Martin's Bio | About The Site | Team Blog

I’m not fit to be a UK citizen. Are you?

August 12th, 2011 by Martin Lewis
I'm not fit to be a UK citizen!

I'm not fit to be a UK citizen!

I’ve just taken the practice UK citizenship test online and scored 17 out of 24 (try yourself below), just under the 75% pass mark. I wanted to give it a try as I’m currently a referee for a good friend who is applying for a UK passport – she was telling me about the test, and passed it first time, so I thought I’d give it a go.

But now I’ve seen it, it really isn’t that easy. To pass she did work and study for the test before hand, plus she’s an experienced Italian journalist and English language broadcaster who’s been here since we were students at the LSE together in 1993.

While some of the questions she faced are practical ones such as: ‘Where do you apply for a National Insurance card?’ – others such as: ‘What is the current minimum wage?’ or: ‘What year did women get the vote?’ require specific learning – not generalised knowledge.

I presume the reason for that is that you can only take the test in English, it’s also partly a comprehension test and thus you need pretty decent English to take it in the first place.

If you want to take the practice test I found online it’s here: http://www.ukcitizenshiptest.co.uk/ (it’s not the Home Office page though, so for its info go to: http://lifeintheuktest.ukba.homeoffice.gov.uk/).

Do try it and let me know how you did below (and be honest).


Comment via Facebook login (we're trialling this)

Posted in Just for fun, Uncategorized | Comments Off

Wholesale energy prices are DROPPING. Was/ is fixing wrong?

August 9th, 2011 by Martin Lewis

Wholesale energy prices are DROPPING was/ is fixing wrong?

Wholesale energy prices are DROPPING was/ is fixing wrong?

Four of the big six energy companies have announced price hikes to hit in the next two months, two more are expected to follow, yet the wholesale prices energy companies pay are dropping (see Wholesale rates at year low) – so is it worth locking in now if our prices may fall again?

When wholesale prices are rising, energy companies respond quickly and put their prices up. It’s often said that when wholesale prices are falling, energy companies never respond and put their prices down – yet that isn’t true (though whether they do it with such speed and relish is debatable). As this uSwitch chart below shows, prices have and can move in both directions.

British Gas average annual household bills

Date

Annual Bill Size

1 Jan 2004

£543

1 Jan 2005

£642

1 Jan 2006

£735

1 Jan 2007

£1,002

1 Jan 2008

£821

1 Jan 2009

£1,176

1 Jan 2010

£1,066

1 Jan 2011

£1,096

18 Aug, 2011

£1,286

So, the concept of energy bills dropping after rising should certainly not be discounted. However, over most two year periods – about the time most fixes last – they’re almost always rising. And there is no doubt that over the long run (5-25 years) the infrastructure requirements being put on energy companies means prices will rise.

Yet, in the short run the markets rule, therefore prices can vary radically, so right now the key info is…

Though it’s far from being likely now, if the worldwide economy moves into a double dip recession, which some say the current market turmoil predicts, then demand for oil is likely to drop, and the likelihood of wholesale prices falling rapidly increases."

Is it worth fixing if prices may drop?

For six months we’ve been saying everyone should urgently CONSIDER fixing, and the same holds true now. The key here is we’re saying check whether fixing is right for you – not a blanket – everyone should fix.

Much of this info is already in the fixing FAQ part of the cheap energy guide but I wanted to spell it out in the light of the current wholesale price falls.

  • Fixing should be seen as an insurance policy

    If you are worried about price hikes, urgently consider locking into a fixed tariff, which guarantees rates for a set time such as 18 months to effectively insure against your prices rising.

  • To decide if it’s worth it, first see how much you’ll pay

    To find out whether it’s right for you – you first need to know how it compares to what you’re currently paying (see compare energy tariffs for a full list on how to do it).

  • Many can fix and save £150/year over their PRE-hike prices.

    If like millions you’re on an energy company’s STANDARD tariff, you may be able to fix and cut your bills by £150 a year. Now to clarify, that’s £150 a year over the pre-hike prices, so it could easily be a £300+ saving compared to the post hike prices.

    In this case, even if energy companies were later to cut their prices back down you’d still likely have saved substantially – so even if they did cut prices – to think you would’ve been better on your old tariff is unthinkable.

  • If you don’t get a cheap fix this could all be baloney.

    I’m always slightly frustrated that while my suggestion is to ‘compare to find your cheapest fix’, I meet people who say: "Thanks for your help I called my energy company to fix". It makes me want to groan.

    That isn’t the point – it’s not about locking in at all costs, it’s about locking in on the cheapest fix. If you have locked in without doing a comparison, there is a chance you’re paying a premium even over future rates to fix, which isn’t sensible.

  • What if the comparison shows it costs MORE to fix?

    This changes the landscape. If you’re already on a super-cheap discount tariff and need to pay more to fix then it’s nowhere near as certain. Although do factor in the definite British Gas, SSE and Eon price rises hitting in the next month and predicted rises for Npower and EDF.

    Those increases are around 10%-20%. So if you’ll pay more than that on a fix, it’s likely to be best to stay put, unless there might be yet another round of hikes quite soon after this one.

    If the gap’s less, balance savings now against price certainty – factoring in the definite future rises, but also the chance that after that prices could rise further OR fall back again. Here there is less certainty of a saving so it is far more about your attitude.

  • Fixing isn’t about ‘it will be the cheapest option’, it’s about ‘it will be a definite price’.

    The concept of fixing is not primarily about trying to beat the markets and win overall. For most, it is about peace of mind of knowing your bills CAN’T rise. You need to balance out the worst case and best case scenarios.

    Of course it’s possible in the future you’ll look back with hindsight and prices will have dropped after the rise, and you may have been able to beat the cheapest fix with a super-cheap online tariff (though as I explain below, in that case just ditch your fix).Yet this risk must be balanced against prices not falling, or even rising again and you having missed out on the chance to freeze prices at the current level.

    For most people running tight family budgets it’s better to ensure there’s no risk of hikes, paying at a level you can afford, than to play the market in the hope of gains if prices drop.

  • If energy prices crash, the only risk is the exit penalty.

    Let’s take the most extreme scenario that could work against fixing; that after this round of 20% ish price hikes, energy prices then fall by 50% – so you’ve locked in at a rate that’s too high.

    Actually all that happens here is you pay the exit penalty of around £30 to £50 per fuel to leave – an amount that should at the minimum be covered for most people by the savings in the short term due to the initial price hike.

    In a way fixing is balanced in the consumers favour (provided you get a good price). Your lock-in is absolute, the energy companies can’t ditch you from it if things go against it, but if it’s wrong for you – you just pay a fee to leave.

  • The last time prices rose then fell – people who fixed were still the winners.

    In early 2008, wholesale energy prices began jumping just like now, cheap fixes were being pulled just like now, so we were again then suggesting people consider capping.

    Then British Gas set a trend followed by others, announcing its biggest price rise EVER: gas UP 35%, electricity UP 9%. Further rises were expected the following January, yet the recession roller-coaster actually meant rates were then cut by 10%, although this still left most prices higher than when people capped.

    This meant everyone who capped or fixed their bills got peace of mind and according to a comparison industry report in February 2009: "Households that took out a fixed rate plan in July 2008 are currently paying £143 a year less on average than households on standard plans" – so even after that scenario people had still gained – though of course this can’t be used as a prediction.

So in summary, if you want peace of mind, then getting a cheap fix is still absolutely the right thing to do. 

There is however a slim chance that in hindsight it won’t end up having been the very best deal for you – so you need to balance the risk that you’d have to pay exit penalties to leave, against the guaranteed protection from any hikes. (For what to do if you don’t want to fix, but still want to save money, see the Cheap gas & electricity guide.)


Posted in Consumer, Money, Uncategorized | View Comments

Tackling Treasury Minister Mark Hoban on bank charges, savings, mortgages & more

August 8th, 2011 by Martin Lewis
Tackling Treasury Minister Mark Hoban on bank charges, savings, mortgages & more

Tackling Treasury Minister Mark Hoban on bank charges, savings, mortgages & more

Financial Secretary to the Treasury Mark Hoban is the man in charge of banking, saving and financial services for the government. I went for a one-on-one interview/ meet with him a couple of weeks ago armed with your questions on mortgages, pensions, savings, debt advice services and more.

The full transcript is below – there’s lots of interesting stuff in there. I’ve just picked out a couple of the most interesting points (although do let me know what you found most revealing via the comments at the end):

One of the things that is important is that we carry out a broad economic policy which means that interest rates are kept as low as possible for as long as possible" – this was said in the context of mortgages when I asked him what he thought low interest rates would mean for savers.

On bank charges, I asked him about some banks still charging £35 a pop. He said:

I think we’d like to see more movement on a voluntary basis, having the banks tackle this problem, but we’ve made it clear that if that doesn’t work, then we will legislate."

To skip to different topics please use the anchors below:

Here’s what he said in full…

(This has come from a transcription service and while we believe it to be an accurate account we cannot validate it).

Section 1: Mortgages

Martin: One of the big subjects is what I call the mortgage time bomb. We’re in the position where lots of people are struggling to remortgage because the LTV demanded is high, house prices have dropped, the market is nowhere near as competitive as it used to be and at the same time, while they’re feeling relatively comfortable now because their rates are set at four or five per cent above base rate and base rate is at half a per cent, if rates jump back to the traditional 5% type level, they’re going to be locked in on nine per cent, ten per cent deals that they simply can’t remortgage from. Do we not run the risk of a time bomb here, of people simply being unable to afford their mortgages because they’re far too expensive and shouldn’t we be doing something now, rather than waiting until that happens and what do you plan?

Mark Hoban: I think you’re right. I mean, I think a lot of people now are in positions where because of the low base rate, their mortgage payments are affordable but the way in which the recession runs its way through, people are working less, doing less overtime. So we’re very conscious of this issue and, of course, one of the things that is important is that we carry out a broad economic policy which means that interest rates are kept as low as possible for as long as possible. If you compare where you’re at in the UK to the markets elsewhere in Europe, if we hadn’t taken our action on fiscal policy, we’d have faced higher market rates of interest, which would have fed their way through to mortgage payments.

Martin: I understand that, but despite the historic low base rate, at some point, they will go back and what I’m most concerned about is this margin over base rate that people are now paying on their mortgages and the inflexibility of the market for people to be able to move away from those.

Mark Hoban: Talking to some lenders, I think there’s a bit more competition in the market. It was very competitive leading up to the financial crisis and home ownership fell actually in the run up to the financial crisis, but I think the mortgage market is showing signs of being more competitive. Competition is important and we want to do what we can to stimulate competition. We extended the mortgage interest rate relief scheme for those who found it difficult to pay their mortgages. It’s also important we make sure borrowers have access to good quality financial advice.

Martin: It’s interesting you say that because the mortgage broker market has been absolutely decimated by the financial crisis and with lenders offering primarily direct-only deals, so there are far fewer brokers out there and brokers are really struggling because they’re being killed with this.

Mark Hoban: Yeah, but I also think there are other sources of advice, as well, which are available and often to people who are suffering with financial stress from the likes of the Citizens Advice Bureau, and Consumer Credit Counselling Service.

Martin: I accept all that, but people in trouble is one thing. What we’ve got at the moment is a huge chunk of the market trapped into expensive mortgages that they don’t feel are too expensive at the moment because of low base rates, but certainly the margin between what they’re paying and base rates is huge and if we have any form of interest rate rise, then they’re going to be struggling. So I think one of the keys is, are you going to do anything to protect people? I mean, mortgage lenders have hugely increased their margins since the crunch. Are you going to be doing anything to protect people from them just keeping those high margins once interest rates bounce back?

Mark Hoban: I think that you could bear in mind that the funding cost for lenders is not base rate. The funding cost that lenders face is the money markets. You talk to a lot of lenders who are competing quite heavily to be mentioned on the best buy tables, so they can get retail money in, so there’s quite a careful equation here. Lenders have got to be able to attract funds into their business to be able to lend on. You talk about the demise of the mortgage broker, part of the problem there was that there was a reduction in the flow of money coming into the mortgage market and it meant that for lenders, they’d have capital to service their own direct business but they didn’t have enough capital to be able to route money through mortgage brokers. If we can get back to a situation where funding is stable, where there are people willing to re-enter the mortgage market again in terms of lenders, I think that would help provide more competition and help tackle that issue about the gap between the base rate and the mortgage interest rate.

Martin: I go back to my prime concern which is we have a time bomb, especially for people with 85% to 100% LTV, who are unable to remortgage at any competitive rate, so I just don’t see the light at the end of the tunnel and if interest rates do rise, they’re going to be locked in and I’m not hearing anything that you’re planning to do that will help them. What I don’t want to do is be sitting here in three years when it’s actually happened and say, what are you going to do to help these people? Surely we need to be looking at that market right at the time.

Mark Hoban: That’s why we’re committed to increasing competition in the banking sector. We need to get back to that more competitive market in financial services, in banking, in lending and that will encourage more to come forward and offer better rates and I think we’ve started to see some of that.

Martin: I’m getting a few questions from my users now just on the back of this. First of all, on mortgages, do you think mortgage arrangement fees are fair in any way? I mean, £699, £999, 2% of a mortgage deal. You’ve talked about competing for top of the best buy tables, those are on interest rates, yet of course, the arrangement fees, which when I started doing this were £150, £200, are now astronomical. Is there any regulation going to come in over how arrangement fees are organised?

Mark Hoban: They’re obviously wanting to make sure that the pricing of mortgages is transparent, not just focus on headline interest rates, but also to make sure they understand what the fees are and when I look at best buy tables, because I’ve got a mortgage coming up for renewal myself, you can see interest rates and fees displayed and there’s a trade off. You can pay at higher interest and get a lower fee, so I think it’s important that it’s transparent, so one of the things I’m keen to do, I’m keen to make sure that the FCA, the Financial Conduct Authority [which will take over from the FSA], is going to have much more transparency in financial markets to enable customers to shop around and to know exactly what that trade off is between arrangement fees and interest rates.

Martin: That of course is incredibly difficult because it makes it very difficult to compare, when you have one with a high arrangement fee, one with a low arrangement fee. I can do them, I’m sure you can do them, but lots of people can’t do the mortgage calculations themselves.

Mark Hoban: But that’s why you see on a lot of comparison websites, you know, they look at the costs, including…

Martin: But, of course, those comparison websites often don’t include direct only deals, which makes it very difficult and I think there is a real problem, when it comes to getting a mortgage. If you use an independent mortgage broker and then you go and look at the direct deals yourself because your independent mortgage broker often won’t include those direct deals because they’re not allowed to service them, you then have to go to the comparison site and it’s a very difficult system that we’ve got ourselves into because of this complexity.

Section 2: Will regulation changes hit consumers?

Martin: I’m going to move on to the Financial Conduct Authority. It’s hopefully there to help consumers and make sure there is transparency. The Prudential Regulation Authority will look at the economy as a whole. There is a worry that the PRA, which can overrule the Financial Conduct Authority, will do so in a way that’s anti competitive. Let’s take the LTV issue, it will stop mortgage lenders coming in and lending money at higher LTVs, even when it’s remortgage business, so there’s no additional increased debt, that’s something that’s been talked about. How are you going to marry making sure that the Prudential Regulation Authority doesn’t simply act big picture and kibosh consumer interest?

Mark Hoban: Well, the Prudential Regulation Authority is there for safety and soundness of, particularly, banks and insurance companies. You’ve got the Financial Policy Committee which will have a responsibility for macro-prudential regulation to look at the stability of the financial system and if you look back to the start of the financial crisis, what we didn’t have in place was someone looking at the system-wide risks of instability and having the tools to tackle them. In terms of tackling LTVs, no-one has the power at the moment to cap the loan to valuation on mortgages and if that was going to be a rule used by the Financial Policy Committee, it would have to consult on that and go through quite a rigorous process of consultation and discussion before we gave it the powers to do so. We wouldn’t want anyone to think that regulation of LTVs is around for a while, but clearly we want a much more stable model of financial services.

Martin: It’s important from my perspective and I think unfortunately, you talk about Financial Policy Committee and then Prudential Regulation Authority and then at the bottom, in that tree, the Financial Conduct Authority, which is the one that has the consumer remit and I do worry slightly in this new set up, consumers are at the bottom of the pile.

Mark Hoban: No, that’s not true. No-one should think that the Financial Conduct Authority is subservient. They are a…

Martin: The PRA can overrule them?

Mark Hoban: In very, very limited circumstances.

Martin: But it can.

Mark Hoban: Only when there’s a particular conflict between prudential business issues, and if it does overrule it, it has to be open and transparent about why it’s doing so. I think the vast majority…

Martin: But by definition that would count as subservient.

Mark Hoban: No, it’s not, because the situation in which there’s that conflict between the two is very limited. I think most consumers will find the Financial Conduct Authority will monitor the way in which firms relate to their customers and we’re going to give the Financial Conduct Authority the power to intervene on particular products. I think consumers will see the FCA as a body that they will turn to and one that will have a much bigger impact on their lives and I think the FCA will really look to the heart of the financial system.

Martin: I wait with my eyes open to see if that actually works. I’ve lots of questions about the timing of that, but that’s a discussion for another day, I think.

Section 3: Savings interest

Martin: Now, just to throw something back, you did say before that you are concerned, that you want to keep interest rates as low as possible for as long as possible, so a question from Chorley. How did you expect people who did the right thing by saving for their retirement to live off the interest of those savings when the Bank of England is only helping those who are in debt with the continuing low interest rates?

Mark Hoban: Yeah. Well, as I said earlier, low interest rates are important, they will help the recovery. I think a lot of my constituents are pensioners, they’re concerned about the effect of low interest rates on their savings and that’s why I think it’s important pensioners are able to shop around, see the rates they’re charged. That’s one of the reasons why we’re keen to respond to the super-complaint from Consumer Focus about lack of transparency on Isas. The FSA is saying that from the end of this year, banks should put interest rates on statements so that people can shop around much more.

Martin: Many people are also saying they’ve worked very hard, they’ve paid income tax on their earnings, they’ve then saved it and then they’re going to have to pay tax again, even at pitiful interest rates. Why is tax so high on savings?

Mark Hoban: Because if you think about the various sorts of things people have in retirement. Pensions: they’re taxed when they draw down their pensions, but they get very generous tax relief to enable them to build up their pensions and, of course, there’s quite significant tax advantages around Isas as well, so it’s not so cut and dry as paying lots of tax on their pensions.

Martin: But this is how people are feeling.

Mark Hoban: Yes, absolutely, but I think it’s important to recognise there are quite generous tax reliefs in the system to help those, to reward those through the stage of their retirement.

Martin: Now, it’s very interesting, something you said, because it’s an issue I’ve been campaigning on for years and we had 60,000 people write this on the Number 10 website about three years ago after a petition I launched about interest rates on savings statements. It is abhorrent that banks do not have to put the interest rates on savings statements. You said this is changing. I don’t believe that or I’ve not heard it. It’s a big campaign of ours. It is a disgrace I have to go onto my internet bank account, click a link, but then there’s 40 different accounts and I have to know which one my account is to know what interest I’m being paid. When they’re clever enough to work out how much interest I’ve actually accrued, when they say it’s difficult, I think they can be clever enough to tell us…

Mark Hoban: My understanding is that from the end of this year, the FSA are requiring banks to disclose interest rates on their savings.

Martin: It’s definitely on ISAs but not savings.

Mark Hoban: But my understanding is that it will be on statements [FSA guidance states from December providers "should" publish the rate on statements but this is only guidance, not a cast-iron rule].

Martin: It is required on ISAs, not on standard savings accounts. Can I have your commitment that you will push for that to happen on all savings products?

Mark Hoban: Yes, you can, because I just think it’s really important that people know what the interest rate is on their savings, so that way they can start to shop around and you know…

Martin: Well, it’s probably the reasons they don’t shop around because they haven’t got a clue.

Mark Hoban: Exactly and something we’re passionate about is making sure we use transparency to enable customers to shop around, to know how much they’re being charged and what sort of returns they’re getting.

Martin: Yeah. Well, we’ve been campaigning on it for years, so I’m delighted to take your firm commitment on that one way or the other.

Martin: Savings safety, is a great concern for everybody. We’re now up to a safe savings limit of £85,000 per person, per financial institution. But one of the great confusions that many people still face is what is a financial institution? For example, Halifax and the Bank of Scotland is one financial institution, whereas sister banks RBS and Natwest are two financial institutions. This vagary and complexity is everywhere. There is no list of financial institutions on the FSA’s website. The European Parliament is discussing changing the system, so that you will have one bank licence, per bank. Until recently, I believed the UK Government was going to vote against this and it’s now decided to abstain on this. Why isn’t it voting in favour? Why shouldn’t we solve this complexity issue and actually have each bank having its own licence for savings safety protection? 

Mark Hoban: You’ll find in Europe for example, they wanted to allow a longer period between when a bank fails and when it deposits transfers. We’ve actually pushed for a shorter, seven day period and we’re going to stick to that. The debate about brands and banks has yet to be resolved. I understand the point you’re getting at and it’s going to be discussed.

Martin: But I hear the answer is not to vote in favour.

Mark Hoban: A number of banks do operate on a standalone basis per licence and that’s when the £85,000 safe savings applies per licence. But I think it’s important that there is information out there to help customers. I’m surprised the FCS doesn’t have a list on its website.

Martin: It doesn’t and the FSA only has a register. I have a friend who works as an investment banker in the city who called me up trying to work out what the list meant, which shows how complicated it is if a very literate, financial consumer couldn’t understand it. We [MoneySavingExpert.com] have a tool to help people.

Mark Hoban: The FSA needs to make it much clearer to consumers about where this £85,000 safe savings applies.

Martin: We have offered to work with the FSCS and have a joint tool with them, but we didn’t get very much back. On this point though, while you’ve talked about savings clarity, if the FSA is going to mandate banks to tell people what their interest rate is, should it also not mandate banks to tell people what accounts are linked? So, if you put money in the Halifax for example, it tells you that you are protected up to £85,000. They say your money is safe, but they don’t talk about protection and they should be made to, as in that example you’ll actually only be protected for up to £85,000 per person in the combined Halifax, Bank of Scotland and any other accounts that are linked to it. That should be something banks must tell you.

Mark Hoban: I think there is a rule on that at the moment. It’s really important that banks are clear about the extent to which customers are protected by the compensation scheme and the FSCS earlier this year launched an advertising campaign to raise awareness of this, it’s still got some way to go and it shouldn’t just be down to the FSCS. I think banks have a role to play in this too.

Martin: So, just to push on that, the key is, if for example I’m a Halifax customer, then I really don’t care about RBS protection because I don’t have any money there, but my bank needs to tell me what linked institutions are and that’s one of the great problems out there, that the bank doesn’t. I know you’re not going to commit at the moment I can see it in your eyes, but I would push you to have a look at how that is communicated from the bank sector. When I put money in the bank, I want to know what other banks are linked to it under its licence protection and I think that’s not a difficult thing for them to take into consideration.

Mark Hoban: I’m seeing the BBA later this week, so I’ll raise that.

Martin: That’s very kind of you, thank you.

Section 4: Bank charges

Martin: We’re going to move off the mortgage and savings type issues for the moment and stick with some of the big picture stuff. Bank charges. We’ve spoken about this in the past. There are still a lot of people who have been burnt by this system that effectively cross-subsidies from the poor to the rich and penalises people, and they have snowball charges of hundreds and thousands of pounds. Then there was the Supreme Court technical ruling that said bank charges didn’t need to be fair, rather than that they were fair. Is that all closed forever from your perspective, for people getting back money that they’ve already paid out?

Mark Hoban: What we’re fixing on is how to tackle this problem going forward in the light of the Supreme Court case judgement.

Martin: Under one law?

Mark Hoban: Yeah, but the Supreme Court is the highest court in the land, that was the view that they reached.

Martin: We have legal advice saying that under The Consumer Credit Act, there is a fairness duty. I don’t think we ever fully tried this out in court. It was just under the Unfair Terms in Consumer Contracts Regulations that this ruling went and I do think there is still a large amount of doubt over this. Having said that, the banks got there, had their day in court and they won on that particular ruling, so I accept the point that the Supreme Court ruled on one point of law, but I don’t think we’ve ever fully tested all the law on this.

Mark Hoban: No, but I think what we should do is actually look forward and say what can we do to make this work for the better, to try to put the pressure on banks to reduce their charges and I think we’ve seen quite a bit of progress being made since that judgement to help tackle this area. I think the average costs have gone down from about £34 to £14.

Martin: And the structures have changed, in general I will accept it has. Certainly, the one thing that the campaign to reclaim bank charges did was pressurise banks and help politicians pressurise banks into lowering bank charges across the board, so what would you say to someone like the Clydesdale and Yorkshire Bank, who still charge £35 per transaction, rather than many of the others, who now do it per day on lower amounts, do you think it needs to get its act together?

Mark Hoban: Well, I think that banks should look at their charging structures, I think that…

Martin: Because that hasn’t changed at all.

Mark Hoban: No, and I think that a lot of banks have made progress on this. I think what we’d like to see is more movement on a voluntary basis, having the banks tackle this problem, but we’ve made it clear that if that doesn’t work, then we will legislate.

Martin: And what’s the timescale on that legislation?

Mark Hoban: Well, we published a consultation document last year on a series of issues around consumer credit. We’ve been working with the banks to find a way in which we’ll take action on a voluntary basis, as happened previously. I think that there are some big challenges elsewhere around and obviously the Independent Commission on Banking is going to report in September, but I think that switching, that transparency costs are important disciplines to have. Banks show that they’re sharpening up their act to give consumers much more power and choice.

Section 5: Consumer Focus and debt advice

Martin: Now, Consumer Focus, is an organisation that I’m a great supporter of and I have to say I think it’s an absolute tragedy that it’s going. Some of its functions are being moved across to Citizens Advice [CAB] but we now have less than a year left of the Financial Inclusion Fund [Treasury funding to debt advice services] and there is real potential here, both for people to focus on individual issues and to take those issues on in the way that Consumer Focus did. Debt counselling lags in a recession, so we are in the peak time to look into this at the moment and funding and a lack of security in that sector is a nightmare. Where do you see this going forward?

Mark Hoban: We’ve been working with the Money Advice Service and looking for them to take on responsibility for debt advice.

Martin: So you’d take that away from CAB?

Mark Hoban: It would be funded through the levy on financial services businesses and so, in effect, what the Money Advice Service would do is take on the role that it has had, up until March next year in that co-ordination.

Martin: So the Financial Inclusion Fund is now being given by BIS, not the Treasury?

Mark Hoban: The previous Government Financial Inclusion funding came to an end in March this year, which gives funding until March 2012.

Martin: And then?

Mark Hoban: And then the Money Advice Service will take responsibility for the co-ordination of debt advice and it will be funded by the industry.

Martin: And will it be the same amount of money [as the FIF]?

Mark Hoban: What we would expect the Money Advice Service to do, is to work with CAB and the providers to think about how the service should be delivered, about availability, access to the service and whether there are better ways of providing the service. The Money Advice Service is very clear that the face to face advice element of CAB is really important, but it’s not the only way we should get debt advice to people.

Martin: With regards to Consumer Focus, is there any chance of a reprieve there? It is a mistake, you should not be doing closing it down, the money used to fund it is pittance compared to the amount of help it can give to consumers. Can I ask you to rethink it?

Mark Hoban: That’s a matter for my Government colleagues in BIS to think about.

Martin: Can I ask you to put pressure on them? It’s a very small amount of money.

Mark Hoban: I know that you’ve been to see Ed Davey [MP] and I’m sure you raised that question with him. It’s down to departments to decide how to use allocated funds.

Section 6: Basic bank accounts

Martin: Onto basic bank accounts. I know you’re passionate about financial inclusion, as am I, but many people don’t have bank accounts and that’s a worry. The biggest problem these people have is that they apply for a bank account and instead of being given a basic bank account, even if they say they’ve got a bad credit score, they are given normal bank account forms, which they then get rejected from.

Mark Hoban: Yes, some banks are better than others. The financial inclusion taskforce did do a lot of work around industry shopping to gauge how good banks were at meeting this need and I think there’s some real challenges around financial inclusion and it was interesting that the last piece of work the taskforce did found that in view of the concentration of people without a bank account, it tended to be those in poorer sectors of society, people who were disabled, single parent families, older people, but that’s one of the reasons why Iain Duncan Smith, the secretary of the DWP, is taking the lead on financial inclusion.

Martin: My immediate solution to it is, if you apply for a bank account and you’ve got all your ID and you’re rejected for the main bank account, why can you then not be offered a basic bank account? There’s no credit score issue, that’s the whole point of basic bank accounts, you can’t go into an overdraft. Nobody who has ID should be rejected from a bank account in this country.

Mark Hoban: That’s something that we would have to look at in different banks’ procedures, but some banks are very good at this anyway.

Martin: But lots aren’t. I can give you 1,000 examples of people that get rejected in this way.

Mark Hoban: Sometimes it’s about actually making sure the messages that CEOs give out are actually followed down the line.

Martin: Which they’re not.

Mark Hoban: That’s part of the challenge, and that’s why banks and other financial institutions really need to tackle financial inclusion.

Martin: It’s an easy commitment that they should just offer a bank account to everyone. The solutions are there, the problem is that we need to push for this to happen.  

Section 7: Bank transfers

Martin: Ok, two quick ones, first of all from Red Sky, can the Government produce some legislation which makes banks transfer all money transactions via the faster payments system, the same day without any limit being imposed on the transfer amount?

Mark Hoban: The faster payments system is coming in, in January 2012, so let’s see how that works first.

Martin: If they don’t deliver in January, what are you going to do?

Mark Hoban: Well, I think it’s a big issue for the Payments Council. The whole cheque fiasco sent a very clear signal to the Payments Council and the banks that they need to sort out the payments system in this country. In this day and age, it should be easy to get payments made quicker and I think banks need to demonstrate, if they want to rebuild that trust from consumers, that they make these payments quickly and efficiently and they market this service to people.

Section 8: Pensions

Martin: Mike04021949 says: "I was stupid enough to be born in 1949, when I retire in 2014, I shall do so too early to qualify for the Government’s super duper proposed £140 flat rate pension, any plans to revise this for me, Minister?"

Mark Hoban: The DWP [Department for Work and Pensions] is touching on this issue. I think there’s a real challenge about putting this scheme in place with people who have already retired and it really focuses on those who have yet to retire, but there’s a consultation process on that at the moment.

Section 9: Foreign exchange regulation

Martin: Why aren’t foreign exchange, Bureau de Change companies regulated?

Mark Hoban: Because they are perceived, or were perceived until the collapse of the Crown Currency Exchange, as relatively low risk businesses and many people do use them and if you go and buy your foreign currency using cash or a debit card, they’re still viewed as low risk. Crown Currency Exchange had a particular business model, which led to greater risks and we’re trying to work through some of the lessons we’ve learnt from that.

Martin: But you’ve just said the basic issue with online ordering of Bureau de Change, which is obviously going to get bigger and bigger, is that there is money in transit.

Mark Hoban: But at the same time, regulation has to be proportioned. It’s very easy to say let’s regulate it, but let’s just think very carefully about what the cost…

Martin: Mandated ring-fenced bank accounts would be very helpful. I think that would be one of the solutions; that your clients’ money goes into a client account and that isn’t subject to the overall assets.

Section 10: Online ID requirements

Martin: Last question – you go to set up an online bank account and it asks you for printed statements from your other bank accounts, but all your other bank accounts and credit cards give you online statements, which aren’t accepted. What are you supposed to do in this virtual age, when you’re trying to become a virtual consumer in a paperless environmentally friendly world, but everything you need to apply with has to be in a hard format? 

Mark Hoban: The detailed rules around money laundering and things like that are industry driven and it’s something that the industry needs to look at quite carefully, to make sure they get the right checks and balances in place and that it reflects on the business they do.  

Martin: It’s bonkers.

Mark Hoban: I mean, you know, we have deliberately, given discretion over this and how these things work and they think quite carefully, when you’re moving to an online age, how to best do this.

Martin: Thank you very much for the interview.


Posted in Consumer, Money, Politics, Uncategorized | View Comments

A ‘cut the baby in half’ decision – their life, but my choice

August 4th, 2011 by Martin Lewis

'Pay off my debts? Or go on holiday?'

'Pay off my debts? Or go on holiday?'


It felt a bit like being asked to be King Solomon of finance on Radio 5 Live today. A woman emailed in with a: ‘Pay off my debts? Or go on holiday?’ family dilemma and said they’d do whatever I told them…

This was a big departure from my regular weekly 12pm Consumer Panel slot. It’s always fun and I suppose it’s because we all get on so well that they had no qualms throwing me this doozy of an email from listener Carol, live on air – far from my usual factual type questions…

Hi Shelagh can you ask Martin to settle an argument between my husband and I? In September our youngest goes to school – this will reduce our childcare costs by a whopping £600 per month.

I have no problem putting that towards our loans, credit cards etc. BUT I would like to take 1 month’s worth and put it towards a holiday, as we haven’t had a holiday on our own ever and haven’t had a shared family holiday in 2 years."

My husband thinks it should all go towards paying off debts. We will abide by Martin’s decision – what should we do?"

So live on air I had to make a decision. What would you’ve done?…

TO GIVE YOU TIME TO CONSIDER YOUR ANSWER – SCROLL DOWN

 

 

 

 

SCROLL A BIT MORE…

 

 

 

 

JUST A LITTLE MORE…

 

 

 

 

LAST BIT OF SCROLLING…

 

 

Initially I talked through the question, to buy myself some thinking time. Both Shelagh and Dominic Laurie (business presenter) said: "If you ask me, I’d say take the holiday". I hope it wasn’t too arrogant that that I said: "That’s the reason they didn’t ask you – this is all about guilt, she wants permission from the ‘Money Saving Expert’ and if she gets it they won’t feel guilty taking the holiday, it’s a confession thing."

All that bought me enough time to come up with my solution which was:

You can have a month’s worth of the cash for a holiday, but not now. You need to repay the debts for the next six months to get yourself in the habit of doing so – if you do that successfully then you can reward yourself using the seventh month’s money for a trip"

My logic is, that if you use the first month’s extra cash for the holiday – it’s the start of a sticky spending slope, as it becomes normal not to have the cash, so making yourself repay it in future is tough. What’s needed is to first build the financial discipline of repayments and then some delayed gratification once that’s well established, and a little bit of a reward for doing it right is fine as it should be easy to go back to repayments after.

Carol emailed back to say she was really happy with the answer and they’d do it. What would you have said?


Posted in Consumer, Just for fun, Media, Uncategorized | View Comments

Have some faith in humanity…20 tales of good deeds

August 2nd, 2011 by Martin Lewis

Have some faith in humanity…20 tales of good deeds

Have some faith in humanity…20 tales of good deeds

Am I a fool for assuming most people are honest and decent? I do tend to work based on that premise, though this week’s money saving poll seems to indicate that most don’t hold this view – so perhaps the tweets below may just change your mind.

The poll question asks whether if you left your wallet in a station and went back ten minutes later you think you’d get it back, either as it was handed in, or still there.

What’s interesting, is most people say: "If I found a wallet I would hand it in", yet the vote result shows they assume everyone else wouldn’t.

In this I’m an optimist. I’ve left my phone and wallet in the back of a cab before and have had the driver bring them to me. Of course, there are bad people in the world, but not everyone is in my view. Having noted this on my Twitter page I was inundated with other tales of nice fellow citizens, here’s a few (unedited), maybe we’re all just a little bit too cynical about the rest of our species…

1. I saw someone lose a HUGE wad of notes from her back pocket & ran after her – it was sponsorship money she was about to bank

2. I once found a gold locket and chain in the street. I opened it up and actually knew the person in the picture and returned it

3. I handed in a guys wallet to a police station. Three weeks later, he sent me a Christmas card and £10 as a thank you.

4. I once found a handbag left on a bus. I looked in it for a mobile, rang ‘home’ and arranged for the owner to pick it up :)

5. I dropped my purse as I was getting in to my car (heavily pregnant & on crutches). Girl on a bike picked it up & left quickly! "(OK, you can’t win ‘em all – ML)"

6. I left my bag hanging on a trolley in the trolley park twice and got it back. I’ve also handed in lots of items, wallets etc

7. Dropped my wallet getting out of a taxi once. A couple found it & returned it to address found inside. Very honest.

8. We found lady’s iPhone last week, she came to collect it from us. She said this was 4th time she’d lost it & it handed in! :)

9. My grandmother is forever losing things while out… keys, purse, you name it. Thankfully, none of them have ever been stolen.

10. What depressing results so far. I’ve lost my purse twice and it was handed in to local shops. Surely this isn’t so unusual?

11. My colleague had his returned last week with the £40 and his cards he had left in. More faith in humanity required I think!

12. I recently left iPad at Gatwick and it was handed in by a very honest person.

13. Over the years I’ve lost my wallet twice & its always been handed in. I always ask police for name & send a voucher / card.

14. My sis found over £1k. She handed it in to a police station MUCH further away to guarantee cash after 30days of no claimant. "(Hmm need to think about that one – ML)"

15. Few months back my partner had wallet returned. Lady found us on facebook from name on driving licence and sent a msg…

16. I dropped my sunglasses in B’ham y’day, a nice Chinese man ran after me to give them back, so thank you to that man, i need em

17. Lost my mob & founder phoned a mate (contacts), told him where I work & it was dropped off at recptn. No chance 2 thank him

18. I leave my wallet and keys on the kitchen table every night. My wife nicks the change every morning. "(Mine too – ML!)"

19. I handed in someone’s wallet and iphone on holiday :) My thinking was If I do it, someone will do it for me :)

20. Someone handed a tenner they found in a busy bar to me. I announced it to a room of 150, the owner got it back.


Posted in Just for fun, Uncategorized | View Comments

Do you think you’ve been mis-sold gas and/or electricity? If so, please let me know how

July 28th, 2011 by Martin Lewis

Do you think you've been mis-sold gas and/or electricity?

Do you think you've been mis-sold gas and/or electricity?

Over the last few years energy mis-selling has been rife – the industry says it’s getting better – but that hasn’t stopped millions from being duped. This week alone British Gas was fined £2.5 million for poor complaints handling. Npower, SSE, Edf and Scottish Power are being investigated for mis-selling. We’re planning to launch a major new energy mis-selling, reclaiming guide and need your help.

My question is a short one…"If you feel you were mis-sold, how was it done?" Was it being asked to sign for a ‘quote’ and actually being switched over? Or, being told the company was the cheapest and it wasn’t? If you feel you’ve been mis-sold, please explain how using the links below – so we can add this to our list of scenarios to help you and others in the new guide.


Posted in Consumer, Uncategorized | View Comments

Bought a spa day from Groupon or others? Did you get it?

July 26th, 2011 by Martin Lewis

Bought a spa day from Groupon or others? Did you get it?

Bought a spa day from Groupon or others? Did you get it?

The daily deals industry needs to get its house in order. Groupon, kgbdeals, LivingSocial, Crowdity and the rest all risk being seen as ‘get the money in the bank, not the customer through the door’ merchants, unless they collectively improve standards.

Over the last year it has been boom time for daily deals sites (once known as group buying sites, but the collective purchasing element’s fast disappearing). These sites negotiate with companies big and small to offer hyper-discounted vouchers for massages, spas, dental treatments, retailers, activities and more, in return for exposure to their huge databases.

It sounds great and indeed they do provide fantastic unbeatable bargains often at a quarter of the list price. We commonly include the best of the national (not local) deals in the weekly email. Yet we have access to information most consumers don’t. When deciding whether to include something we interrogate the company about the capacity available, to try and ensure that if someone pays they should be able to get it.

Yet I’m conscious that by mentioning these sites’ national deals, we provide a path into their daily local offerings and many of our users will then join these sites and start getting them. That’s one of my prime worries and reasons for this comment.

Too many pay for deals they can’t get

No industry is free of complaints in forums or via social media. Yet what I find surprising with daily deals complaints, including from many friends, is the constancy of the problem. Using spas as an example, it tends to go a bit like this: "I saw their ad for "get an £80 massage for £20 at scrumyum spa", signed up to it and then got my voucher."

All good so far. Yet often you then hear this: "I kept trying to ring scrumyum. It’s a small spa a few miles away but they’re constantly engaged and not responding to emails." This is of course no surprise, as thousands may have descended on it trying to get their mega-discount. Even those who do get through may then be told: "There are no appointments available for months", leaving the impulse driven treat to be lost in the mists of time.

Of course not every deal fails like this, I’m sure the majority work smoothly, yet the volume of complaints feels like it is growing as the industry increases in size.

These sites are usually good at giving refunds (though it takes time, which means it’s cash in their bank not yours), but this requires you to ask – I suspect a decent proportion of people just let the vouchers go and forget – do let me know if this has happened to you.

In fact, I’ve heard of some retailers having to agree that if the individual doesn’t redeem a voucher, the daily deals site keeps all the cash and none gets passed on to the firm (eg, scrumyum spa). If true, it can mean consumers not fulfilling vouchers is the most profitable outcome for the daily deals site (I’m not suggesting it’s done deliberately, just that there isn’t a vested interest in working hard to stop this happening).

What we’d like to see happen

As a fan of daily deals sites and the opportunities they provide to consumers to get extreme discounts, I want to see the industry thrive. Yet, for that to happen in a fair way to consumers it needs to address this issue of managing capacity and to give the consumer a legitimate expectation that if they pay for a deal, they will be able to use it within a reasonable time.

Therefore, here are my thoughts on a code of conduct I’d like to see daily deals sites adopt:

  1. Retailers have the capacity to fulfil all vouchers. You should always cap the number of vouchers sold for a deal to a number that can be fulfilled in a reasonable and timely manner. And to stop working with any retailers who regularly don’t deliver.

  2. Customers get a full refund where the service has not been fulfilled. There should be no time limit on these refunds, provided customers have attempted to fulfil them in a reasonable time.

  3. The cap should be published for each deal. This would allow people to take a decision as to how busy the service is likely to get.

  4. If providers go bust the refund should be automatic. Daily deals sites work with many small companies and in our current economy that means some will go under. When this has happened we’ve heard of daily deals sites that haven’t contacted consumers and offered automatic refunds, they’ve waited until they’re claimed. That’s not appropriate.

  5. It should be published how many people taking up the offer, the retailer can serve each day. This would allow it to be easily seen how tough it could be to get an appointment. For example if it is a massage on offer, how many therapists are there? And how many massage beds are available?

  6. Retailers do not increase prices. If a voucher is sold that allows people to redeem a cash value (e.g. spend £15 and get £50 to spend in store), the company must guarantee it will not raise its prices during the voucher redeem period – otherwise this is misleading when consumers sign up.

Over the next month or so, the MoneySavingExpert.com team will be speaking to all the main daily deals sites to ask them for their view on this code of practice and if they choose not to adopt it, what they will do to ensure they are adequately managing capacity.

In the meantime I would suggest if you are using these sites, ask yourself whether the deal is one that could easily be fulfilled if many others go for it. If it’s £15 for a £50 voucher at a UK high street store – that’s great. If it’s selling a go-karting experience that only allows 5 people at a time, are you sure you’ll get a slot?

I would like to hear your experiences bad AND good about these sites, as well as any suggestions you have that we can pass to them for improvement via the links below.

MSE Insert: Comments are taking longer to approve than usual due to problems with a third party server. We apologise for the delay and thank you for your patience.


Posted in Consumer, Uncategorized | View Comments

Message from an 11-year-old about uni made my eyes leak a bit

July 22nd, 2011 by Martin Lewis

Message from an 11-year-old about uni made my eyes leak a bit

Message from an 11-year-old about uni made my eyes leak a bit

OK, I admit I’m a soppy git, but I just got sent this message from the Transformation Trust as feedback after speaking at their huge Rock Assembly at the O2 Arena the other day. This wonderful charity gives children from underprivileged backgrounds the chance to do things they wouldn’t otherwise. (See my Opening a rock concert in front of 16,000 blog for more).

Today was an amazing day! When I first got into the O2 Arena I saw lights, lights and more lights! It was fantastic! All the acts were fantastic but Chipmunk was the best! I was so happy to hear that anyone can go to university because my mum doesn’t have much money and I don’t see my dad at all.

I love singing and dancing especially hip hop. I used to go to Zoo Nation but it was too much money. I am going to try really hard in my new school as I want to do well and go to university so I can have a good job like some of the acts on stage."

My eyes got very wet when I read it – must be allergies.


Posted in Just for fun, Uncategorized | View Comments

The Janet & John Eurozone sovereign debt crisis explanation

July 22nd, 2011 by Martin Lewis

The Janet & John Eurozone sovereign debt crisis explanation

The Janet & John Eurozone sovereign debt crisis explanation


What on earth is going on in Europe? We know there’s a Greek crisis, but what’s the cause and why does it affect us? It’s time to call in Janet and John…

I was on the BBC Radio 5 live consumer panel (every Thursday 1pm) with Shelagh Fogarty yesterday, when business presenter Dominic Laurie did a grand job of explaining what was happening in the Eurozone and why we are all affected.

Yet there were still texts from people saying they didn’t get it, so I volunteered to distil it into a Janet and John version. People seemed to like it, so I thought I’d put a slightly more detailed version here…

Imagine the world is a street. At one end are a group of neighbours who call themselves ‘The Euro Club’ who all have a pact that if they get into financial trouble they’ll help each other out.

"The Greek fella at the end has been spending a lot more in recent years than he can generate, and now he’s majorly in debt and close to going under – and a few of his neighbours like Ms Portugal aren’t that much better.

"The problem for the others in the pact, is they’ve promised to help Mr Greece and if they don’t their credit rating is linked to Mr Greece and if they don’t help it’ll hurt them too.

"Yet even for those up the street who aren’t in the pact. The truth is everyone’s lent money to Mr Greece and his chums, either personally, or their banks have and if he can’t repay then that could really hurt them.

"Not only that but with so few people in the street, they all rely on each other to spend on their businesses. So when someone is skint, or worse you worry that their cash is worthless, it has a massive knock on effect for everyone and could see lots of them really struggling to make ends meet."

Then yesterday we had the bail out, so I suppose to continue it is:

Now Mr Greece has been given a consolidation loan by his buddies. They’ve changed his debt into one low monthly convenient payment at a lower rate spread over a longer period in the hope he may be able to get his act together and repay that – as if he went bankrupt they’d never get owt back."

So that’s my attempt to explain it, (and do note, in real personal finance consolidation loans are often NOT the solution) now I’d love you to help.

PLEASE ADD YOUR OBSERVATIONS AND POINTS BELOW – IN JANET & JOHN STYLE.


Posted in Money, Uncategorized | View Comments

Getting boos from 16,000 people about student loans was quite an experience…

July 21st, 2011 by Martin Lewis
Martin Lewis opening the Rock Assembley at the O2 Arena

Martin Lewis opening the Rock Assembley at the O2 Arena

It’s not often I get to say: "yesterday I opened at the O2 Arena, for the Transformation Trust Rock Assembly". The challenge was to talk student finance to kids desperate to see Tinchy Stryder, Diversity, Chipmunk, Hadouken! and the rest. But even with the boos, I think I may have pulled it off…

Having expected 13-18 year olds, as I got to the Arena it turned out they were actually 11-16 year olds with many at the younger end of the age group – adding to the pressure, as university funding issues are a long way off for them.

But, at that point I thought what the hell, it’s better to run the very real risk of me dying on my arse, for the chance of getting crucial messages across. And actually, that nihilistic state of mind made it all a lot easier. Especially when virtually everyone I met from the Rock Assembly crew kept telling me how ‘brave’ what I was doing was.

The X Factor trick up my sleeve

Having known this would be tricky (thanks for all your top suggestions), we’d arranged a surprise bit of help. The X-Factor voice over artist, Peter Dickson, came along to do my intro (in X Factor style, playing the ‘celeb hype’ card to try and boost the attention rates) and then bring in each key point for me to explain.

Nothing quite prepares you for hitting the stage with that many people. The excitement was as thick as treacle and the noise like a wall.

I think they were just desperate for the show to get on the road – so I played an easy card first and asked whether they were looking forward to Tinchy SHRIEK, Diversity SHRIEK and Chipmunk SHRIEK - the decibels were louder than Laurence Llewelyn-Bowen’s dress sense.

Then I tried to take that momentum and shift it to: "Now shout out even louder if you want to go to University" – thankfully the shrieks continued.

We can’t let kids be scared of bettering themselves

Many schools invited to attend this charity concert have a large percentage of pupils on free school meals, as they’re from lower income families. So I went straight in, while I knew they were listening, with the meat of the message and said something like:

I’m here to tell you one thing. Whatever you have heard, there is no-one in this room, who if they get the grades and work hard, should be scared they can’t go to university because they don’t have the money. If you want to go, you can."

Hearing them cheer for this really made my day!

The boos were good news too

Tinchy Stryder

Tinchy Stryder


Then I called in Mr. X Factor to read out in his unique style the key points (each displayed behind me in 12 foot text) with me explaining each after. What was fascinating was how they keyed into each response.
  • "YOU DON’T NEED CASH TO GO TO UNIVERSITY" - CHEER

    As I explained that the fees will be paid for them by the government, there was a huge CHEER.

    But, when I went on to the fact that once you graduate, if you earn, and remember most people who go to University earn on average £100,000 more than others, CHEER, you will need to repay it, and there was an almighty BOO!

    Frankly, it threw me for a second. Yet my role as head of the Independent Taskforce on Student Finance isn’t to sell the system, it’s to explain it – so I suddenly thought hell, as long as they get the message, even if they don’t like it, I’m doing it right.

    It soon played out that it was all part of the grammar of this type of event. It’s about a vocal, good natured response that demonstrates they are engaged with what is being said (interestingly when I said the phrase ‘the Government’ there was a large boo too).

And that’s the way it went, from then on they played ‘judges’ to each of the key messages on the screen…

  • "EARN UNDER £21,000 AND NEVER REPAY" – CHEER!

  • "REPAYMENTS STOP AFTER 30 YEARS" – CHEER!

  • "YOU PAY BACK LESS, BUT FOR LONGER AND MORE" – BOO!

    The boo was especially loud when I explained that many of their generation would repay much more than current students.

  • "DONT BELIEVE THE HYPE!"

    At this point I changed the tone and took the volume down to get some silence. I explained that while they will hear lots of diverse views on the news arguing the goods and the bads of the system – that’s about the bigger picture – of the future of the whole structure.

    What they need to focus on, is that if they want to go to university and if they’re bright enough – they don’t need to have the cash and they will only repay if they earn enough once they leave.

That was it, my five minutes were up and I was off (originally I’d also planned to include "£6,000 OR £9,000 – IT’S THE SAME EACH MONTH" and "YOU GET LIVING LOANS OF UP TO £7,675", but when I realised the age group I cut these as it was too much info).

Hadouken!

Hadouken!

Overall I hope the message got across

It’s very difficult to judge how it went with so much noise and all those faces staring back at you. It got the adrenalin pumping through the system (I can hardly remember a word that I actually said). As I came off the guys from Hadouken! who were about to go on, were really kind saying how well it went.

I think I managed to hold their attention through it and get the message across. It’s especially important for social mobility that children from lower income backgrounds aren’t disenfranchised by thinking "I’ll never be able to go to uni", which can easily spiral into defeating all aspirations too early.

They need to understand that whatever their family finances, if they want to go to university it is attainable for them (lower income families actually get much more support see student loans 2012 for more info).

PS. It was filmed, so if I can get the footage, I’ll put it on here.


Tags: , , , , ,
Posted in Education, Uncategorized | View Comments

“… but if I fix my energy bill, will I be hit by a massive price hike when it ends?”

July 18th, 2011 by Martin Lewis

"…but if I fix my energy bill, will I be hit by a massive price hike when it ends?"

"…but if I fix my energy bill, will I be hit by a massive price hike when it ends?"


Two of the big six energy providers have announced price hikes to hit next month and the rest are predicted to follow. Yet going for a cheap fixed tariff means you guarantee the rate you pay now will stay the same, usually for a couple of years, which is effectively an insurance policy against prices rising.

All sounds good so far, but I’ve been surprised by the number of people questioning it saying: "If I fix my energy bill, will I be hit by a massive price hike when it ends?" I’ll be honest, I’m befuddled by this, as I don’t get the worry – so, I thought I’d blog about it to explain my thoughts (please tell me if I’ve missed the point of the problem).

It’s fixing season

This isn’t about grabbing any fix, but ensuring you go for the cheapest fix possible at current price levels before prices rises come in, so that you’re locking in at the lowest price (see Cheap Gas and Electricity for full info on how to find the cheapest tariff). Many, especially those on standard tariffs at current prices will typically pay up to £150/year less on the cheapest fixes – never mind after any price hike.

Of course not everyone will save by fixing (especially those already on cheap tariffs) and for them it’s a trickier decision – see the full fixing FAQ to work out whether it’s right for you.

The rate shock worry

I believe the problem some are having with this, is that once the cheap rate ends you’ll be slammed by an almighty cost hike – and this ‘rate shock’ at the end – could see mammoth and unaffordable hikes.

Yet this negates the fact that actually you save during the fix, and after the fix ends you’re just moving back to standard prices. To help, I’ve done a very rough illustrative table below (to explain the point – please don’t see it as a prediction) of the price moves for someone on a standard tariff fixing to the CHEAPEST possible fix right now.

Typical energy bill on standard tariff vs fix

Price paid in previous year

In 12 months (starting from August)

In 24 months

In 36 months

Sticking on current

£1,150

£1,300 (up £150)

£1,300 (No change)

£1,300 (No change)

Shift to cheap 2-yr fix

£1,150

£1,080 (down £70)

£1,080 (No change)

£1,300 (Up £220)
Rough, illustrative figures only, based on a 15% rise. Big assumption made that after the current round of price rises, they won’t move again (up or down) for next few years – this is dealt with in the fixing FAQ.

Now, looking at this illustration there are a few things we can draw from it:

  • There will be a rate shock. When the fix ends most people will be moved onto a standard tariff based on whatever the current prices are at the time. So, at that point it’s likely there will be a big hike in what you pay.

  • You will be paying that same rate anyway. However, while it’s a pay jump, you’re unlikely to be paying substantially more than if you didn’t switch, it only seems like a big price rise because you’ve saved meanwhile. Plus, when your fix ends you should be comparing tariffs again to find a new cheap one, which may be able to mitigate some of that shock.

  • You will make massive savings meanwhile. Standard tariffs are likely to rise substantially in August (Scottish Power and British Gas will definitely increase prices and the rest are likely to follow suit), so at that point (listed as Year 1 in the table) when others are seeing their bills rise, many moving to a cheap fix will see their bills fall. The savings over two years could easily be £600 (or obviously more if prices rise again – or less if they fall).

While I understand the psychological worry of the rate shock, to be willing to sacrifice saving in the short term because of it, is poor financial logic. Perhaps one solution to help smooth the worries is to put aside some cash from the short term saving (say £150 a year in the above example) for the following two years to cover the rate jump.


Posted in Consumer, Money, Uncategorized | View Comments

You CANNOT give 110% effort – an explosion of pent up nerd rage

July 15th, 2011 by Martin Lewis

You CANNOT give 110% effort

You CANNOT give 110% effort

I call on the mathematically literate to join forces to together defeat the scourge of "giving 110%". It’s a numeracy blight on the lexicon of our country and it needs to be stopped.

This morning on Daybreak, I had the joyful opportunity to vent on this. An Illinois town has banned boys from wearing baggy jeans that show off their underpants. So, we were asked what we’d ban – and this pent up nerd rage exploded from me (see related blogs for the history of this).

For non-pedants wondering why this phrasing that peppers sports vox pops and X-factor (barring JLS, who delightfully always give 100%) annoys me so much…

  • Maximum effort is 100% – 110% is beyond your capacity.

    Even 101% means you are making an effort beyond your actual capacity. Some may argue it’s justified as you’re increasing your effort beyond what you thought was possible for you – yet that’s irrelevant as the percentage is a measure of maximum output. You can still only give 100%. If your effort output has increased, you need to recalibrate, so what you before called 100% effort, should now be seen as 91% effort.

  • If it’s based on average effort, then 110% isn’t trying that hard.

    If we act generously and find a way to uncap the effort limit by arguing that the percentage given relates to average not maximum effort – then in fact 110% isn’t trying that hard.

    After all, we must assume that with roughly 1/3 of the day sleeping and much of the rest of the day not at optimal levels – that our average effort level isn’t so high. So, a 10% uplift over your normal effort is in fact a rather weak attempt, surely you should be giving 200% (double average) or 1,000% or a million, or a billion or a Googolplex percent effort? It’s all nonsense.

    In one past X-factor, crooner contestant Ray Quinn promised to give 210% and later Robert promised 150%. Did this mean Ray was going to output more effort than Robert? No, it means both of them were talking piffle.

Of course there’s a tongue in cheek element to this blog – and it could be argued ’110% effort’ has become a standard phrase (cliché) within the English language and so is permissible, we already have a nation blighted by numeracy issues. To perpetuate a misunderstanding of percentages to millions of youngsters simply isn’t good. So, it’s time we put 100% to use, to stop it. Rant over – over to you…

Related Past Blogs


Posted in Just for fun, Media, Uncategorized | View Comments

When will EDF hike its prices?

July 12th, 2011 by Martin Lewis

When will EDF hike its prices?

When will EDF hike its prices?

British Gas has done it, Scottish Power has done it and as energy companies are like sheep, that means unless there’s a radical change to world markets, four more are likely to announce major price hikes soon…

The one that intrigues me though is EDF Energy. This is the second round of price hikes in 2011. In the earlier round EDF was the last to change prices and launched the clever marketing scheme: "a freeze to keep you warm, until 1 March 2011" (see my earlier When will EDF hike prices? blog).

It’s clever because, of course, when prices are rising there’s a buzz of people going onto price comparison sites on the back of it, and due to EDF’s freeze earlier this year, it was pushed much higher up on the list than those who had just upped their prices. I suspect it churned a good deal of customers that way. Although the irony is, as it can take a couple of months to switch over, the actual gain for those who moved to it was likely to be very limited.

In the end, the price freeze guarantee only lasted a nibble longer than it had to, with EDF raising prices on the 2 March (see the EDF price hike news story).

So, the question is, will EDF Energy (or another company) do the same again with a "price freeze until October" promise? Answers on a postcard please…


Posted in Consumer, Uncategorized | View Comments

Help! How do I explain student finance to 16,000 kids at a rock concert?

July 12th, 2011 by Martin Lewis

How do I explain student finance to 16,000 kids at a rock concert?

How do I explain student finance to 16,000 kids at a rock concert?

It’s brown trouser time. Next week I’ll be speaking to a crowd of 16,000 at the O2 arena about student finance, right before acts such as Diversity, Tinchy Stryder and Chipmunk perform. Yet frankly I’m panicked over the best way to get this important message across.

It’s all part of the Transformation Trust’s big rock concert. The Trust is a charity that helps fund extracurricular activities to help kids across the country and this is its big, annual centrepiece free concert. I’ve been asked to speak in my capacity as head of the Independent Taskforce on Student Finance Information.

They’ve given me an incredible slot – 10 minutes at the start, to tell the 13-17 year olds there about Student Finance 2012 – the facts. But, this does leave me with more than a slight worry that I’ll go on stage to deafening screams of: "We want Tinchy" and not a word I say will be heard, as a bunch of bored teens yell at me to get off the stage (they’re not my usual audience after all!)

I’ve been brainstorming how we can try and get the facts across without appearing the boring old fuddy duddy getting in the way of their fun. The content is easy but the key is the presentation and treatment of it all. My favourite idea was coming on saying: "I’ve been told I’m not cool enough to talk to the youth" then bringing on a comedian to do some type of silly ‘street translation’ – but we don’t have time to put that together.

At the moment I’m thinking of using sirens, big graphics, warnings and more to make it all feel big and just going through the key bullet points. Yet any creative easy to do ideas would be more than warmly received.


Posted in Education, Uncategorized | View Comments

10k in 49:21, but still overtaken by 1,000s (then I ran home!)

July 11th, 2011 by Martin Lewis

"Mrs MSE presented me with a medal"

"Mrs MSE presented me with a medal"

Hoorah! A record time. A medal presented by Mrs MSE. An amazing atmosphere. Lots of good causes, a pair of achy legs – and getting called an ‘elite athlete’ to boot.

The British 10k race in central London yesterday morning was my first ever race and I was chuffed to smash my record from earlier in the week (see 49:59 blog) bringing the time down to 49:21, which feels fantastic. Although, actually the GPS tracker I normally measure my runs with said I did 10.4k, so I’m not quite sure how to put it on my spreadsheet (see my I love spreadsheets blog).

Being an ‘elite athlete’

I was running for Cancer Research UK and had agreed to do a couple of interviews for the charity if any were wanted (in the end there weren’t any). Due to this it meant I met the race officials in a hotel first and was rather surprised to be sent up to the elite athletes room and given a pass.

It was rather intimidating to be in a room with about 40 people, where my body fat made up about 50% of the entire room’s total. They were there stretching and moving and discussing ‘route tips’ (I did want to suggest missing out one of the loops, but didn’t). Luckily a little later a few more obviously (sorry chaps and lasses) non-elite, elite athletes came into the room, making me feel a bit more comfortable.

The starting line was scary

Having held out a few thoughts of trying to sprint 100m at the start so I could claim to have led the race at one point, there was none of that happening. The start line was a nice open pen, where you get an amazing view of the other 25,000 people waiting to race. Then, after being told the start was delayed, the front of the rest of the runners were moved up to join us.

That meant I was concertinaed between the elite runners just in front and the club runners behind who’d jostled for position. You could feel the adrenalin and being trapped between the two was more than a little intimidating. I felt like diving to the ground in a tortoise position – but thankfully trampling didn’t happen.

Overtaken by 1,000s

Of course having started at the front, there’s only one way to go…for the first five kilometres I was constantly being overtaken, thousands passed me in a never ending sea of fast legs and sweaty bodies.

The first person I overtook was at the 5k mark, by the look of it, it was a chap who’d miss-paced it and was now struggling to keep up with his earlier speed. After that thankfully things started to normalise so there were others at a similar pace to me.

While I struggled a bit around the eighth kilometre, thankfully it was close enough to the end of the race to get the buzz of knowing I was closing in and for me to kick up the pace to ensure I could beat my best time.

Mrs MSE was waiting for me at the end and put the medal over my neck. Then we walked for about 20 minutes.

But the endorphins and adrenalin were still pumping so, on the spur of the moment I handed my bag to Mrs MSE and decided I was going to run the remaining 5km home (she got the bus).

There was a little method in this madness. I know I’ve now got the running bug and am considering entering a half-Snickers. So, running a 5k on the back of a 10k seemed a perfect test to see if I was capable. Of course my pace was a lot slower, it took me getting on for 28 minutes but I made it!


PS. I don’t want to be rude, but the funniest moment did belong to the race starter, the Lord Mayor of Westminster. After making her speech (it’s a lady lord-mayor) they played the national anthem, which she duly sang with gusto, but surprisingly kept the still live microphone close to her lips – drowning out the music for all 25,000 people.

Now to be fair even Charlotte Church would’ve needed to be on form to make it sound good for that stadium sized audience – never mind what I’ll politely call an enthusiastic amateur – there were many wry smiles and the odd wince all around. Still good on her for giving it her all.

Posted in Just for fun, Uncategorized | View Comments

“I’ll discount it for the fault, but then you can’t return it for other faults”

July 7th, 2011 by Martin Lewis

“I’ll discount it for the fault, but then you can’t return it for other faults.”


It’s a common refrain in shops, especially during the sales. Yet, it’s simply not correct – however, unless you ensure that the RIGHT THING is written on the receipt, you may find it very difficult to exercise your legal rights.

I first wrote about this a few weeks ago when I tried to buy a jacket with a known faulty button and was told: "agree to the discount but then if anything else goes wrong with the jacket, you won’t be able to bring it back" (see the Shop staff quoted nonsense rights at me blog).

Yet it seems there’s still a lot of confusion about this, just take this discussion following my blog explaining the "This does not affect your statutory rights" rules.

"What about if the product is bought with a discount because it was already faulty, but then something different happens to the item which makes it even more faulty? In some stores they say after there has been a discount for the first fault the item is never refundable… is this true?"

"Yes, it’s a case of a "sold as seen" policy. By selling the item at a reduced rate and informing you of the 1st fault it voids the 12mth warranty as the product is already faulty. Effectively the discount gives you the money back to have it repaired and the shop still makes a sale."

"Really? So if you buy a discounted shirt because it’s missing a button but then you get home and you discover a tear (nothing to do with the button) it’s tough? That doesn’t sound qute right…?"

So let me try and clear this up with a few more details. But first, the basics …

  • You have legal rights if goods are faulty

    All goods must obey the Sale of Goods Act 1979, which, for memory ease, I call the SAD FART rules. All goods must be of …

    Satisfactory quality, As Described, Fit for purpose, And last a Reasonable length of Time.

    If not, they’re legally faulty and if you return them quickly enough you’ve a legal right to a FULL refund (for a full explanation of all the minutiae on this see the full Consumer Rights guide).

  • If you accept a discount for a specific fault, then it’s just that fault you can’t return it for

    Let me go back to my faulty jacket example. If I’d got a discount because the jacket had a faulty button, then that would have affected the ‘as described’ element. In other words this was a new jacket, with a faulty button.

    So, I couldn’t return the jacket due to the button fault. However, had anything else gone wrong with it, then it wouldn’t be satisfactory and I would’ve retained my rights.

    When you buy goods and are aware of a specific fault, you can’t then reject the goods for that fault but you still have your sale of goods rights with regards to any other faults."

Yet it seems while this is pretty clear cut, some stores don’t follow this as a matter of policy, here’s another quote from the discussion:

"Our store has this same policy whereby if the item is faulty and the customer accepts a discount for that fault then they can never bring it back even if something else goes wrong. I didn’t know this was wrong until now and have been working in the store for 3 years!"

This stance actually has a rather worrying evidential consequence and means you have to be careful.

  • Ensure you get the right thing written on the receipt

    Don’t just allow the store to write "faulty goods" on the receipt (both on your copy and theirs) as then, if it has a dodgy button but you take it back for a poor collar, you have no evidence of what the original fault was. So, ensure that you get the right thing written on the original receipt.

Posted in Uncategorized | View Comments

My column at the News of the World

July 6th, 2011 by Martin Lewis

IMPORTANT update, 3pm 7 July 2011

Since writing last night, I’ve watched further news and slept (or not slept) on this, plus taken on board the overwhelming volume and tone of your responses. I’ve spoken with the paper’s editor this morning and asked that instead of running my column (filed last week) I have some space to write something of my feelings on what’s happened and the fact that it mustn’t be allowed to happen again – to which he’s agreed.

I’ve also decided to take some time to think this through calmly and listen to the facts as they develop – while I do so I won’t be writing for the paper.

Update Note 4:50pm 7 July

I’ve just read a statement from News International that the News of the World will print its last edition on Sunday see http://www.politicshome.com/uk/article/31458/ – staggering. Obviously that may well change the fact that I was going to write a piece about the nasty events and impact on journalism. Yet I’ve not be able to get through to anyone there yet.

Original Blog:

My column at News of the World

Like everyone else I was sickened when I read of the accusations of the voicemail issue with Milly Dowler, the most recent punch in the whole nasty episode of hacking that went on at the News of the World. It is of course a long way from my own journalism, was long before I joined the paper in 2008 and I know only what I’ve seen on the news.  Yet I do have a page in the paper, and a number of people have asked me what I’ll do, so here are my rough thoughts.

Let me be straight from the start, if these things were happening right now – as opposed to back in 2002 – and the paper was arguing it’s done nothing wrong I would’ve stopped my column already.  As it is, my column for this week was filed last week before this broke. Today I called and spoke to Colin Myler, the paper’s current Editor, made my point strongly and was assured (again) the paper now is a different beast to a few years ago.

I’m torn and have been wrestling with myself over this for a couple of days due to the association. While I strongly believe it’s important this type of irresponsible, morally bankrupt behaviour that gives my industry a bad name is both punished and stamped out, that needs to be balanced against my campaigning passion for educating people about their money, and helping as many people as possible.

If I pulled from the paper now, it wouldn’t stop the hideous past, nor would it stymie the investigations and punishments due to those involved. It would just mean News of the World readers got less information about money.

I need to plainly say the News of the World has been brilliant for that, not just because of its enormous reach but as it opens doors to politicians, putting its resources into supporting fights even when they go against advertisers’ interests.  It’s given me an incredible vehicle to reach many people on important issues like PPI campaigning, financial education in schools, consumer rights, payday loans, campaigning for fairer energy bills, tax credits and more – and most importantly it reaches people that this website and my other work doesn’t over those crucial issues.

I’ve had many offers of columns in other papers, so jumping ship wouldn’t be difficult – but the News of the World is the only paper that has a money page up the front. It’s been a long slog to push the profile of money journalism in a paper many wouldn’t think was its traditional home – and they let me write my stories with little interference (ie, just changing my appalling spelling, grammar and space issues).

From listening to Alastair Campbell on Newsnight last night, it seems this wasn’t solely a News of the World issue – though it appears it was the worst of the bunch –  it’s a tabloid journalism (or possibly even just journalism) issue. I doubt it will be long until the focus broadens.  

It’s one of the reasons I hope there will be a full independent enquiry on top of the police investigation into all the papers who did this, to give us better definition over what rights to privacy we do or don’t have. Therefore if I switched to another tabloid (which is the only place to get the wide reach) then in the long run I’m still in the same boat – frankly the only way to guarantee to avoid this and the individuals involved would be to give up writing for any paper.

While some advertisers can say they’ll “suspend their ads” but will for all likelihood be back within weeks or months once the heat is off, that doesn’t work for me. This is a one off decision. The moral temptation is to make a stand, but I’m not convinced that doing so outweighs the long-term good I can do by continuing to write my column in a paper that is a different iteration of the one that did this, with few of the same personnel (many work elsewhere), and get that hard-to-reach readership.

I’m very angry about what happened on this, like everyone else – I don’t know what other columnists have said, but while it would’ve been much easier to stay silent, I felt I should say something.  

The type of work I do necessitates compromises. I work on TV, radio, have a range of newspaper columns not just the News of the World. By definition I do programmes and write in places when the adverts contain sales pitches for payday lenders, secured loans, or PPI reclaimers that I dislike.  Yet if I didn’t it wouldn’t stop those advertisers, it’d just mean the counter message wouldn’t get across.


Posted in Uncategorized | View Comments

49:59! Hoorah!

July 5th, 2011 by Martin Lewis

10k in 49:59 outside - hoorah!

Just a little blog. Finally managed to crack 50 minutes for 10k outside. It’s been a long slog but I managed it last night, squeaking under the boundary by a second.

I’ve run a lot faster on a treadmill and had blogged that in the past, but having transferred to outside I now realise how much more difficult it is. Being on form for a new record couldn’t have come at a better time as next Sunday I’m doing the British 10k run for Cancer Research UK (though I’m not doing much sponsorship as it’s not long enough to ask for money for that).

I had hoped that’d be my first sub-50 but am very pleased to have done it before and hope the adrenalin of the day helps me beat this again.

Now I’m sure regular readers would be disappointed if I didn’t have a graph of this (see I love spreadsheets blog) so here goes my progress chart (in fact every 10k I’ve ever done – new records in bold).  As you can see it’s been a struggle to break the barrier.

26/3  time 57:45 – 1st ever 10k outdoors
06/5 time 54:00
16/5 time 56:24
21/5 time 51:31
24/5 time 51:24
29/5 time 52:47
10/6 time 50:59
13/6 time 50:18
19/6 time 50:31
27/6 time 52:22
02/7 time 51:05
04/7 time 49:59

Related blogs:


Posted in Uncategorized | View Comments

‘This does not affect your statutory rights’ – what it really means

July 4th, 2011 by Martin Lewis

This does not affect your statutory rights – what it really means


Seven little words, one GIANT confusion. The sign’s everywhere yet many customers and staff don’t have a clue what it means.

If we all understood the law a little better it’d mean less friction in-store (it’s fine to be firm and polite and assert your rights, but rude is out of order). A couple of weeks ago just such a moment occurred with me, when someone tried to incorrectly pass off my rights (see Shop staff quoted nonsense rights at me blog).

Thankfully as, of course, it’s part of my job, I didn’t fall for it, but every consumer should try and have at least the basic rights in their mental arsenal. The key is to understand there are two main factors at play:

  • Shops’ own returns policy. Buy something in a store and UNLESS it’s faulty, you have NO LEGAL RIGHT to return it – changing your mind doesn’t cut it (you’ve more rights online where you’ve a legal seven-day-no-quibble right of return).

    Yet, to protect reps, many stores DO allow it under their returns policies, but then their rules are gospel. However, if the returns policy is published it’s a legal part of your purchase &˜contract so they’re bound by it.

  • Your statutory rights. When goods are faulty many staff wrongly think their returns policies still rule, but here THE LAW takes over.

    All goods must obey the Sale of Goods Act 1979, which, for memory ease, I call the SAD FART rules. All goods must be of …

    Satisfactory quality, As Described, Fit for purpose, And last a Reasonable length of Time.

    If not, they’re legally faulty- return them quickly enough and you’ve a legal right to a FULL refund (for a full explanation of all the minutiae of this see the full Consumer Right) guide

So here are some of the most common things you’re told and whether they’re right or wrong in each circumstance.

Store-bought goods – true or false?
Shop staff say our policy is… If goods aren’t faulty Faulty goods
Returns only with receipt True False. Legally you only need proof of purchase, so credit card/bank statements just as good
Can’t be returned used True False. If you only found out the fault by using it.
Wrong size is your problem. True True.  It isn’t a fault (unless they guaranteed it’d fit you or size is mislabelled)
No returns on sales goods True False. You’ve the same rights in sales as any other time – discounts are irrelevant
No returns on second hand True False. You’ve the same rights, though what counts as ‘satisfactory quality’ is reduced
We only give credit notes True False.  If returned quickly enough, you’re entitled to a full refund.
Contact the manufacturer for repair N/A False.  Your contract is with the store – it must sort it
No return on underwear True False. Knickers to anyone who says different.
Must come in original box True False.
Must still have tags on True False.
No returns if credit-note bought True False. You retain your rights.

The key is to ensure you know them. To start, print the Free Consumer Rights Wallet Guide so if you’re stuck in-store you’re only a piece of paper away from the correct answer.


Posted in Uncategorized | View Comments

Should Pippa Middleton work for free?

July 4th, 2011 by Martin Lewis

Should Pippa work for free?

Should Pippa work for free?

Her sister married a Prince. Does that mean she must work without pay? Listening to Radio 5 this morning you’d certainly think so …

While discussing what to name English Sparkling Wines the wine commentator suggested:

“Call it Pippa, then she can promote and represent it and of course she wouldn’t charge.”

Why the “of course?” Yes she’s from an affluent middle-class family, but does the fact her sister married into Royalty mean she becomes an indentured servant of the Crown too, working for free for every pro-UK cause?

It is an interesting position to be in. She’s not a Royal. She’s not part of the Civil list, so gets no capital from the state – yet because of the high profile wedding day, she’s now almost seen as public property.

Of course you could argue, “she’s now a mega celebrity and will make a fortune, so she should do things like this for free.” Then again if she does go on to commercialise the Middleton brand in that way, she’s likely to be pilloried for being mercenary and taking advantage (think of Fergie).

Now this is just my stream of thoughts on the back of a relatively off-the-cuff remark on the radio – but I do think it raises an interesting question – does Kate’s union automatically tie her sister into a quasi-Royal life too with the same duties?

Your thoughts welcome.


Posted in Uncategorized | View Comments
« Older Entries