The main focus of this particular show was on student finance and in particular the Student Loan, which has, at present, a 6% interest rate on it. However Martin’s central thrust was to look at repaying it as a tax rather than as a loan. For example, it doesn’t count as a debt against a mortgage, but the repayments are taken into account in what you can afford for monthly mortgage repayments. He explained that your monthly repayments were dictated by the income you got after leaving Uni., not the size of what you had borrowed. You were expected to repay 9% of income over £21,000/year (going up to £25,000 in April), below this and you paid nothing that year. After 30 years the loan was void and you didn’t pay anything more no matter how much you had or had not paid up to that point. The 6% interest accrued as time went on but this would only matter to the lucky few would earned so much in the 30 years – the high flyers – that they re-paid all of their student loan. Most students, even those on only moderate incomes, would probably not repay it all or even repay only a small part of it. He was asked if parents or students should consider paying some of the loan or its interest early using savings, but he explained that this would only help if you thought you would be one of those earning over £40,000 regularly over the 30 years – only the fortunate 17% of students after Uni! For the rest he felt under the present climate and rules it made more sense to use savings, or generous parents, towards deposits for mortgages. Finally on this topic he pointed out that you should not begin repaying anything until after the April after you leave Uni., so if HMRC or your employer took it, you were entitled to a refund. He also observed that while most students could, and would, pay through PAYE, those self employed or independent could set up a monthly Direct Debit to avoid a large bill at the end of the financial tax year.
On other matters in the programme he highlighted that supermarkets could charge different prices for the same product on different isles, especially if it was being sold in different sizes, so carry on keep your eyes peeled! The ad teaser was about increases to your broadband and line rental during a contract. Many contracts for phones allow it! (I thought they couldn’t). However if the company raises your rental costs during the contract period you could then leave after a month, no matter how long the contract was for. Many, he said, were ringing the companies up if they were told that rental bills were to rise and negotiating new, possibly even lower tariffs!
Next week Martin and his co-host Angelica would focus in on top tips on kids savings.