Urgent deadline worth £10,000s if aged 40-73, FREE wills, shift debt to 0% till 2028, NO-RISK energy fix, £120 window vac £58

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04 March 2025 | View in browser

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THE TOP TIPS IN THIS EMAIL Martin: URGENT deadline worth £10,000s if you're aged 40 to 73... - How NI impacts your State Pension - Miss deadline & lose chance to fill 13yrs - 5 steps: Pay up to £800, gain £5,400+? New. Shift card debt to 0% till 2028 Overpay your mortgage & save £1,000s? FREE WILLS for over-55s Wed ONLY. FREE Burger King Whopper Beat energy price rises with NO-RISK fix Martin to MPs: 'Fix Lifetime ISA holes' £120 Kärcher window vac £58 Ends Fri. 50GB Sim '£2.59/mth' New Pod: Energy price rise: what to do, why we pay more than Europe & more 5 Vue tickets £22 & more cinema deals 8pm tonight (Tue): The Martin Lewis Money Show Live M&S up to 50% off sale Yay! 2m have the MSE App - try it today Martin's MMHPI charity given rare power £120 Clarins, Eve Lom etc beauty £25 £58 Grüum home fragrance set £18 This week's best buys: 150Mb broadband '£21/mth', 5.8% loans Money Moral Dilemma: Should we offer to pay towards my in-laws' flights? FREE tickets: Ideal Home Show, Build It Live & more BEST BUYS & TOOLS MSE Cheap Mobile Finder Credit Club including free credit report 0% balance transfers Compare broadband deals MSE Compare+ Car Insurance Best bank accounts Top savings accounts Credit cards for bad credit Credit Card Eligibility Calculator Loans Eligibility Calculator Mortgage comparison Compare travel money Cheap Energy Club Best Sim-only deals

Martin: The URGENT deadline worth £10,000s everyone needs to check (unless over age 73) For each £180 to £800 you pay (free for some) many will gain £5,400 or more! Last chance to buy extra National Insurance (NI) years While 'boosting your State Pension' doesn't sound sexy, it's the most lucrative thing many can do with their money. Yet for likely millions across the UK, the door closes this 5 April, and it's not a quick process. To whet your appetite, here's one of the huge numbers of successes I've had both via my TV show and our State Pension boosting guide. Neil emailed: "I've managed to buy an additional 5 NI years for a total £814 (turns out I'm eligible to pay class 2 NI contributions). This has increased my State Pension forecast from £192 to £221.20 a week, so £1,622 a year. If I live to my average life expectancy of 87, it'll total out at £34,070. Cannot thank you enough for the tips." Let me explain this & answer your questions tonight... The Martin Lewis Money Show Live ITV 8pm (Tue) This urgent State Pension boost is my main topic & it could literally pay you to watch. You can ask Qs via martinlewis@itv.com or #MartinLewis on X. PS: Watch it back after via 'ITVX Martin Lewis'. The Basics: How NI impacts your State Pension Think of National Insurance (NI) as a bit like a token you can earn each tax year. The more tokens you get, the bigger the proportion of the £221.20 a week State Pension you receive once you hit that age.  Over a typical tax year, you earn NI credits from working, looking after children, or while on certain benefits. Once you've got enough credit in the tax year, you've then qualified for that tax year's National Insurance (ie, you've got the year's token). - You need at least 10 qualifying NI years to get some State Pension. - After that, the more years, the bigger your State Pension payout.  - To get the FULL State Pension, you need 35ish qualifying NI years, and I can't stress enough the 'ish' - it varies widely for complex reasons. Yet many are missing past NI years, commonly due to years abroad, low incomes, career breaks, or not claiming credits. THE BIG DEADLINE...  You can currently buy missing years back to 2006, but from 6 April you can only do it to 2019 This is all about what's called the 'new' State Pension, introduced in 2016. It only applies to (if you're older this isn't for you)... - Men born after 5 April 1951 (so max age 73) - Women born after 5 April 1953 (so max age 71) At this 'new' State Pension's launch, transitional arrangements were put in place allowing you to buy back any missing NI years for longer than normal - all the way back to 2006. These arrangements end this tax year. So the last day you can buy them is 5 April. After that the buyback rule reverts to the usual six tax years, so that'll then mean just back to 2019.  So miss the deadline & you lose the chance on 13yrs' worth. I've a bit of deja-vu writing this. Originally, the transitional arrangements were due to end in April 2023, then they were extended to July, then again to April 2025. And frankly we're to blame. The Govt told me that once MSE & I started explaining the importance of this, numbers jumped from 300 to 12,000 a day, and all the systems clogged up, so the deadline had to be extended. I can't see another extension happening  - though some contingency plans are in place (see below) - so I think this is it. So check NOW. Leave it to nearer the deadline and if the systems get clogged, it could be very cumbersome to make it work. My FIVE STEPS to work out... ... should you buy NI years, and if so, how? This is complex so let's go slowly. Don't skip steps - it could cost you. STEP 1) Two important checks EVERYONE should make. This only takes a couple of minutes (the links give you easy help). Are you missing any National Insurance years? Speedily check your past NI record. Either you have a 'full year', in which case you get the credit towards your State Pension, or you have 'year is not full'. Even missing a week of credits can mean you get nothing for that year. If the year isn't full, click 'view details' to see how short you are. It'll tell you how much would be needed to make up what's missing. Important: You CAN'T BUY BACK YEARS BEFORE 2006 (though if you wrongly missed claiming earlier years, a few may still be able to get them free - see step 2). Are you on track to get the full State Pension? Now check your State Pension forecast. Someone on track for a full State Pension would currently see a £221.20 a week forecast. You can't go higher, so if it says this, you're good (providing you don't plan to move abroad or stop work early). STEP 2) Check whether you can get old NI years for free - it could save you £1,000s and gain you £10,000s. While NI years are usually auto-added, in some cases they need claiming. If you didn't, likely as you weren't aware, you can usually back-claim. We've a full list of free NI years to claim, but I'd guess the biggest are... You didn't claim Child Benefit, or the wrong partner did. Claiming Child Benefit triggers eligibility for National Insurance credits if you're not working (ie, you're looking after your child). Yet many who don't work (or don't work enough - you currently need to earn over £6,396/yr) missed out for a couple of main reasons... a) The working partner claimed it, not the non-working. If your working partner claimed the Child Benefit, they were getting NI years anyway - the non-working partner should've claimed. Up to 200,000 people are in this situation, in which case ask to retrospectively transfer it to you. As Jacquie emailed me: "We felt salty that, due to my earnings, we received no Child Benefit when the children were little and my husband was at home looking after them. It'd be over £6,000 to top up my husband's NI for those missing employment years. We followed your suggestion on applying to transfer the NI from me to him and asked our neighbour to write a letter that we had been living together with our children for all those years! "A very welcome letter arrived today confirming those years now count towards his NI and he now has a full State Pension entitlement. So very grateful - a donation has been made to your Money and Mental Health Policy Institute as a small thank you." (I was very moved by this. Thank you Jacquie.) b) You didn't think there was any point. Many don't claim, as their partner earnt over the Child Benefit threshold, so you'd just have had to pay it all back due to the 'High Income Child Benefit Charge'. Yet as claiming Child Benefit is a trigger to getting NI credits, that means you missed out (best thing to do in these circumstances is claim but at the 'zero rate'). Unfortunately, at the moment you can only retrospectively claim back three months, so this is more of a warning to make sure you're claiming if still eligible. Grandparents (or other family members) providing childcare. If a family member looks after an under-12, or has done any time since 2011, before they were State Pension age (even if they are now) as the parents / guardians were working, then under the specified adult childcare credit system, the parent can apply to transfer the NI credit they're eligible for, for childcare, to the family member. It can sometimes be backdate-able to 2011.  As Marilyn emailed: "Thanks to your advice, I claimed for grandparent NI credits for the past six years. I gave up work in 2017 after kidney tumour surgery and devoted my time to looking after my baby granddaughters, helping my daughter, who is a nurse, return to work. When I heard on your show about the grandparent credits, I applied so I could make up the missing years and get a full State Pension later this year. It was quick and easy. My application was approved within three weeks." You didn't claim the Carer's Credit you were entitled to. Those aged 16 to State Pension age who provide unpaid care - such as washing, cooking, shopping or dressing - for at least 20hrs a week for someone receiving at least one qualifying benefit (including Personal Independence Payment and Disability Living Allowance) are eligible for free NI credits. This applies even if caring for your partner or child. If that rings a bell, and you didn't claim and are missing NI years, see how to back-claim Carer's Credit. STEP 3) Missing years from 2006 to 2018? Decide soon whether it's 'likely' worth buying years. What matters most here is whether you're on track to get the full forecast, the cost of the years, and your age right now... Partial years can be super cheap... National Insurance years are binary: you either have a full year or no year. So if you've not worked for a full year and/or didn't earn over that year's threshold, you won't get that year's NI. Yet you may be only just short of a full year. In which case, the cost of buying it is small - you may only need to pay for a week or two's credits (say £16) to get the whole year. In that case, the risk of doing it is massively diminished. It can even be worth chancing it... The older you are, the easier it is to know whether gaps in your NI years will have an impact on your pension... At / near State Pension age (60+)? It's easier to see whether topping up may help. If your State Pension is, or is forecast to be, under £221.20 a week, and you can't plug gaps for free, topping up by buying extra years could be a no-brainer (more below). If so, and you're already taking your pension, do it ASAP, as the sooner you do it, the sooner your pension will be enhanced. Aged 45 to 60ish? Less definite, as you may still naturally fill the gaps. The younger you are, the more time you have to earn enough qualifying years before you reach State Pension age. So consider... - The nearer 60 you are, the less time there is to fill the gaps naturally. - Have you got years missing after 2019? (If so, and they'd be enough to plug gaps, you could delay the decision, as you are always allowed to buy back up to six years ago.) - The more years missing, the more likely buying years would help. - If you can buy partial years cheaply, it's a better bet (eg, if it only costs £16 to buy, it's likely worth doing as a 'just in case'). Under 45? It's not usually worth it, barring for cheap partial years. Generally, if you're planning to stay in the UK and work for much of the rest of your life, you've time to fill the gaps, so it's not worth it, unless you've missed a very large chunk of working years and therefore are a long way from the full forecast. The exception is if you can buy a cheap partial year, so it only costs, say, up to £50. In which case, if you've got the cash, you may see it as an insurance against you not earning years in future. At that price it can be worth it, even if it later turns out futile as you'd collect enough years to get the full pension anyway. You need at least 10 NI years to get any State Pension That's the minimum needed. So if you're short and can't buy enough to hit 10 years, it's not worth it as you still won't get anything. Yet if you're only a year short of 10 years, buying one year effectively means you're entitled to 10 years' worth, so it would add £3,286/yr. STEP 4) To buy a full old year costs £800ish (£180 if you're self-employed) and may gain you an inflation-proof £5,400+. Many people will only need to pay for a partial year. But if you need to buy a whole year, the cost varies slightly for employees (technically, class 3 National Insurance), usually between £795 and £824 depending on the missing year - see employees' year-by-year top-up cost. If you were self-employed, you can buy class 2 contributions far cheaper, for around £180 - see self-employed year costs. Each missing NI year you get adds an inflation-proof £329 to what you receive in State Pension every year.  So, even if you had to pay for the whole year, you'd get back what you put in after about two and a half years of receiving the State Pension, and every year you get it after that is profit. We've built a simple State Pension NI contribution top-up calculator to help with the maths. A 66-year-old man living for the typical life expectancy would get a total £5,400 back, a 66-year-old woman £6,400 as life expectancy is longer. There are scenarios that can lower the return though, including... - If you die sooner, thus don't collect your pension for as long. - If the extra pension income (which is taxable) takes you up a tax threshold, so you pay a higher rate of tax on the amount earned above that threshold (see Income Tax rates). It's still worth doing though. - If you were only a couple of hundred quid a year below the max State Pension, you obviously wouldn't get the full gain from buying a year (you'll find this out in step 5). Pensions are, currently, inflation-proof too. The State Pension has long had a 'triple lock', meaning it must go up by the HIGHEST of...   2.5% OR Consumer Prices Index inflation OR average earnings. That means the amounts we're talking about are in reality much stronger as they'll rise with inflation. Even if the triple lock was ended (& most likely if it was, it'd still be inflation-proof), it's still a good bet. This isn't 100% risk-free - State Pension policy could change This is about a gain that will take decades to accrue, so many things could change over that time. Yet let me highlight perhaps the most obvious risks (there may be unknowns too). The State Pension age is increased again. It's possible, and maybe even probable, the age at which you're eligible to get the State Pension will be increased again. If so, you'll have fewer years on the State Pension, which could reduce the expected return. Though for most it'll still be a very big winner. An outside risk the State Pension could be means-tested. We've heard the odd muttering about this in thought pieces, then beefed up by press reports taking one political stance or another. Yet it is not the policy of any mainstream UK political party at the moment, and still seems pretty unlikely, and would very likely be under legal challenge over these top-ups if it did. Certainly the nearer you are to State Pension age, the less of a risk there is (and you only need to get the pension a short time to break even). However, who knows where we'll be in the high tech world of AI, flying skateboards, and robotic sheep of 2040. If you're likely to make a huge gain doing this on current calculations (which most will), the risk is small, while the potential rewards are large, so I'd go for it (especially if you find it easy to finance). If the gain's marginal, and you're many years from retirement, this may be more off-putting.  STEP 5) Think buying NI years is right for you? Before you pay out... some important safety checks. Even if you've passed all the checks, you need actual calculations, or you may pay for years that won't help or are unnecessary. Since the first postponed deadline (due to overdemand), a web service has been introduced which some can access. That takes some pressure off the system, but if you're unsure it's still best to do it by phone.  Who CAN'T do this online... You won't be able to if: - You're at State Pension age or within 4mths 8 days of it. - You're filling gaps from self-employment or living/working abroad. - You hold a 'Married Women's Reduced Rate Election' certificate. - You're eligible for 'Home Responsibilities Protection'. For the rest, you can do it online: here's how. The Check your State Pension forecast tool shows your State Pension forecast, NI record, payable gaps, and whether you can pay for gaps online. It'll then either decide you've a complex case and you must do it by phone, or let you select the year(s) to pay for, in full, online via bank transfer or via Open Banking. You can't pay in instalments. How to do it via phone and get 1-on-1 help. Which number you call depends on your age... - Under State Pension age? Call the Future Pension Centre. - At or above State Pension age? Call the Pension Service.  Remember you can't buy back years from before 2006. If that's what you're trying to do, don't bother calling: it can't be done. New. Important form to fill in if the phone lines are clogged With the deadline approaching (and this email & my TV show due to drive huge demand, I suspect) yesterday the Department for Work & Pensions (DWP) launched a backstop for those who find the Pension Service phone line too busy so can't speak to someone. If so, submit this DWP callback request form, then even if it gets back to you after 5 April, you'll still be able to get this done. Best Practice: I'd urge you to take a picture/screengrab of the form you filled in, and a screengrab of the request sent screen, then email them to yourself, so you've a contemporaneous timestamped note in case something goes wrong, so you can prove you did it in time. While many have told me it can be a pain in the bum to get to speak to someone on these lines, once they do, most - including Niki - say it's helpful: "After working through all your NI advice, my husband and I applied for the NI contributions for overseas workers. After several calls to Future Pensions, we gained insights into what years to pay back and why (extremely helpful people). Not only have we boosted our pensions to help us for the future and claimed those precious pre-2016 gaps, we also saved a whopping £15,000+ in class 2 NI contributions compared to paying class 3. Wow! Thanks for the push." If buying years is right for you - and you've done it by phone.  Then use the HM Revenue & Customs (HMRC) webchat to get an 18-digit reference code (you can call HMRC but it tends to take longer). This can be a frustration, but has to be done, as your money needs to be paid into the correct account. Be prepared for long wait times, though it now has a 'callback' system. Struggling to contact HMRC? As long as you've spoken to the DWP, you should be fine even if you don't go through until after 5 April (and if you call HMRC after 5 April, tell it you spoke to the DWP before the deadline. There will be a record of your call). Yet for belt 'n' braces, use the DWP callback form to say you want a callback to pay before 5 April to firmly lock in that you did it in time. What they won't tell you online or on the phone. The advice doesn't cover every situation. The issues are mostly ones I've already mentioned, but to be sure - they WON'T usually tell you... ... whether you're entitled to free years ... whether the extra pension will push you into a higher tax bracket ... that if you're on a very low income, and would have otherwise got Pension Credit, this may reduce that.

 

 

DON'T believe the fake 'Martin Lewis' or 'MSE' ads Lots of scam ads litter social media and even newspaper websites - some of these lie that we or Martin promote Bitcoin, binary trading etc. See Fake ads warning.

 

 

 

Do you pay interest on credit card debt? Save £100s or £1,000s New. Shift card debt so it's INTEREST FREE till 2028 Two new longest balance transfers: (1) 'Up to' 33mths 0% (2) DEFINITE 32mths 0%. The best since Jan 2023 A 0% balance transfer is where you get a new card that pays off debts on existing cards, so you now owe it, but there's no interest for a set period. Anyone paying credit card interest should check NOW to see whether they can do this to cut costs. It means more of your repayments clear the actual debt, rather than servicing the interest - getting you debt-free quicker. And the good news is deals are improving. Sorting this can have a massive impact, as Mike emailed: "Hi Martin. A huge thank you. I started following your advice in Sept to build my credit score and chisel away £5,000 in credit card debt. I've halved that following your advice over need vs want, and have increased my credit score by highlighting errors and paying off debt faster. I now have a 0% balance transfer to clear the remaining £2,500; I'll be completely debt-free in four months and I'm now getting on the property ladder. Thank you!" Before we get to the best buys, four need-to-knows... Find which top card you're most likely to be accepted for via our eligibility calc. It shows your odds of getting each card BEFORE you apply, minimising applications & protecting your credit score. Go for the lowest fee with a 0% period long enough to clear the debt. Longer balance transfers usually have a bigger one-off fee, so if you can go shorter, it's cheaper. Unsure? Play safe & go long. If a card is an 'up to', check its 'backup' rate. With up-to cards, some accepted customers get a backup rate, which isn't as good as the headline rate. We show it below, so you can factor it in. Usually rejected when you apply? Our eligibility calc also includes balance transfers for poor credit scorers, while MSE's free Credit Club (available via the MSE App on Apple | Android) can analyse the problem. Top-pick newbies' 0% balance transfers (all links via our eligibility calc) New. Barclaycard Up to 33mths 0% (3.45% fee) 24.9% rep APR interest after 0% ends Longest 0%, but it's an 'up to' with a short backup rate - Headline rate: 33mths 0% (3.45% fee) - Backup rate: 16mths 0% (3.45% fee). It says up to 20% of those accepted get this. If you're pre-approved in our eligibility calc (it's a shorter deal if you go direct), you'll definitely get the full 33mths 0%, which makes it a winner if you need a long time. If not, the poor backup rate means one of the cards below may be safer. New. Tesco DEFINITE 32mths 0% (3.19% fee) 24.9% rep APR after 0% ends Longest DEFINITE-length 0% & lower fee All accepted get 32mths at 0%. So if our eligibility calc gives you decent odds of getting this, and you're not pre-approved for the Barclaycard above or want a lower fee, it's likely your winner. - Headline (and only) rate: 32mths 0% (3.19% fee) HSBC Up to 32mths 0% (3.49% fee) 24.9% rep APR after 0% ends Long 0% & strong backup rate, but an 'up to' - Headline rate: 32mths 0% (3.49% fee) - Backup rate: 26mths 0% (3.49% fee) Here the backup rate is decent, so if you've good odds of this, but not Tesco above, it's not a bad option. Tesco DEFINITE 18mths 0% (0.99% fee) 24.9% rep APR after 0% ends Can you repay quicker? Low-fee DEFINITE-length 0% This 18mth card is in a sweet spot, of decent length with a fee of just £10ish per £1,000 shifted. - Headline (and only) rate: 18mths 0% (0.99% fee) Barclaycard Up to 14mths 0% (NO FEE)  24.9% rep APR after 0% ends Don't need too long? Longest NO FEE 0% - Headline rate: 14mths 0% NO FEE - Backup rate: 7mths 0% NO FEE. It says up to 20% of those accepted get this. Used right, no-fee cards mean zero cost. If you're pre-approved in our eligibility calc, you'll definitely get 14mths. If not, you may be safer going for NatWest's NO-FEE card as while its headline 12mth 0% rate is shorter, its backup 10mth 0% rate is longer. ALWAYS follow the Balance Transfer Golden Rules: a) Never miss the minimum monthly repayment, or you could lose the 0% deal & it'll cost far more. b) Aim to clear the card (or balance-transfer again) before the 0% ends, or the rate rockets to the higher APR. c) Don't spend or withdraw cash. It usually isn't at the cheap rate & withdrawals may hit your ability to access credit. d) If you don't transfer at application, you've usually only 60 to 90 days to get the 0%. Do check your card's terms. Quick balance transfer FAQs (click links for Martin's answers) Q. Is it worth applying if my eligibility odds are low? | Q. What if my credit limit isn't big enough? | Q. Can I shift debt to existing cards too? | Q. Should I try to pay off my biggest debt first? SPOILER: NO. Full help and info, including options for poorer credit scorers, in Best balance transfers.

 

FREE WILLS for over-55s. It's Free Wills Month, which lets those aged 55+ get a free solicitor-drafted (or updated) will, in the hope they'll leave something to a partner charity (Age UK, Marie Curie, NSPCC etc). It happens twice a year, with different locations each time - this one includes London, Cardiff, Edinburgh, Bristol & Birmingham. See the link for full info (if your area isn't there, it should be in October). Not 55+? Help & options in our Cheap & free wills guide. Wed ONLY. FREE £6ish Burger King Whopper (also plant-based). See how to claim your free Whopper. Energy Price Cap to rise 6.4% in April, but what next? The NO-RISK fix... The Energy Price Cap, which two-thirds of homes in England, Scotland & Wales are on, moves every 3mths - and we know it'll rise 6.4% in April. As the current cheapest fixes are 7% below today's Price Cap, they're massively cheaper than April's price, so use our cheapest fixes comparison to find your cheapest and ditch the Price Cap. What happens for the July Cap and beyond? Analysts' current predictions are the Cap will remain materially higher for the next 12mths. Yet if there's peace in Ukraine, prices could plummet. Some have said they're not fixing due to this - if so, consider... The no-risk fix: You're always free to ditch a fix, though you sometimes need to pay early exit fees of £25 to £75 per fuel. Yet this cheap EDF NO EXIT FEE 'Simply Fixed Direct' tariff* is 4.8% below the current Cap (10.5% below April's), and if prices do fall, you can leave penalty-free whenever. Martin tells MPs: 'Serious holes in Lifetime ISAs need to be fixed.' He called for action on "unfair" and "off-putting" first-time buyer fines, plus indexing of the max property price. Watch what Martin told a Treasury Committee on LISAs. £120 Kärcher window vac £58 with code. MSE Blagged. It's the WV 6 Plus N model, with 4,000 available. Kärcher Ends Fri. Cheapest 50GB monthly data Sim '£2.59/mth'. With unlimited mins & texts, this 50GB iD Mobile Sim (uses Three's network) is £8/mth, but you can claim (don't forget) a £65 Amazon/Currys voucher. If you'd have spent there anyway, factor it in and the cost's equivalent to £2.59/mth over the 12mth contract. Want more/less data? See Cheap Mobile Finder. New Pod: Beat energy price rise + a prof on why we pay more than Europe + do green subsidies help/hinder? We get a lot of questions on energy pricing outside of our consumer focus, so Martin brought in a specialist to help on his podcast this week. All this, plus childcare costs, Council Tax debt collection and more, in the new Martin Lewis Podcast. Listen via BBC Sounds | Apple | Spotify or wherever you get your Martin fix.  Cinema Deals: 5 Vue tickets £22, Cineworld £5 IMAX movies (1 day only) & more. The Oscars are over, but the films are still out there - see a range of blockbusters for less with our 29 cinema savers. How to boost your State Pension - The Martin Lewis Money Show Live, ITV1, 8pm tonight (Tue). Martin: "I've mentioned it above, but this is a must-watch for anyone aged 40 to 73. If you don't, you may miss out on £10,000s in retirement. So do watch or at least set the Betamax."

 

 

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Savings rates are dropping while mortgage rates stay high Millions should OVERPAY their mortgage with spare cash/savings and save £1,000s. The six need-to-knows... Top savings rates are still sliding after last month's UK base rate cut, yet the cost of new fixed-rate mortgages remains stubbornly high (as lenders had already priced in the expected cut). For many mortgage holders, including the 1.8 million with a fix ending this year, your mortgage rate is likely already higher than that of top savings, or will soon be. This means unless you have more expensive debt elsewhere (if so, see Should I overpay cards & loans?), there's a crucial question to ask yourself: "Should I save or overpay my mortgage?" We've six key need-to-knows to help... 1. If your mortgage rate is higher than the interest you can earn in savings, overpaying adds up. Here's a simplified example: £10,000 saved at 4% earns £400 interest (£320 if basic-rate tax is taken off), yet use it to overpay a 5% mortgage and it saves you £500 interest. So using the savings to overpay is a winner - it's a bit like saving, tax-free, at the mortgage rate. The best thing to do is use our Mortgage Overpayment Calculator, which shows both your absolute gain from overpaying and the relative gain compared to putting money in savings. On a £200,000 repayment mortgage at 6% with a 25yr term, the Overpay Calculator shows... Overpayment amount Interest saved Mortgage cleared A one-off £5,000 £16,000 1yr 4mths earlier £200 every month £54,000 6yrs 4mths earlier Both one-off £5,000 & £200/mth £64,000 7yrs 2mths earlier As Marc emailed: "Over the last four years I have overpaid the maximum 10% allowance whilst savings rates were low. This has saved me £19,000 in interest and 15yrs off the mortgage so far. The overpayment calc has been a great help, thanks." 2. To do this right, compare YOUR best possible mortgage against YOUR best possible savings... We're MoneySavingExpert, we don't do bog standard. If your mortgage could be better, that's the starting point. Use our Mortgage Best Buys comparison and free Remortgage guide for step-by-step help. The same's true with savings. If your accounts pay a paltry rate, as too many do, it's easy to ditch and switch (unless they're locked away in a fix). You can earn up to 5% in top easy-access savings and up to 4.63% in top fixed savings right now, so that's what you should be comparing with. 3. If it does add up... TWO KEY CHECKS before you do it. It's not solely about the financial mathematics... Are there overpayment penalties? Many lenders let you annually overpay 10% of your mortgage balance penalty-free. Above that, there are often penalties, which could wipe out much of the gain, so do check. Always keep a cash emergency fund. Martin's rule is simple: "The fact you've overpaid your mortgage doesn't automatically mean if circumstances change and you suddenly can't repay, the lender will say 'oh, no probs' - you'd still be in arrears. So my rule of thumb is always have enough money to cover 3 to 6 months' bills accessible in savings, and only overpay with any money above that (unless it's a specific offset mortgage)." 4. Even in some cases where the maths does not add up, it may still pay to overpay. If you can save at a higher rate than your mortgage, use our Mortgage Overpay vs Savings Calc to see the pound-for-pound difference. If savings are substantially better, save. Yet if they're only marginally better, there are two things to consider... If you borrow over 60% loan-to-value (LTV, the proportion of your home's current value you're borrowing)... reducing your mortgage debt may lower the rate of future mortgage deals. See the LTV thresholds that improve mortgage rates. This is a long-term game. Savings rates typically drop faster and further than mortgage rates, so less mortgage debt could be erring on the safe side. 5. Ensure your overpayments reduce your TOTAL MORTGAGE BALANCE (ie, reducing the term). Overpay and some lenders just reduce your next or future monthly repayments. That may help your cash flow later, but you won't make the big savings. The real reduction from making an overpayment is by letting it reduce your mortgage balance and keeping the same monthly repayment simultaneously. This has the practical effect of helping you clear your mortgage sooner, resulting in an interest (and time-saving) gain. So when you overpay, tell the lender you want it to reduce the capital owed and/or the mortgage term and keep your monthly repayment the same. To be clear, we're NOT saying you should ask to reduce your term, that'll often need an affordability test. The priority is that what you repay reduces your mortgage balance and you keep up the same contractual repayments, so in practice, you'll be mortgage-free quicker (see Martin's old Decrease term or overpay? blog). If your lender makes this difficult by recalculating your monthly repayments, then just ensure you keep paying what you were or more (so effectively overpaying each time) and it'll have the same impact. 6. Still on a very cheap mortgage rate? Save the right way. If your mortgage rate is still low, then you'll likely be better off in top savings. Yet if you're doing that, ensure the money is in easy-access savings when the deal/fix ends, so it can then be used to reduce the borrowing if needed. You could use fixed savings that mature just before you need the cash. PS: We've focused on overpaying vs saving. There is also overpaying vs investing, yet that's impossible to give any definites on, as it's comparing a certain outcome with an uncertain one (and investing is outside of our expertise).

 

M&S up to 50% off clothes & home sale. Online & in store on White Stuff, Sweaty Betty & Joules, plus some own-brand items. Read our full M&S sale analysis. Yay! Now 2 million have downloaded the MSE App - try it today. It's the MSE site in app-form, plus MoneySaving alerts, easy Credit Club access & more. Download free for Apple or Android. Martin's money and mental health charity given super-complainant powers. It's only the 7th organisation to gain these powers since they were introduced in 2002. See what this means in MMHPI super-complaints. £120 of beauty for £25: Clarins, Eve Lom, Emma Hardie & more. Seven-item Next beauty box. £58 Grüum home fragrance set £18 delivered. MSE Blagged. Includes two candles, a diffuser, a room spray & two wax melts. 8,000 available. Grüum

 

 

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AT A GLANCE BEST BUYS 0% balance transfers Longest 0%: Barclaycard (check eligibility) up to 33mths 0%, 3.45% fee, 24.9% rep APR No-fee 0%: Barclaycard (check eligibility) up to 14mths 0% Best bank accounts Free £175 + TOP service: First Direct 1st Account Free £175 + 5% interest: Nationwide FlexDirect Broadband top picks Fast fibre (100Mb+): Vodafone '£21/mth' Superfast fibre (500Mb+): Vodafone '£26.67/mth' On Universal Credit or similar? Check all discounted social tariffs Cheap insurance Car: Use our Compare+ Car Insurance tool Home: Try our new Compare+ Home Insurance tool Cheap loans £5,000 to £7,499: People's Choice (check eligibility), 7% rep APR (6.5% rep APR on £7,000 to £7,499) £7,500 to £25,000: People's Choice (check eligibility), 5.8% rep APR Top savings accounts Top easy-access cash ISA: Chip 5% (incl 6mth bonus), min £1 Top easy-access savings: Monument 4.75%, min £25,000 Top one-year fix: Close Brothers 4.58%, min £10,000 Top energy deals Use our whole-of-market Cheap Energy Club Cheap Sims 31GB+ data: iD Mobile, '£2.59/mth' for 50GB

 

 

MSE NEWS - Top story. Martin: The 6.4% April Energy Price Cap rise is really 2% to 9% - what'll you pay? - Millions' worth of British Airways Covid travel vouchers must be used by Sept - check whether you've got one

 

 

MONEY MORAL DILEMMA Should we offer to pay towards my in-laws' flights from Australia? Each summer, my retired in-laws come over from Australia to spend a couple of months with our two sons while they're on school holidays. As we put them up the whole time, we don't have to pay for any childcare or summer camps. In previous years, we've also paid for their flights, but we really can't afford to this year. Should we tell them that and hope they'll pay for themselves, or offer to pay at least something towards their flights given what we'll save on childcare if they do come? Enter the Money Moral Maze: Should we pay towards my in-laws' flights? | Suggest a Money Moral Dilemma (MMD) | View past MMDs

 

FREE tickets for upcoming shows - Ideal Home Show (normally £15ish), with Martin 20,000 available for Olympia London, 21 March to 6 April - Homebuilding & Renovating Show (normally £12) 15,000 available for Birmingham, 20 to 23 March, plus other locations - Sailawaze Live cruise travel show (normally £20) 5,000 available for Twickenham, 22 & 23 March - Build It Live (normally £12) 2,000 available for Bicester, 7 & 8 June, or Exeter, 13 & 14 September - National Outdoor Expo & National Cycling Show (normally £18) 1,000 available for Birmingham NEC, 22 & 23 March - The Baby Show (normally £18) 500 available for Excel London, 7 to 9 March

 

 

MSE TEAM BLOG - MSE Forum highlights: Saucepans, spreadsheets & suitable laptops

 

 

MARTIN'S APPEARANCES (TUE 4 MAR ONWARDS) Tue 4 Mar - The Martin Lewis Money Show Live, ITV1, 8pm Thu 6 Mar - Ask Martin Lewis, BBC Radio 5 Live, noon Tue 11 Mar - This Morning, phone-in, ITV1, 10.20am

 

 

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