Britain’s top money-saving expert MARTIN LEWIS shares tips on how to survive the crunch

5

View
comments

It sounds for a minute like Martin Lewis is throwing in the towel when he says his famous money-saving tips might not be much use for millions facing soaring bills.

He’s not, of course, but he does say things have become so bad – ‘the worst since I became the money-saving expert in 2000’ – that only the intervention of Boris Johnson, Rishi Sunak and regulators can help those on the coalface of the cost-of-living crisis.

In an interview with The Mail on Sunday, Mr Lewis outlines a series of things they must start working on this week, from Treasury money to cut energy bills to banning profiteering from petrol stations.

If they don’t, forget the civil unrest he warned of last week. ‘There will be some families who will have to choose between freezing or starving, and may face both. It’s hitting the middle classes too,’ he says.

Martin Lewis made his name telling savvy Brits to get zero per cent credit cards and put the cash they save into savings accounts, use cashback sites, collect vouchers and choose a cheaper brand of groceries – all things families did more and more after the 2008 credit crunch.

But with household bills and costs for food and petrol rising at levels not seen for 40 years – and wages, pensions and benefits not keeping pace – it’s no longer just about empowering families with ways to save.

And that is where the other side of his ‘cutting your costs, fighting your corner’ mantra comes in – his campaigning work that pushes Ministers into action, as he did on bank charges and PPI.

Mr Lewis was recently quoted as saying ‘I’m virtually out of tools’ when talking about families on lower incomes trying to cope with energy bills.

‘I was making a point that for some people money-saving, which is what I spent my career doing, will not solve this problem,’ he says. ‘And, therefore, it is political levers that need to be pulled to solve the problem.’

His point is that the very poorest are already doing what they can. He gives short shrift to ‘patronising’ politicians who suggest they do his famous ‘downshift challenge’. As he says: ‘For those on the lowest incomes, I would be very surprised if they’re buying Tesco Finest.’

But, before Mr Lewis tells us what politicians need to do, he adds: ‘Now, for many people, there are things you can do to help yourself.’ In fact, if you think you are bad with money, you are exactly the sort of person Martin Lewis says he can help the most.

The key is to focus on all the small stuff – the ‘look after your pennies and the pounds will look after themselves’ motto.

He said: ‘The big picture is just too scary. So if you look at the small picture, go to every single thing that you spend money on and, first, ask yourself, “Can I do it cheaper and the same way?”

‘And, then, even if you can, ask yourself, “Do I need everything I’ve got? What do I need? What can I reduce?” The more income you have, the more stuff you do, the more you can save.’

He added: ‘The real difficulty is that people are always saying, “You can’t help me, I’m terrible with money.”

‘Actually, that’s not the case. The people I can’t help are the people who have already done everything and are on the lowest incomes and they have no wriggle room, and those are the ones I’m worried for most at the moment.’

For anyone hoping to have a normal Christmas – after the past two were ruined by the pandemic – he has bad news: ‘I don’t think there is much hope of this ending before Christmas.

‘We are not in the middle of a cost-of-living crisis, we are at the start of a cost-of-living crisis.

‘It is almost certainly going to get worse. The problems are going to peak over the winter months, from October onwards, when we’re expecting to see energy bills rise again by another 30 per cent.

‘Energy is the biggest single issue.’ The scale is illustrated with what OAPs on just the state pension face: ‘When you stop to look at a prediction of £2,600-a-year energy bills due in October, that is over a quarter of the state pension. That’s just energy bills – that’s not rent, that’s not anything else, that’s energy bills.’

And Ofgem, the regulator that should be helping families, is not, he says. Last week, he called the watchdog a ‘f****** disgrace that sells consumers down the river’. He apologised to Ofgem staff, but said he stood by his ire at the organisation over changes to the price cap that penalises firms trying to offer cheap fixed deals.

He said: ‘If prices drop, a company who wants to offer a cheaper deal has to pay your old supplier to take you and has to pay much of the difference in wholesale prices to the old supplier.

‘Now, clearly, that is a monumental disincentive from companies offering cheaper deals.’

It’s not the only Ofgem blunder. For the latest price cap, they upped the level of the standing charge – the fixed amount households pay – on energy bills.

Mr Lewis says: ‘Those who have the lowest bills are, effectively, proportionally paying more for their energy usage. And you’re paying £250 a year even if you turned all your energy off and that’s quite startling. It’s also not very good for the green agenda.’

What can Mr Johnson and Mr Sunak do to help? Get money into people’s pockets, he says. There are a few ways to do this, and he doesn’t mind which are used, but the big challenge is how many people you help. He says: ‘From a political angle, there are two categories of people who need help.

‘The first are those on the very lowest incomes. The problem, politically, is if you help those on the very lowest incomes, many of whom won’t be working or will have only limited work income, then across middle Britain, people with £30,000, £40,000, £50,000 combined family income, some of them will understandably be saying, “Hold on, I go out to work, I work really hard, I do everything you ask of me and you’re helping those people but my life is being substantially curtailed by what’s going on.”

‘And that is the great political difficulty here. It is the question of how far up the net do you stretch the help.

‘The first thing we have to do is for politicians to make a decision that people need more money. After that, how we distribute it is important.’

But he doesn’t like the so-called £200 ‘loan, not loan’ due to come off bills in October. He calls it that because future bill-payers have to pay it back – with £40 added to all bills over the next five years – including younger people not benefiting from it now.

Mr Lewis says: ‘My hope is the Chancellor will convert it to just a reduction of the bill and there won’t be a payback element.’

He thinks there also needs to be more targeted help. The £150 council tax rebate for those in band A to D properties ‘was not a bad system’ that could be repeated.

Another is expanding the criteria for the warm home discount. At the moment, it’s a £140 deduction from winter energy bills, that mainly benefits OAPs without bumper private pension schemes and some low-income families.

But who is going to pay for this?

‘I get there will be some people reading this saying, “Where’s your magic money tree?”

‘I think the priority of the nation is fulfilling basic needs. We are rich enough as a country to do that – we did it for the pandemic. There is room to help people get through this and, ultimately, if you look on the cost of society, if we don’t help people get through this and it has an impact on their physical and mental health, then we have huge knock-on costs to the NHS and the welfare budget.’

What else can be done? Mr Lewis points to a practice, highlighted in last week’s Mail on Sunday, where almost all big broadband providers, including BT, are putting up bills, in contract, by inflation plus 3.9 per cent.

‘That’s maybe getting close to profiteering, in my view,’ he says.

In fact, profiteering is another thing he would like regulators, and the Government where there are no watchdogs, to crack down on. This week, the RAC told how petrol retailers are taking an average profit of 2p a litre more than before the 5p cut to fuel duty.

‘I am concerned that there are some companies who are seeing it as an opportunity to increase prices, even when their costs are not going up, and to increase margins.

‘I think we need to tighten down on those. If we’re all in it together, right, then we need to make sure there isn’t a profiteering advantage being taken by some firms to sneak in moves that increase profitability.’

From cutting dishwasher tablets in half to getting a ‘season ticket’ for your prescriptions… our pick of Martin Lewis’s top tips

MARTIN LEWIS’S Money Saving Expert (MSE) website is packed with great advice, and his team has even pulled together a 90-point cost-of-living survival guide. Here’s our pick of them.

1 16 Million people are out of contract on their broadband and mobile – and could easily halve their bills. Many are on older contracts still paying the bog-standard full price. Yet two minutes on MSE’s comparison tools can often find deals saving more than £200 a year. Or do you qualify for a broadband ‘social tariff’? If you’re on a lower income – for example, claiming Universal Credit – MSE has a list of social tariffs, from £15 a month.

2 More than 800,000 qualify for state pension top-up. Pension credit is a tax-free, means-tested benefit aimed at retired people on low incomes – and it can be worth thousands of pounds a year. Plus it’s a gateway benefit that may make you eligible for council tax discounts, free TV licences for over-75s and more.

3 While banks turned the tap off during the pandemic, the switching cash has begun to flow again. MSE has a list of providers that pay £100 or more to switch to them, including HSBC (£175) and Nationwide (£100).

4 Whether you have a tot or a big teen, childcare costs can be huge. Yet hundreds of thousands of working parents are missing out on thousands of pounds of help. MSE has a childcare costs guide that covers the available schemes.

5 Direct debits, standing orders and recurring payments all let money drip from your accounts without needing your approval. Your bank should be able to provide you with a list of the first two. Recurring payments are little known, and hidden. This is where you give firms permission to take a ‘payment’ each month from your debit or credit card.

Finding recurring payments takes a little digging through statements. Once you’ve got the payments, decide if you still want the goods or service. If not and you’re out of contract, cancel.

6 If you live alone, with students, have a ‘severe mental impairment’, have a live-in carer, receive pension credit or are on a low income, you could get a council tax discount. They range from 25 per cent to 100 per cent, depending on circumstances.

7 Do an annual stocktake – if you haven’t used something for a year, sell it. Smartphones go for hundreds of pounds. MSE has tips for selling on eBay and Facebook plus tips on selling clothes. There are even ways to make money from crisp bags, empty jam jars and wine corks.

8 Last year, more than a million people in England would have been better off using an NHS prescription prepayment certificate, a kind of season ticket. It’s a one-off fee that covers all prescriptions for a period of three months or one year. If you use more than one a month, it’s worth it.

9 Watch the weather. Using your washing machine on a 30-degree cycle and drying clothes outside rather than in a tumble-dryer saves about £28 a year on your energy bill, according to the Energy Saving Trust.

10 Check if you’re in too high a council tax band. Due to the bizarre way properties were valued when the council tax system was launched in 1991, more than 400,000 homes are in the wrong band. Use Martin’s council tax check ’n’ challenge on the MSE site.

11 Cut dishwasher tabs in half, plus 41 more household hacks. From cutting open toothpaste to get the last bit out, to saving wrapping paper from opened gifts, we might not always admit to using the hacks, but however small (or strange), they all add up to save cash.

12 Can’t afford to clear credit and store cards in full each month? You can’t afford not to check if you can get a 0 per cent balance transfer. This is not us advising you to borrow your way through the crisis. But if you’ve got existing credit and store card debt and are paying interest, it’s always worth seeing if you can save with a balance transfer card. These allow you to shift debts from old cards to a new one with 0 per cent interest, so every repayment cuts your actual debt.

13 If you’re able to treat yourself to cinema tickets or eating out, there’s a way to get a year of two-for-one deals for £1. The ‘meerkat trick’ gets you a discount at thousands of restaurants from Sunday to Thursday and at cinemas on Tuesday or Wednesday.

14 Get paid to recycle old clothes or beauty containers. Many high street stores offer incentives for recycling their old clothes and beauty containers – from £5 for old clothes, to ‘free’ MAC lipsticks and more. See the website’s recycling rewards list.

15 Know the best times to get the biggest ‘yellow sticker’ reductions. Yellow stickers are a stock-in-trade for bargain-hunters. These are the items near their best-before dates that supermarkets reduce in price. But the key is to be ready to pounce at the perfect time. MSE has gathered insider info from supermarket staff and shoppers on when stores want to offload stock.