Martin’s Blog…

I’ve been doing my usual reading of the Sunday papers’ money sections, and this week they’re full of the Government’s new plans to help first time buyers and key workers.

I’m in two minds about this. Why is there this assumption everyone has a right to own a house? Of course property ownership is desirable, yet it isn’t the panacea many people believe. I remember doing an ITV programme and talking to two 21 years old who were panicked they didn’t own a house, and were prepared to gamble their financial security to ‘solve it’. Yet there’s nothing wrong with renting. People have got used to ‘house price rises’ and thus see it as ‘throwing money away’, yet if house prices decline renting would be seen ‘as same bet against drop in capital values’.

Any product that is based on a marketplace, like housing, is automatically a risk product. It’s wrong to assume buying property is as safe as housing. There’s too much pressure and reliance on property prices in this country. If we were to have a house price crash, this is going to put us in trouble. I always hear ‘property
is better than a pension’, yet apart from the fact this is often based on a fundamental misunderstanding of pensions (they’re just a tax wrapper, not a product, and from next year you can have property in a pension), it’s also too much ‘all your eggs in one basket’.

Now before anyone panics, this isn’t a prediction of a house price drop. Nor am I saying buying is bad. The honest truth is I have no clue what will happen to house prices. Nor does anyone, that’s the point. No-one actually knows what will happen to house prices. Don’t believe anyone who promises you certainty. We can make risk-based estimation, but we don’t know. There’s a risk house prices may drop 30% and there’s a risk they may rise by 30%, we need to be aware of both risks.

This brings me on to the Government’s latest assisted housing plans. Here you’ll borrow 75% and the government/bank will provide the rest, which you’ll pay rent for. So first of all this means you won’t actually be paying that much less each month, yet you won’t own the whole house. While it does help those without deposits, actually being able to save for a deposit is a good test of financial security. Actually if you need to do this, doing some clever unsecured borrowing at 5% or less to provide the deposit is possibly a better route – or even better holding off, not panicking and waiting until your finances are sorted to buy is even better.

As for key workers, for me the problem isn’t so much that they can’t afford housing, but more that they’re simply not paid enough!

Alright, I’m not immune to a bit of Big Brother, and had it on in the background on launch day, but stunned to see Derek Laud on there. Now I don’t know the man particularly well, but when I used to work at Simply Money TV (2000-1) Derek was involved with the company as he was a friend of Ed Hall the MD.

By the poverty of celebs on the other reality shows, it amuses me that the non-celeb Big Brother actually has someone I’ve heard of on it! What I find interesting is the man has lots of money, political ambition and, though he’s a bit bizarre, a head on his shoulders. Why on earth is he doing this? Does he honestly believe it’s a decent route for a seat in the house? It’s definitely not for the money.

Martin

My nightmare question today on Jeremy Vine, “so we’ve had Otis Ferry in, now let’s
play his Dad’s song, and Martin that is…..?”

Aaarrghh, as I had to admit, I’ve never bought a record, tape or CD in my life. I know less about music than a tone deaf koala bear. Now don’t get me wrong here, it’s not that I hate music, and want to violently smash any stereo I see, I just don’t ever put it on to listen to. I prefer speech radio or the TV.

It’s rather bizarre really as my main hobby/sport/night out is actually off to a club to dance and I used to do it quite seriously. At one point I had a dance partner. Yet for me that was more about the exercise than the music itself.

I once before had to admit my lack of musical education. The researcher for a programme on Radio 5 asked me what music I liked and I admitted I couldn’t really say. At the time I was doing the ‘gob on a stick’ job on late night live - where there’s a 2 hour debate and you’re in the studio as one of two panellists to opine on any subject.

They stitched me up something rotten. Matthew Bannister decided to change the agenda. The intro of the show…. “something different tonight, we’ve found that one of our guests hates music, so we’re going to find out why.” A two hour phone-in proceeded. In the first hour I found myself having to defend my lack of listening, in the second the debate was “what one CD should we give Martin to start his musical education?”

Well I guess my invite to celeb Stars In Their Eyes is going to be a long way coming!

Having been on hols last week I missed the Tonight with Trevor programme about Rosie Millard. Yet I finally watched the tape tonight. It’s always difficult watching a programme that you’ve played a major part in, but had no control over.

As I watched it quickly occured to me the prog was a social look at middle class debt. Nowt wrong with that, but it meant my day doing a money makeover with Rosie was put in that context.

Now don’t get me wrong, it was an enjoyable programme, and the exposure is great. Yet sometimes when you’ve spent a detailed day crunching financial issues and it’s condensed into five minutes of social commentary, there’s a level of frustration and you want to shout “I said so much more than that, what about……..”

In fact having met Rosie, I drafted her a ten point plan of action and really hit through the finances. It was very different to my normal makeover, but I don’t consider MoneySaving is just for those with debt crisis. Actually, its about trying to make everyone more financially literate, consumer savvy and personally responsible, and in many ways Rosie’s the perfect example.

Interestingly the main fuss had been over credit cards, yet actually Rosie’s cards were only about £20k and all consistently at 0%, not a problem, she’d played it well. There was no ‘cut them up’ from me. Her overdraft and property issues were much more pressing.

She did mention at the end that I was shifting her debts to a long term life of balance deal. Actually (and I hope she doesn’t mind me writing this) that was her overdraft we were shifting, which was in much worse state than her credit cards.

Plus, rather than ‘manage your money every day’ I of course explained more about setting up the systemised piggybank series of banking. I also advised that she sell a house if possible, and start treating her property portfolio as a profession rather than a hobby. After all, at a couple of million quid, and some losing money, it’s almost a full time job.

Now let me be honest. I like Rosie, she’s entertaining. I’ve read the feedback in the Chat Forum about the programme and I know many people found her a little annoying and not taking it seriously enough. Having spoken to her in person, I know that actually she does take it seriously, wasn’t asking for sympathy, and was responsive to help.

Perhaps her slightly ‘jolly hockey sticks’ style makes it look like this wasn’t something she really cared about, yet actually she’s just a ‘glass half full’ person. Hopefully she’ll take it seriously.

For me it’s not about how much money someone’s got, but about making the best of what you have. Fail to do that, fail to act, allow companies to rip your cash from your pocket, mis-manage and be careless - these are all MoneySaving sins. Being rich isn’t (after all the aim of this site is to put money in people’s pockets not take it away).

Do you think screw is a naughty word? I’ve just come off air on BBC London, having had a knackering day doing ITV lunchtime news, a couple of other interviews, whilst trying to write three articles. It’s 6.30pm, and I’ve got a good 5 hours more work to go today.

Anyway back to the point. During Beeb London I was at full ’screw them before they screw you’ mode and was asked to mind my language because children are listening. Now for me screw isn’t a naughty word, screw and screw driver, tightening the bolt. The sexual connotation came later based on the word screw.

Anyway after the presenter said “our editors said please don’t say that again” which to be honest I laughed at, I then decided to say “suck our cash from our pockets” which in some ways is even more of a double-entendre.

Now (and I can say this as I know my grandma doesn’t read it, and would tell me off if she did) if I used the word(s) I would really love to use, fair enough. Let’s just say that the “Forget Loyalty” chapter in the Money Diet wasn’t its original title. Nuff said.

It’s interesting to see who reads the site. A huge well done for on-the-ballness today to Ian Barber, the head of PR at Barclaycard. My ‘Barclaycard loophole article’ was published over the weekend in short form in the Sunday Express and in detail here. Then this afternoon, I did what I always do, and checked the ‘feedback’ from the article, as often MoneySavers have questions or valid points.

In there was a note saying “the rate’s gone up from 5.9% to 6.9%”. Of course this is very annoying, after diligently researching, working it through and publishing for a rate change on the day - hmmmf.

So I immediately called Ian to be greeted by “you’re going to ask me if the rate’s changed to 6.9%. I’ve read the feedback too, I’ve already put a call in to our product team, they’ll get back to me soon and I’ll tell you.”

It turns out they have switched the rate. To be fair to Ian, he didn’t know (as the whole article is about a ‘hidden deal’, these aren’t the type of things companies talk about) but was quick enough to make sure he checked it out and found out. If only they were all like that. Barclaycard may have a usually pants product, but it’s pretty good at the communication side.

PS. My worst ever memory of a purile PR person was the call two days after my ‘Deal of the Week’ on the cheapest share dealing service which was a flat £7 per deal. The PR said “I see you’ve just written about a share service. Well my client’s just launched a new one, why don’t you cover it next week?”

Turns out this new offer was £15 per deal - so this call was to say “please repeat your article on exactly the same subject to recommend the company that’s twice as expensive as your recommendation. I won’t print my reply here. The language was colourful, but the “which bit of the title Money Saving Expert don’t you understand?” was included, and needless to say whenever that PR is on the phone now, I tend to be too busy to talk!

It’s my birthday. Sadly I’m feeling old! To celebrate (commiserate) the MoneySaving team from the office and I went for a quick lunch nearby. Walking back through the shopping centre we were accosted, by someone trying to get us all to sign up for a credit card.

In the past in that location we’ve had a fee free Barclaycard for a year, and the Citibank Platinum with 1% cashback. Both top cards in their category. This time it was the ‘Monument’ card, a piece of pathetic perverse plastic with a 20% interest rate and 0% for only five months.

Now obviously, the MoneySaving team were the wrong people to ask to sign up to it, short shift would’ve been generous. What worries me though is that there were as many people there to sign up as the other two cards, yet this one is awful. Why do people assume that a stall makes it a better card? If they knew the person signing up gets roughly £30 for every 6 completed applications they’d realise why the hard sell was pushed on them.

Well it’s general election day and I’m about to settle down and watch the coverage with some friends. I’ve always been a bit of a political junky - and let’s be honest the election’s all about numbers and stats - so I love it.

During the day I was in Harrogate for the Building Societies Association conference to make a speech and do a question and answer session called ‘what customers want’. Well that was what they had written down, but I got to change it to ‘just because you’re a building society doesn’t mean you’re not as bad as a bank!’

It was enjoyable to do - a thirty minute tirade, where I got worked up (aka Radio 2 style) explaining the massive problem with Building Societies. It’s not that I disapprove, just that, as I told them ‘lots of your products are crap!’.

If building societies are there to support members how does the fact many pay 1% on savings accounts, charge 17% on credit cards, and have standard mortgage rates over 1% point higher than HSBC help members? While I don’t expect them to compete in the rate tart market, they should offer long term stability and decent products for those who want an easy life. Yet many use the same tricks as the banks.

It wasn’t an easy session for many to listen to, but they did care, and the response I got was pleasantly open and receptive. I think the question that summed it up for me was, “you say we shouldn’t have any bad products and no rates substantially below average, but what about if that isn’t economical for us?”

My answer: “then tell your customers not to have your products, advise them to go elsewhere and close down. If you can’t give your MEMBERS at least decent rates, if not best buys, then the entire premise of mutuality is lost”.

We’ll see…..

Didn’t have a good day today. The site crashed due to server problems. Five minutes after I was due on the Vanessa Feltz show on BBC London radio (on the phone). I was talking about thrift and ‘went off on one’ - having a go at the fact thrift should be secondary to being a sassy consumer. I was especially harsh on a Times journalist who’d written a piece on it. Unfortunately I’d misread the piece - she was telling people to be a sniper through their credit cards and I read it as snipper.

Thinking it was yet another ‘cut up your credit card’ piece of nonsense (it doesn’t help you - locking them away does, cancelling them does, shifting the interest does, cutting up your credit cards is nonsensical) I got in a fierce row -and realised later how it’d been me misreading.

Not fun. I feel guilty. When you make mistakes in my job - unfortunately thousands hear!