying, right. Yeah, yeah, yeah. They were bigger fish to fry for the police. Exactly, bigger fish to fry.

46:12Simon Lambert: But, you know, it's broken windows theory, isn't it? It's like the police can't only go after people who were committing really, really big crimes and just ignore all the people who were committing really small ones because it breeds the wrong kind of attitude towards crime. So, yeah, look, I'm not going to pretend that I don't think there are far more important things for the police to be doing than going after people who've got dodgy fire sticks, right? It would be extremely galling to have your house burgled, for example, and the police take ages to come round and not really investigate it properly and then to end up on the end of being told off and potentially prosecuted because you've just been watching some streaming services for free.

46:52Simon Lambert: But it is a crime. It is criminal. And also, they can catch you, which I think is the thing that most people think they can't do.

47:00Lee Boyce: How on earth would they know that you're... This is the big question I've got in my head, because if you see the privacy of your own home, do they have monitors on all our TVs and stuff?

47:12Simon Lambert: No, they don't. Right. OK. so do you remember the old license fee van adverts with the van driving around with the spinny thing on the roof we'll catch you we can find who's been watching tv kind of stuff it's like no you can't they used to have them like driving past blocks of flats and it's like oh so you're telling me that a van driving around with a little thing spinning around on its roof can work out the people in flat b are watching tv without a license but the people in flat a are watching it with one no everyone in that block's got a tv you just go around knocking on doors asking to see the license.

47:45Simon Lambert: We all know how it works. OK, but things have got more sophisticated since. And also the police could soon start to track you down through your bank statements if you have made any payments to an illegal firestick seller. In March, Revolut was ordered to hand over names and addresses of more than 300 dodgy box users to Sky by the Irish High Court after money was transferred to a legal streaming service provider. and you know obviously this was in Ireland but this definitely opens the door to this kind of stuff happening over here and also the police have warned that you know you need to be really careful about your data and your information and what might potentially spyware that might be on the sticks you know because effectively what you're doing is you're buying something that is illegal from someone who is happy to sell you something that is illegal and you might not be able to trust those people um you know your passwords your personal information um all that kind of stuff could be at risk if you're using one of these because it might have malware spyware that kind of stuff on it that could then be used to to hack you i don't want to sort of go down a really deep rabbit hole at the end of the show but the idea of looking at your bank statements

49:07Lee Boyce: or getting banks to pass over your statements one is that a common occurrence and two it feels like someone just coming into your home without some sort of a warrant yeah um i don't know enough

49:21Simon Lambert: about the law to answer your question properly there georgie because i'm a financial journalist not a lawyer however i would say yeah i can see your concerns and i can see the concerns of people where increasingly there is this element of being spied on through the financial system to find out if you're doing something wrong and the fact that it's getting easier to do that and harvest that information and then crunch that information at a very very high volume by the authorities and it is going to get easier and easier and easier um i mean the ai element here what you can do with ai now compared to what you could do two years ago is astonishing um i should obviously mention this claude mythos thing here You know, maybe we should have talked about this for the podcast.

50:22Simon Lambert: Maybe it should have been what we talked about in the podcast this week, because this could be the single most dangerous thing for the financial system ever. Claude Mythos is basically Anthropik's new AI. I don't know what you call them. Anthropik is one of the big tech companies. Anthropik is one of the big AI players. Right. You've got Anthropik, you've got OpenAI, etc. right and they're they're trying to build these like artificially intelligent models that can eventually you know the generative ai but stuff that can basically think for itself right okay and unfortunately at the moment it doesn't really there isn't really any control over this bit again we can do a whole podcast on this at some point but claude mythos is considered to be so dangerous and so good at finding bugs and ways to hack systems that it's not releasing it and it's just given it to a select group of banks, kind of tech firms and things like that to try to use it to work out about how hackers could use this.

51:22Simon Lambert: It could be a massive cybersecurity risk. It could be the kind of thing that brings down financial systems all over the world. It's so dangerous they can't release it. Central banks, financial regulators are very worried about this. Our very own Alex Brummer in Washington last week bumped into Andrew Bates. he told me this when I saw him on Monday when he came back, bumped into Andrew Bailey on the street and said hello to him and started talking to him. And Alex thought that Andrew was going to start talking to him about the Iran war and what a worry that was. But actually what he was talking about was how concerned he was about the Claude Mythos stuff.

51:56Simon Lambert: And Alex wrote a comment about that this week. But anyway, it's concerning. But the flip side of this is that the authorities are going to be able to use this more and more. And it's understandable why people are getting increasingly concerned about, you know, the big state spying on them in this way. I mean, if you think about it, it's akin to this whole fuss about facial recognition cameras, right? You know, the argument is nothing to hide, nothing to fear. That's not something that I personally agree with. Go read 1984. Yeah.

52:33Lee Boyce: I mean, you have stepped into the role of lawyer, politician. now I don't know what this would be bioethics I wonder if a lab say had created a virus say and it could be quite lethal what would we do with that destroy it test it let it out to certain numbers of people I don't know like just what one affects us quite substantially and the other also affects us quite substantially. The whole ethics thing, I think, with AI, I talk about AI a lot, a huge amount, especially over the last few years. And yet there's topics that don't come up, ethics, responsibility, all those sorts of things that, yeah, you know, want to talk about ROI and productivity and job losses, maybe.

53:25Lee Boyce: But like the stuff about ethics and responsibility and all that sort of thing doesn't come up so much. So I do hope, if nothing else, that this situation at the spur those sorts of conversations, because I think those conversations need to be had.

53:39Simon Lambert: I very much agree with you. And I do not think that the people who are currently in charge of this situation are the best people to be in charge of it. I think we need some grownups in the room.

53:49Lee Boyce: Yeah, absolutely right. Right, Simon, on that note, can we just can we lift it a little bit? It's out of the week. This is your last chance to add some... It's going to give you a bad stat. I didn't know a good one. No, find a good stat. Oh, yeah, all right. Ego. We'll take... Good. I know you'll deliver, Simon.

54:05Simon Lambert: £1.5 billion. That is the amount of money that could be, this is the top end estimate, sitting in 750 ,000 forgotten child trust funds owned by those aged between 15 and 24. An average of£2 ,200 in each pot. under the uh blair brown government um ctfs were tax-free accounts that were launched and uh children were given free money basically and then it was saved or invested um lots of people have lost track of this money and there could be money out there that is yours and you are a young person and you need money we talked about that lots in this podcast um so yeah go hunt it down. HMRC is going to be trying to help people.

54:56Simon Lambert: We've got a guide on the website about how to try to track it down. And the tip is go to the gov.uk child trust funds, find a child trust fund page, basically just Google that, go to that. Or ideally comes this money read story first. But if you don't do that, you know, just go to there and see if you've got one, find out if you've got some money.

55:16Lee Boyce: Absolutely. So take it from the government only to give it back an interest to the government. Brilliant. Right, that is it, Simon. Thank you very much. Thank you to Lee. Let's hope Lee, the knight in shining armour, has rescued his wife. I had to mention that in the show, and I'm glad I did, because otherwise it looked like we would have been very rude and ignored him, Simon. So there you go, Lee. This one's for you. Right, you can keep up to date with all the latest breaking news. Just go to thisismoney.co.uk or download the app. If you have any comments or questions, team, anything you'd like them to look into, any thoughts about the high street as well?

55:47Simon Lambert: Email us podcast at thisismoney.co.uk. Tell us your idea for sorting out the student loan problem or come to thisismoney.co.uk forward slash podcast to join in the debate and read the comments.

55:58Lee Boyce: And if you like our podcast, why not rate us wherever you found us? It helps other people find us too.