- 4 hours ago
- #realityrealmus
#RealityRealmUS
Reality Realm US
🎞 Please subscribe to our official channel to watch the full movie for free, as soon as possible. ❤️Reality Insight Hub❤️
👉 Official Channel: https://www.dailymotion.com/TheVisionFrame
👉 THANK YOU ❤️❤️❤️❤️❤️
Category
🎥
Short filmTranscript
00:00welcome money we all need it many struggle to get it right especially when young so
00:20whether you're a teen with your first Saturday job a student panic staring at
00:24your loan statement or parents and grandparents trying to help them out
00:28this is a special for you after all the financial choices you make early can shape
00:35you for a lifetime and as it's a special I'm breaking the format today you set the
00:40agenda young people there we go those at a school in Coventry who are going to be
00:45joining us too and they're waving the voice already I love it they get to ask
00:51the questions I've stripped it all back less set pieces than usual a little bit
00:55nerve-racking I don't know where it's going to be going today though I do know
00:59I will be doing student finance in detail as that is the most misunderstood area
01:05in the entire money world then towards the end of the show safer territory for
01:09me back to the news you can use the energy price cap that dictates the bills
01:13two-thirds of the country pay will rise two percent tomorrow but many can beat
01:17it and cut costs by 300 pounds a year I've ways to beat the Disney Plus price
01:22hike that's just happens if you pay the higher income child benefit charge
01:26finally you may be able to avoid doing self-assessment and the longest zero
01:31percent card for shifting debt that I've seen on the market since 2022 is out now
01:37on to a woman who swore she'd never download tik-tok and then spent three
01:43hours learning one dance move I thought you were a sprinter not a marathon runner
01:46Jeanette Kawachi everybody
01:50thank you very much
01:52and it's a dance I still can't do if you want to know and it's very nice to be back
01:56please do send us your questions on x or on blue sky you can use the hashtag
01:59martin lewis or you can email the team martin lewis at itv.com if we don't use your
02:04question tonight we may use it in a future show now you've already spotted our
02:09wonderful students there at West Coventry Academy year 12 and year 13 and we've got a
02:13studio audience as well you've got one is to give them a wave tell you what the
02:20Fitbit steps they'll be getting or that the tracker steps away the ones in those
02:24fantastic yeah brilliant stuff right so let's open it up what's on your mind
02:28what do you want to know we can go straight to our school there there's our
02:31interactive producer grace grace who have you got alongside you this evening hi
02:37dinner I have her mod he's got a question for martin hello mate um higher
02:41Martin I just wanted to know whether or not you think the government are likely to reintroduce
02:45their house buying ISA well so it's interesting you ask that question because there is a house
02:51buying ISA I think you may be thinking about the help to buy ISA that was available for from the age
02:56of 16 we now have the lifetime ISA which is available from the age of 18 how old are you
03:02I'm 17 17 so you can't do this yet but this is something I genuinely want you to do on your 18th
03:10birthday now with the lifetime ISA if you saving it towards your first home the state will add a 25%
03:17bonus you can put up put up to four thousand pounds a year in it so you put four grand in
03:21it the state will add a thousand pounds on top that has to be used towards a home that costs under
03:26450,000 pounds you're in Coventry probably shouldn't be too much of an issue there but if in the
03:31southeast of England it can be a problem and if you're going to buy there and it's going to be above
03:34450,000 you take a penalty to pay your money out something I'm campaigning to change but that's the
03:39situation so you need to be aware but this is the big reason I say on your 18th birthday and for
03:43everybody in here too to use the lifetime ISA to get the bonus on your first property it has to have
03:51been open one year so even if you're not ready to save when you're 18 put a pound in moneybox is
03:58the best pair at 4.6% interest put a pound in and then tick tock tick tock tick tock tick tock the clock
04:03is ticking and then when you're ready to put money in it'll be over a year and you can get the bonus
04:08straight away so everybody 18th birthday pound in a lifetime ISA even if you're not ready to use it even
04:14if you won't use it later hey it's a savings account it's tax-free savings account it's not a big
04:18problem and then when you're ready to use it it will work for you does that all make sense uh yeah
04:24definitely had you heard of the Lysa or were you thinking of the help to buy um I was thinking of
04:30the health helper side more so help to buy yeah it's nice to know about this now thank you so the
04:33lifetime ISA girl I haven't done it dotted all the I's crossed all the T do some more reading on it but
04:37that's the way to go forward on it brilliant staff thank you very much for your question now this is
04:41coming from Kelly now the world is changing and those not necessarily your subject but she is asking
04:46how are kids expected to financially plan ahead when all the jobs are being overtaken by AI
04:52it's a very interesting question
04:54so look I have great concerns about AI I think especially for people in the professions the world
05:01is going to be very different in 10 years time it should will benefit from it in some ways but
05:05they'll also and I don't think politicians have really tackled the problem that's coming from AI in
05:09that direction so what would I do if I'm advising young people first of all focus on human skills
05:15creativity empathy leadership communication because AI is going to struggle to take those
05:24away second become a digital native if all jobs are going to involve AI you need to understand AI you
05:31need to understand the digital process you need to make sure if your parents that your children's do
05:35because they're going to have to embrace it because the world is moving in that direction
05:39third and I go back to when I was at university I was lucky enough to be president general secretary
05:45of the LSE students union and I spoke when I was coming to the end worried about what I was going to
05:49do next to the boss there the vice chancellor and I said what do I do and he gave me advice I will pass on
05:54in this he said focus on acquiring skills not on acquiring jobs the more skills you have the more
06:02capability you have to do everything and I think adaptability and flexibility is crucial in the
06:08world of AI and the final tip I'd give that's more generic than AI but I think it's important
06:12in my first professional job I was put in a research department I was meant to be there for two weeks
06:18but I was still there after six weeks I asked them why and they said they brought me to a wall
06:23and on the wall it was in financial PR there were newspapers that I had to put up every day that
06:28everyone could look and they said that one's not straight and that one's got a rip in the corner
06:31and that's why you're still in research we know you're clever but the truth is and this is the
06:36message whatever job you do do it to the best of your ability nobody's going to give you the big job
06:42if you can't do the small job right so I think I know it's not my subject but hopefully that's
06:46somewhat of an answer what was your first job what was your what was your first job it was in
06:54financial public relations I soon learned I was on the wrong side and became a journalist since then
06:58and we've got Maryam in the studio you've got a question for Martin um I'm a year 12 girl with
07:04a part-time job and I saved 250 pounds per month what is what's the single move future me will thank
07:15me for to save invest or build credit save investor build credit that's a choice I think that's a false
07:21choice if you forgive me save or invest is a direct choice you can either put your money in one funnel or
07:26you can put your money in another funnel building credit the ability that you're going to need to
07:30borrow if you want to buy a house and get a mortgage later uh that's a different route so let's deal
07:35with that because that's the easier one first to build credit when you do apply for credit what they
07:41do is they credit score you on your past history to try and predict how you'll behave in future if you
07:47don't have a past history even though you're not a bad risk they've got nothing to go on so they're
07:51unlikely to lend to you so what you have to do is build a history as a good credit citizen so what you
07:56don't do is you get a credit card probably have a hideous rate but that's not going to matter
08:00because you're going to pay the card off well done in full at the end of every month so that
08:06there's no interest and that's very important if you do that and you do whatever you'd be spending
08:12normally 50 100 pounds a month put that on the credit card pay it off in full after a year you've
08:17got a history of being a good credit citizen it'll start to build your credit rating so we'll we'll
08:22throw that one aside now you're asking me save or invest saving is where you put money away
08:27somewhere safe the money you've put in the capital what you put in is guaranteed and it'll grow at a
08:32set rate three or four percent of interest investing is where you take a risk of the money hoping it will
08:38grow much faster but at the potential that you could lose some of it over the long run if you're
08:43investing for more than say five years and you've got a wide spread of assets a global portfolio there
08:49are lots of funds out there that will do that automatically for you investing will generally
08:53outperform savings so you want to invest especially if you're doing it for 10 or 20 years so here's
08:58what i do you always want a pot of savings i call it an emergency fund you want to have some money put
09:02aside in case something happens to you so you won't need to borrow so you've got that money to deal with
09:06emergency so you save first you get that saving emergency fund up if you were working i'd say three
09:12to six months worth of bills and you put that aside after that then it's money for your long-term future
09:17then you start investing and you could even look at a pension too but i'm not going to go into pensions
09:21quite at this moment so credit score one side first savings then investing make sense yeah
09:26perfect all right
09:28now it's time for your view
09:33what is your question this evening it's a really simple one do you feel that school
09:41tooled you up with a basic level just a basic level not a high bar of financial education to cope
09:47with our competitive consumer economy you can vote now live on x and i'd also love to know how you
09:52feel about the financial education you had or you didn't have do use the hashtag martin lewis
09:57awesome well fantastic lots more of your questions to come and in the next part we're going to focus
10:03on many parents biggest concern the worry about getting into debt when you go to university we'll see
10:08you after this
10:17hello welcome back this is our young person's money special jeanette what's going on out there loads
10:29coming in on socials the polls doing very well as well but we're going to head back to west
10:34coventry academy grace is there grace who you got hey i have paisley here he's got a question for
10:40martin hi paisley hi martin uh how does student finance work and is university debt something i
10:46should be worried about big question and probably a really important question my funny answer is
10:52no you should not be worried about university debt but you should be worried about the cost of going
10:58to university and that may sound like a strange distinction but we're going to come back to you
11:04later and you'll see if you understand it at the end of this part i'm actually going to move you
11:07onto that screen over there because this is my big briefing
11:10okay so let's do this the first thing to understand is the university price tag that can be 60 000
11:18isn't what you pay the basics no first time uk undergraduate so that's doing your first degree
11:25needs to pay for tuition up front the tuition fees are paid for you by the student loan company
11:31automatically now english and wealth students your tuition fees are up to nine thousand five hundred
11:36and thirty five pounds a year wherever in the uk you study study in scotland northern ireland it's
11:41still the same scottish students in scotland you don't pay tuition fees you go anywhere else in the uk
11:48you'll pay the nine five three five northern irish students in northern ireland your tuition fees are
11:54maxed at four eight five five go anywhere else in the uk you'll pay the nine five three five now it's an up
12:00two figure but most universities charge up to that max so you can see three times nine thousand
12:05five hundred we're getting on for nearly thirty grand your maintenance loan the living loan this
12:08combined together with it over a three-year course the combined total can be sixty thousand pounds
12:15what counts though is how much you repay so let's talk about repayments now
12:21in england since 2023 on the new plan five loans you repay nine percent of everything earned above
12:29twenty five thousand pounds a year if you earn less than that you do not repay in the year so when
12:36twenty four thousand pounds you repay nothing you repay it via the payroll so for the young people in
12:41here when you go to work you normally tax is taken off before you receive it but the student loan is
12:48also taken off before you receive it so you don't have to pay a student loan it's paid for you you
12:51get your money after tax on the student loan and the student loan debt does not go on your credit file
12:57now that's in england you can see the different thresholds in the other uk nations which are on
13:01different plans you'll see they're all higher than england which means you pay less each year
13:06because because that figure is lower you start repaying you earn 26 grand you'd be repaying in england you
13:11wouldn't be repaying in any of the other uk nations the next most important thing to understand
13:16is whatever you whether you paid it off if you've not paid it off after 40 years in england
13:23it's gone you do not have to pay anymore and that's 40 years after the april after you leave university
13:28scotland it's 30 years for welsh students it's 30 years northern irish students it's 25 years now what
13:35we have to do now is twist our brains you've got the basic facts but we have to start to understand how
13:40this really impacts the practical pound in your pocket and there's only way one way to do that when we've
13:45got a group of people who are still at school here it's martin's pop quiz so here we go now i thought
13:57who's gonna play this and there's a bright young man here called raf who is my friend phil's son who
14:02i know very well and you still haven't beat me at connect four so i thought i'd invite you here tonight
14:07to play my pop quiz are you happy to play let's do it he's gonna get this right i'm absolutely sure
14:11here we go well done and just to check you're 17 aren't you and you're studying maths and economics
14:20at a level maths and physics maths and physics yeah no setting up you should be able to do this so here's
14:23the simple question your total student loan debt is 30 000 pounds your annual salary is 35 000 pounds how
14:32much would you repay a year do you remember what dictates repayments nine percent of everything
14:37you earn over 25 000 pounds so i believe that it would be at 900 pounds because 35 000 that deliberate
14:46easy numbers is 10 000 above 25 000 pounds ten nine percent of 10 000 pounds is 900 correct
14:52correct question number two here we go now your total student loan debt is 60 000 pounds
15:06the debt is doubled your annual salary is 35 000 pounds what is your yearly repayment
15:13i think it would still be 900 pounds martha oh he sweeps so look you repay nine percent of everything you
15:20earn above 25 000 pounds you're still earning 35 000 pounds your total repayment is
15:25nine thousand he's too clever he's got the point already but we'll go on oh no they've just increased
15:32tuition fees to a million pounds a year everybody ah that means question three your total student loan
15:38debt is three million pounds your annual salary is 35 000 pounds what's your yearly repayment 900 pounds 900
15:45well done well done well done well done look
15:53that's an incredibly important point it doesn't matter the amount you borrow that does not affect
16:00what you repay in your each year it's all on what you earn and that's the first thing to understand what
16:06you borrow though does dictate whether you will repay or not within the in england 40 years before it
16:15wipes that's what the level of borrowing now the more you borrow you borrow three million pounds you're
16:20never paying it off you're just paying for 40 years right the more you borrow and the more the interest
16:24the less likely you are to repay in full before it wipes so you're just going to keep paying the more you
16:30earn and the less you borrowed the more likely you are to clear what you borrowed within the 40 years
16:37now the actual current numbers are 56 of people who go to university are predicted to pay off the loan
16:46before the 40 years so just over half but many won't under the old system before 2023 it was only 32
16:53less than a third of people so more people are now clearing it let's go on just before you do that
16:58you know when we were talking about this earlier yeah i was texting my sister i was going to show
17:01her this and you stopped me because you said this might not necessarily apply to her it's really
17:05important because your sister went started uni about 10 years ago yeah yeah right so this is just just a
17:10quick note it's very useful that's the english system plan five loans there are many people if you
17:17started uni before 2022 your loan wipes after 30 years you start repaying at a higher threshold your interest
17:24rate is higher be quite careful listening to older siblings because their experience and their
17:30financial loan setup could be totally different to yours that's why people get the facts wrong on this
17:35all the time it's not with me though if my sister still listens to me no your sister been listening
17:39she would have got it absolutely right yeah and you've been listening to me so you're certain right
17:43let's move on this is this is the really important point so we've talked about raf got it right
17:49it's 900 pounds because it's what you're earning for most people this is going to work like a lifelong
17:54graduate tax what you repay each year depends solely on what you earn so it's like a nine percent
17:59additional tax let's look at it this is how tax works right also quite an important lesson it's so
18:05right for young people out there for most people you can earn up to twelve thousand five hundred and
18:09seventy pounds a year and you don't pay any tax on it very important once you earn above that you start
18:16to pay tax but tax is marginal so if you earn a hundred pounds above twelve five seventy you pay
18:25twenty percent tax but only on the hundred pounds you are above so you'd pay twenty quid in tax there
18:30are people out there who get in touch with me and saying i'm about to get a pay rise should i turn it down
18:34because it'll take me above the tax threshold and i'll have to pay so much more tax no you're only
18:38paying tax on the amount above the threshold i'm looking at the young people do you get that you
18:42understand what i'm saying really important that you get that locked in taxes and marginal rates so
18:46this is the tax rates uh standard tax rates but in practice this is what's going to happen to a graduate
18:54so no tax up to 12 570 up to 25 000 pounds you're the same as someone who hasn't gone to university
19:01above 25 000 pounds this is england remember they're paying 20 tax you're paying 29 tax above 50 grand
19:08they're paying 40 tax you're paying 49 tax effectively above 150 grand 45 to 54. nine
19:16percent extra tax is not cheap it's not cheap in any way that is a what more i hope that you'll go to
19:22university and it will enhance your earning power but you really need to think about whether it's
19:26worth it so paisley you're still over there that was the point i was making to you you asked me should
19:31i be worried about the debt it doesn't really work like a debt in practice it's not like a traditional
19:36loan it's actually is it going to be worth me paying an additional nine percent extra amount of
19:44tax for me to go to university the answer is if we talk purely financially and university is about so
19:49many other things as well the cultural life your exposure to many other things the answer is if
19:53you're going to earn very substantially more yes it will be if you're not going to earn much more and
19:57there won't be a graduate premium in the job that you want to take then it will probably cost you more
20:02than it should do and that's why with university effectively costing each student more than it
20:06used to do since they did the changes in 2023 in england it is really important to consider
20:11if it's worth it if it is great go for it enjoy it i hope you have a wonderful life if it isn't
20:16we're talking about more apprenticeships we're talking about more options for young people there
20:19are different things that you can do brilliant we've got this question that's coming from alex on
20:23twitter it says martin i'm still struggling whether to take out a student loan for our child
20:28due to the seven percent interest rate how much should this worry us unless you're in wales that's
20:33not correct i think this is one of those issues of the previous system is seven percent if you start
20:39before 2023 wales is still on plan two there's seven percent interest but the loans are smaller
20:43and that you only repay for 30 years i'm going to assume it's in england because i get a lot of
20:47questions like that with that mistaken thing let me tell you how the interest works lots of people
20:50worry about this the interest rate on student loans is 3.2 currently because it's based at the rate of
20:57inflation which means in economic terms there's no real cost to the interest i need to explain
21:02so you look young with strong legs can i borrow your chair for a second sorry i wasn't going to
21:06do this but let's do it okay you stand there for me okay this is not a chair this is a shopping trolley
21:12right i am borrowing enough money on my student loan to buy 100 shopping trolleys worth of goods
21:20that's how much it's costing me now while the interest is at 3.2 percent over the years
21:27prices are also going up by 3.2 percent so everything costs more and earnings we hope are
21:31going up by potentially even more so in 20 years time while i will pay more in money terms in terms
21:39of purchasing power i'm still only going to repay 100 shopping trolleys worth of goods so there's no
21:44actual impact on the cost to me of having borrowed the money because it set up the rate of inflation
21:49take the chair back thank you very much there we go you got the answers right he just he just took
21:55a chair and he got a clap anyway so that's the first point to understand about interest but now we
22:01get even more complex the interest that is added to your student loan account and this applies to old
22:07loans too is not the interest you repay let's make this really simple do you know if somebody earned
22:1224 000 pounds how much would they repay for zero zero because it's under 25 so how much interest would
22:19they repay so if they aren't below the threshold for their life they wouldn't pay any interest
22:23that's don't want anyone to do that i just want you to understand it someone who weren't just above the
22:28threshold may repay some of what they borrowed initially but they wouldn't have cleared all they
22:35borrowed initially so they wouldn't pay any interest you can add 3.2 percent interest if you like no
22:39they're not paying it then there's people who earn enough to pay back what they borrow but not to
22:44clear the loan in full within the 40 years by definition they won't have repaid all the interest added or
22:50they would have cleared it so they're not paying the full 3.2 percent rate the only people who are paying
22:55the full interest rate are those who clear the debt in full within the 40 years or in earlier years in
23:02different countries which tends to be either those with the who took a smaller loan or who are higher
23:07earners the interest rate interestingly in the in the current english loans the interest rate is lower
23:13and everybody went whoop whoop at the same time you repay for 10 years longer than you used to do and
23:19you repair to an earlier level and that effectively meant even though the interest rate is lower which is
23:23what everybody asked me about it's a bit of a red herring they increase the cost by 60 percent typically in
23:282023 even with a lower interest rate that's not what you need to worry about the interest rate
23:33brilliant um shush meter in the studio good evening you've got a question for martin is the water okay
23:39hi martin as a parent should i be trying to help my child pay their tuition fees as when they're
23:46required or should i rely on the loan it's a very big question i'm going to deal with it in two ways
23:53the first thing we need to understand is there's something more important
23:56than the tuition fees that you need to focus on let me move on to that and then i'm going to come
24:01on to the tuition fees let's go to my this graph please
24:06this is and all our students in coventry there if you're going to university this is a conversation
24:11you need to have with your parents it's absolutely crucial it is not discussed it's
24:15not talked about but it absolutely has to be avert
24:19this is the english system the full loan is just over ten thousand pounds now frankly that is not enough for
24:24many people to go to university it hasn't gone up with inflation it is a real problem it's not
24:29you're probably going to have to work as well to be able to survive at university that's not such a bad
24:32thing but that loan is means tested based on household income which for most under 25 is a proxy for parental
24:41income and you start to lose the loan at just 25 000 pounds that has not changed since 2008 we've had
24:5064 inflation in that time it has been eroded that's household income but 25 grand is basically full
24:56time minimum wage now and that's for one parent if you're a two-parent family very few homes apart
25:01from the poorest are going to get the full loan let's see the proper pattern here we go there you
25:06are starts to drop at 25 000 pounds by the time you get to 62 000 household income you're getting the
25:13minimum loan now of course as this is assessed based on parental income it's not official there's
25:19no way to mandate it but they're effectively saying you and this is what i call it a parental contribution
25:25you need to pay the difference this is the living away from home parental contribution it's about five
25:31and a half grand a year so over three years that's 16 and a half grand if they're living in london it's
25:36bigger if they're living at home it's slightly less so the first priority and if you've got young kids
25:41think about this if they're going to uni that's a lot of money you're going to have to put away and
25:44save for them first priority she's got to live while she's at university it's your daughter
25:49happens you she's got to live while she's at university that's what you need to sort out did
25:53you know about that yes because i've got an elder one who's just started and you suddenly realize the
25:59gap their loan isn't enough to pay the rent so you've got to pay that so that's our first element right
26:05parental contribution first now we'll move on to the tuition fee question the big one should i take
26:12a loan first thing to say there is no better form of finance than student loans not necessarily no
26:20cheaper this is a loan that if you earn under 25 000 pounds you don't repay this is a loan which
26:26doesn't go on your credit file this is a loan that's paid automatically for you so you can't
26:30effectively default on it unless you're self-employed arguably and then you'd be defaulting on tax too
26:34and this is a loan that wipes after 40 years and it's set at the rate of inflation it's unbeatable
26:39in her life i hope she will have bigger financial challenges than student finance the most important
26:47life stage for young people the most difficult one is building a deposit to get a house and to get a
26:52mortgage and mortgage rates are more higher than the student loan rate under this current student loan
26:56and they're a worse form of debt so if you pay off her tuition fees now that's money gone that you can't
27:02give it towards a mortgage deposit later and more so if you put that money in a four percent savings
27:07account when the interest is 3.2 percent you're arguably slightly up on the back of it so the
27:12first thing i'd say unless you're rich enough that you could buy her a house outright anyway as well
27:16and you could pay for everything i would argue this isn't your priority to pay off the tuition fees
27:22she also might want a car loan at some point that's going to be nine ten percent interest with much more
27:26difficult repayment terms so parents if you've got the money to help your children i'm not saying
27:32this is wrong to do i'm saying it wouldn't be my priority i'd be saving for a mortgage first or to
27:37make sure they don't get other types of debt first and only if you've got that gone then i'd look at
27:42this in the final thought you probably wanted to go on and be a high flyer you sorry to say this to you
27:47might go and be a beat poet traveling the world earning 10 000 pounds a year you've paid her tuition fees
27:51for us she'd never earn over 25 000 pounds it would have been a total waste of money there's that risk
27:56too so my answer is no i'd probably put the money in a bank leave it there so in a high interest
28:00savings account and save it for later does that make sense yeah thank you that's on the new system
28:04different rules on other systems i hope that works just on that martin it's hard today this is
28:09complicated stuff i've got more questions as well yeah i know that's in england what about the rest of
28:13the uk okay in scotland and wales you get a mix of a non-repairable grant and a loan and the amount
28:19of household income depends how much on each but there is still a gap for people on higher incomes
28:23compared to the full loan so a small parental contribution wales get ready for this english
28:28folks in wales all the household income does is dictate how much of your support is a grant
28:33and how much is a loan but everybody gets the full amount just those who've got more income it's more
28:38of a loan and those who've got less income it's more of a grant so wales has the system everybody would
28:43like wow well next more young people's questions and still to come the latest news on energy and how
28:49you could save 300 pounds on your bill we'll see you soon
29:06welcome back to our young person's finance special i feel i need a little bit of a lie down after the
29:10student finance was just a couple of technical points i said that the maintenance loan hasn't
29:14gone up with inflation it hasn't it's been massively be eroded by inflation over the last decade
29:19although last year this current year it has gone up with inflation but it hasn't come close to
29:23catching up where it'd gone before one other tiny thing i noticed this as i was doing it and i went
29:27to check afterwards going surely that i must have got it wrong our graphic is wrong it's over 125 000
29:33pounds that you pay 45 tax but it's not really relevant for the explanation janette what's coming in
29:37there's lots coming in we're going to take some questions on a particular topic i'm going to
29:42pick this one it's the most simple one because it's a popular question what's the best way to
29:45get car insurance for a 19 year old it's a simple question the answer isn't that easy okay so when
29:51you're getting car insurance you do the obvious things that everybody does first of all you make
29:57sure you're getting your quotes 26 days before renewal that's the perfect time because then you're deemed as
30:04a relatively low risk because the fact that you're doing it early 26 days is a sweet spot a few days
30:08either side not a problem then you combine comparison sites different comparison sites have different
30:13insurers and they have different brokers on them too so you need to do two or three different comparison
30:17sites then if you're a young person you look for a black box that's the thing that may measure in
30:22your car how you're driving that may be able to bring your prices down then we get to the slightly more
30:26wee ones right first thing to understand about car insurance it's about risk averages
30:32so you as a 19 year old are a high risk if you were to put a second driver who's more responsible
30:40let's say your parents your auntie your uncle somebody could legitimately drive your car
30:43in some circumstances they price you on the average risk which is lower than you by yourself
30:49just a note never put them if it's your car as first driver that's called fronting it's illegal it's
30:54fraud and you may invalidate your insurance but second driver if they could drive it is fine
30:58maybe your mom's better than your dad your bad dad better than your mom maybe both not it's trial and
31:01error to find out it can bring your risk average down next who here who said what's cheaper third
31:07party or comprehensive third party third party is lesser cover so you would think it would be cheaper
31:14but bizarrely some insurers factor that when people choose comprehensive they're actually a lower risk
31:20and the fact they're a lower risk can outweigh the fact that you're getting more cover so don't
31:24assume third party is cheaper try third party and comprehensive if you want the cheapest i know
31:29it's bizarre it just works that way sometimes and finding even what job you do can make a difference
31:34so always be honest but you are you a secretary or a pa for example you may find one is cheaper than
31:40the other it's worth trying a few different things there are lots more tricks but that's an idea of
31:43where i'd go about starting for a 19 year old okay i think we can head back to west coventry academy
31:49grace is there grace who do you have next to you hey i have ashley and she has a pension question
31:55wow okay hi martin i was just wondering um what is a pension and should i start thinking about them now
32:02wow yes i love it yes well done i love that question
32:08so a pension is a tax wrapper that enables you to save for your older age once you hit age 57 and beyond
32:16in a tax advantageous way so you get more money to go through it and it is well worth looking at the
32:21big reason why is it's an investment and when you put money in investments as they grow they compound so
32:28the longer you have them in the more time they have them to grow slightly made up figure but it gives
32:32you an idea for every pound you put in now you'd probably have to put 50 quid in when you're in your
32:3750s to get the same returns because of compounding so young is really important what how old are you
32:42uh i'm 17. so we have your age which is eight and a half and you'd want to put eight and a half percent
32:49of what you earn in for the rest of your life if i asked you when you were 30 it'd be 15 starting
32:53early is important so let's get on to the pension when you put money in a pension the first thing you
32:58need to understand is you put money in from tax-free income so normally when you work if you earn 100
33:05quid as a basic rate taxpayer on a full-time job you only get 80 quid in your pay packet because 20
33:11comes off in tax so you only take home 80 pounds make sense look at the young people that they get
33:15me but you could put the whole hundred pounds in your pension so you invest 100 pounds in your pension
33:21it only costs you 80 pounds more so if you work for someone if you have an employer
33:28then in certain circumstances they have to match your contributions so for every five percent of your
33:34salary that you you put in they have to put in three percent so let's do the math on that you put in
33:38100 quid it's only costing you 80 pounds but they have to put in 60 quid so you're getting 160 pounds
33:45worth of investment because your employer has to chip in like extra money from them it only costs
33:49you 80 pounds unbeatable absolute winner now here's a really interesting thing for young people to know if
33:54you go into work as opposed to going to university when you're 18. the rules say if you're age 22 and
33:59earn over 10 grand a year they have to automatically opt you into a pension and they have to match your
34:04contributions if you're younger they don't but if you are aged over 16 and you earn over about 6 300
34:14pounds a year you can ask to be put in those pension schemes and your employer must match your
34:20contributions they cannot legally say no so if you're going to go to work next year you work you're at
34:26home so you've got relatively limited costs you're earning 15 grand a year which is more than enough for
34:30everything you need go and ask your employer to opt you into the pension put some money away in the
34:36pension you're getting extra money from them and you're saving for your old age and let me tell you
34:40when you're in your 40s and 50s and you've got kids to play for and a mortgage and everything else
34:44you'll go i love younger me thank you does that make sense yeah well done for a brilliant question
34:53i love the fact you're thinking about pensions at your age is brilliant we need to start thinking
34:57about our lifetime finances at every point and start understanding it that's what this whole show is
35:01about do you know brilliant stuff thank you for your question ashley but next after the break the
35:05latest energy update and the longest naught percent card martin has seen for some time so don't go
35:11anywhere welcome back we're in the final stretch of our young person's money program i hope it's
35:30been useful for you jeanette what are people saying well people have been tweeting in have a look at this
35:34here this is so kind for neil to send this in to me the legend returns with such a topical subject
35:39for the program and i was on as well thank you that's very kind of you but let's head back to
35:45west coventry academy gracie who have you got alongside you there hi janelle we have millie with
35:51a question for martin hi millie hi martin what's the difference between a current account and a savings
35:57account and which one is the best for me brilliant for asking the question because we need to do basic
36:02finance okay a current account is your day-to-day bank account you get your card you can pay your
36:09bills from it it's a transactional account for doing what you need to do you don't normally get interest
36:13though these days there are currently five bank accounts paying you not yet you because you're not
36:17quite old enough uh once you're 18 paying you to switch to them 200 quid but it's your day-to-day
36:21bank account a savings account is where you store money that you don't need immediately
36:28and you get paid higher interest on it so you want both you have your current account for the
36:33money you're going to be spending that month or the next month that you can pay in and to pay your bills
36:37and then if you ever get too much building up in your current account hopefully that'd be lovely
36:42then you put it into a savings account where you go at the moment should be earning four four and a
36:46half percent interest do you know what interest is um it's not a trick question do you understand
36:50interest no not completely all right interest is the price of money right so if i borrow money from
36:59a bank i have to pay it to borrow and interest is the cost so if it cost me 10 interest and i borrow
37:05a thousand pounds over a year i'd have to give it 1100 pounds back because it's cost me to borrow so
37:12the higher interest rate if you're borrowing bad if you're saving effectively you're loaning your
37:18money to the bank and it's going to use your money so it has to pay you to keep hold of it
37:23so you want the highest interest rate possible five percent savings means you put a thousand
37:28pounds in savings and at the end of the year you have a thousand and fifty pounds in your thousand
37:32pounds plus the fifty pounds it's given you that's what interest is in a savings account you get
37:36interest in the current account you generally don't so any spare money goes in the savings account
37:40any usable money goes in the current account does that make sense yes wonderful thank you so much
37:47cheers thank you okay now howard has been in touch howard is asking on a fix but it ends today
37:56should i take out a new fix martin do you want the short answer or the long answer uh give us a
37:59long one why not all right short answer yes long answer news you can use
38:07okay let's do this briefly the energy price cap is going up two percent tomorrow are you on a price
38:12cap tariff if you're not sure the answer is probably because two-thirds of homes in uk are
38:18the price cap applies to all standard tariffs the bog standard tariff you're on if you've never switched
38:22or if you didn't switch after a fix ended so that's what haward will be on tomorrow if he doesn't do
38:28anything he'll be on a price cap tariff those are the names of the big price cap tariffs i'm not going
38:33to read through them have a look yourself the graphics let's keep it hold on that frame so people
38:37can see here are the new rates of the price cap as you'll note standing charge is going up quite a
38:42lot especially on gas the unit rate that's the amount you pay for each unit of gas and electricity
38:46you use going up for electricity going down for gas so if you're a low user where the standing charge is
38:52horrible standing charge is a big part of your bill your rise is going to be way more than two percent
38:56if you're a high user especially with gas your rise will be less than two percent
39:00it varies by region it varies by your payment method so that's the basics now drum roll please
39:11it's time for the famous price cap graph
39:15yeah it wasn't that exciting
39:19so this is my explainer of what's happening this is what has happened to the price cap as you'll see
39:24it's going up two percent tomorrow it was higher two quarters ago but far lower before
39:30people ask me why has it gone up well for that we need to look at the wholesale rates those are
39:35the rates that gas electricity companies retailers pay for energy this is a map of the wholesale rates
39:41now the weird thing is the price cap is going up tomorrow but not because wholesale rates are up now
39:46it's time lagged the price cap moves on wholesale rates from the middle of march the current price
39:51cap because it moves every three months from the middle of may to the middle of august that's this
39:54period now during that period they were roughly flat but that was when trump announced tariffs
40:00so uh and across the world and that put energy prices up across the world and that's probably
40:04about one percent of the reason it's going up the other one percent is paying for the warm home
40:08discount so we know what is going to happen this is quite interesting here you'll see would you say
40:14that's higher or lower than the average over that period what would you say lower just so let's bring
40:22back the whole the price cap and let's look at the predictions there you go it's predicted to be
40:27down half a percent now the important thing to understand is we are already nearly halfway through
40:33the assessment period for the january price cap so the predictions now are they're not solid but
40:39they're pretty close an easy way for me to frame it so you understand what's going to happen
40:43it's going to go up two percent and then it's roughly going to stay there until the end of march the
40:48end of the high use winter period where we spend most on energy it's going to go up and stay there
40:53after that this is much more crystal ball gazing because we're not in the assessment period it's
40:57predicted to go up more so you asked me should i fix let's have a look where today's cheapest fix is
41:07it is 15 nearly below the october price cap that's because rates have gone down a little bit and
41:15fixes move with the current price whereas the price cap is based on a timeline that's around just under
41:21300 pounds a year cheaper for somebody on typical bills so we know now you're almost certain to be
41:28saving until the end of march after that the probability is you'll still be saving substantially
41:33you might be saving less but you're going to be saving over the next year the cheapest fixes are an
41:37absolute no-brainer the price cap is a pants cap get off it your cheapest fix depends on where
41:45you live and how much you use go into a whole of market that's one that shows you all the tariffs
41:48by default price comparison site find your cheapest fix get off the price cap i know there are more
41:53sophisticated tires time of use tariff cv tariffs but basically if you're on the price gap no-brainer
41:58howard go and sort your fix out get your fix done because prices are going up they're staying there
42:03but you can save 15 with a guarantee that your price won't move over the next year if you were to
42:09get a fix now go get it sorted perfect right sabrina has been in touch yes well are there
42:15changes coming for the standing charge if so will it mean cheaper bills and if i fix for a year will
42:20i lose out on this change there are changes off gem has announced a final consultation that from january
42:26firms will have to offer a switchable tariff with lower standing charges that's the daily charge you pay
42:31just for having the facility of gas and electricity it's come from something i suggested though i'll be
42:36honest i'm not happy with the way that they put it in place you can go and read why on social media
42:41it's because they've not done it within the price cap mechanism that doesn't matter i'll let me answer
42:44your question that'll be in from january but these are only switchable tariffs so you would need to
42:50switch to get it so if you want enough fix now and wanted to leave your fix in january to go onto these
42:56tariffs you would have to pay an exit penalty to leave your fix so you ask me will it be cheaper bills
43:02be cheaper no what's going to happen is the standing charge the daily charge will get cheaper but the
43:08amount you pay for each you energy unit you use will go up that means if you're a low user say under
43:13a thousand pounds a year you will benefit if you're a high user you won't benefit so only lower users
43:20should go for it and if you do want to lower standing charges now there's the edf tracker tariff
43:26that's basically the price cap with 50 pounds a year lower standing charge is only good if you're
43:30paying under 80 pounds a month but no if you fix now you won't be able to get it but i think for
43:33most people you'd be better off fixing than waiting for that okay right some quickies i think how long
43:39have i got left someone tell me in my ear two minutes two minutes thank you that wasn't my ear
43:42but that'll do right time for three quickies first of all there are many people out there with child
43:48benefit who are on the higher income child benefit charge that's where you claw back through the tax system
43:53the amount you've got in child benefit it's still worth getting it until income of 80 000 pounds the big
43:58problem is administratively you've had to fill in a self-assessment tax form if you wouldn't
44:03otherwise be doing self-assessment they've now put a new system in what that means is call hmrc and you
44:09arrange to pay via your tax code that's the code that tells your employer how much tax to take from
44:16what you earn so you pay a little bit more tax from your employer won't save you any money but it will
44:21save you the administrative burden of doing self-assessment but it's only for those people who
44:26wouldn't be doing self-assessment otherwise so basically you've got to be on pay as you earn
44:30paying through your employer with relatively simple affairs now disney plus has hiked prices today
44:35another one of its subtle price hikes the ad free standard plan rose by a tenner today and the other
44:40plans have gone up too some tricks for you to try to cut the cost first of all if you're an existing
44:46customer try the cancellation trick can't guarantee it worked but basically what we're finding is lots of
44:51people who cancel get this this was one of my team got this there you are they suddenly get an offer
44:55saying you can get it for three quid a month or five pounds a month because you're cancelled and they
44:59want to retain you i can't guarantee it would happen but you might want to try it otherwise the club
45:04lloyd's bank account that's currently giving switches 200 pounds to switch to it includes an
45:08option to get a year's free disney plus including adverts that one to check the eligibility criteria
45:13it's only really for people who earn over 29 000 pounds a year if you're on o2 contract mobile phone
45:18you may be able to add disney plus as an extra to the contract and get two pounds a month off
45:22and let me see if i can get through all of these and there's a new longest zero percent balance
45:25transfer the longest since 2022 this is where you get a new card pays off debts on your old card for
45:30you so you owe the new card but at a cheaper interest rate barker card 35 months zero percent with a
45:353.45 fee this isn't for the young people by the way all accepted get full time they're at the whole
45:40length at zero percent but there are five other cards at 34 months zero percent which means there's more
45:45chance of being accepted go on to an eligibility calculator which shows you which of the top
45:49cards you're most likely to be accepted for uh but don't spend on these cards make sure you clear
45:54the debt before the zero percent or it will jump to 25 and i think that's it that's it
46:02frankly none of you got financial education but working on that thanks for all there thanks
46:06the school thanks for today bye-bye see you in november
46:15next on itv1 seeking justice for three wrongly imprisoned men it's our brand new documentary
46:21true crime presents murder a fight for justice
46:36mystery crime
46:44you
46:46you
46:49you
46:52you
46:56you
Recommended
46:41
|
Up next
46:40
28:30
28:30
27:36
27:36
28:30
28:30
44:14
44:14
44:14
41:12
33:52
39:53
46:30
46:38
38:01
46:41
46:37
46:37
46:37
46:37
46:14
Be the first to comment