Martin Lewis interview: Living by numbers

Published on Wednesday 15 April 2009 14:22

IF MARTIN LEWIS HAD HIS WAY, financial education would be compulsory in schools, politicians would be banned from using soundbite-speak when it comes to our financial welfare and none of us would spend more than we can afford.

I admit, for someone like me, who until recently saw the mark of financial success as the ability to stop opening bank statements, Lewis's logic hasn't always hit home. But these, as we all know, are changed days. I, along with thousands of other people, have used one of the founder of moneysavingexpert.com's template letters (available free on the site) to claim back old credit card charges (don't ask) and I'm investigating changing my electricity and gas suppliers, just as Lewis says I should.

Lewis's website may once have been dismissed as top tips for those with an over-developed interest in APRs (what, that was only me?) but these days it's much more. With over a million people subscribed to his weekly e-mail of money-saving advice, I suspect more people feel that Lewis has helped them manage their personal finances than Alistair Darling, Gordon Brown and Mervyn King combined.

According to Lewis, financial success is simple: make sure you've got the cheapest debt possible, pay it off as quickly as you can, don't spend more than you need to and get the best value for absolutely everything. Easy. So why can't we do it?

Money used to make the world go around. Now it seems to have rattled it on its axis. The problem, at least in this country, is that we are expert spenders and, of course, borrowers. But when it comes to anything else – managing it, saving it, growing it – we're not so good. In 2008, Britain's personal debt increased by 1 million every ten minutes. In recent weeks, our national debt has more than doubled. There are so many zeroes (it's around 1.5 trillion) it's easier just to say it's nearly two times our gross domestic product. In other words, not good.

Walking along a blustery street in Shepherd's Bush to Lewis's offices, I pass newspaper billboards scrawled with dire warnings of job losses and bank collapses. I can't think of a better time to meet the man who made it his mission to help us get our bank charges back and whose website urges "consumer revenge". I feel I need some reassurance; I hope that Mr Lewis is the man who's going to give it to me.

When Lewis, 36, walks into the bar on the ground floor of the building where he works, he looks just like all the other punters, thirtysomething media types (including Gok Wan sitting at the next table, discussing handbags, loudly). Lewis is the perfect financial expert for these final days of rampant consumption and burying our heads in the sand about debt. He doesn't wear a suit, he's not averse to consumerism, but he's totally sceptical of the motives of big business and banks. Lewis is on a mission to empower us. He wants us to get smart about money so that we can take on the companies that make cash out of us and beat them at their own game.

So how often do people ask him for help?

"Everybody asks me," he says. "I don't mind it. Or I don't mind it until people won't take no for an answer. No-one asks me for my autograph; they just say 'Hi, can I ask you a quick question?'. But a hundred times a day…"

Lewis believes that if he spent a day with the average person on the average salary he could save them 5,000. If you devote a day to going through the budget planner available free on his website by yourself, he reckons you'll save 2,500 minimum. It's not surprising that people want to talk to him.

"I get it and that's the message I put out there," he says. "But people have to understand, on a Tuesday night at 9:45pm, I've been up since 7am and I've just left the office. I'm incredibly tired and I can't sit down for an hour and a half to sort out their money. I can't do it. I won't survive it."

It may sound dramatic but it's not. Lewis knows the toll that debt takes on people. So many e-mails arrive at his office from people who are suicidal because of their worries about money the company has a protocol to deal with it. Lewis stopped using the Tube after a woman threatened to kill herself unless he sat with her and helped her to sort out her finances.

He also knows the toll being the "money man" (that's what people shout at him in the street) takes on him. A couple of years ago, he worked so much that he made himself ill. He was stressed and strung out. It was a warning sign that his resources are not infinite and he took it seriously.

"There's a huge amount of pressure on me in what I do now," he says. "I work hideous hours and I've worked those for a very long time. I'm constantly working and if you ask my team, it's not so much the hours, but the pace. It never stops – it's always frenetic and it's exhausting.

"I can't see myself still doing this in ten years' time. I'm going to be 37 this year. I certainly don't see myself doing this at 47. At some stage I'd like to retire from the TV and website. I want my legacy to continue, I think the website is an amazing beast and I think it has created genuine social change. I often say the website is much bigger than me, it's a movement. I don't want that movement to end but I do think there'll come a point when I'm not the figurehead of that movement."

There's more than a touch of political zeal in the way Lewis speaks. And for a man who makes at least part of his living from appearing on television and radio, he's handy with a soundbite. But he's obviously passionate about what he does – he freely acknowledges that it's his "mission". Maybe that's because it took him a long time to find it.

Studying Government and Law at the London School of Economics, Lewis's first job was as president of the students union. He admits that at least for a time, he harboured further political ambitions ("I did see myself on the green benches") but he landed up in the City, working in public relations. "I learned very quickly that I was on the wrong side," he says. "I'd come from being a rabble-rousing political speaker in my own little pocket and I went into a job which was about communicating a corporate message. It was uncomfortable for me. I didn't feel that I was doing what I was born to do."

Lewis makes statements like that without batting an eyelid. What is it – self-confidence, self-belief, self-promotion? A bit of all three, I'd say. He gave up the City job – "before the pay got too big" – and trained as a broadcast journalist at Cardiff University before joining the BBC. It was at a small, independent television channel that he got the break he had known would come. "Within a week we realised that they (his new colleagues] didn't know their ISA from their elbow so I got promoted to correspondent. And a week later, I got promoted to on-air editor."

From a one-minute slot every three hours called Deal of the Day, Lewis spotted his niche. "Six months later, it was ten minutes every hour, the mainstay of the programme and 97 per cent of the channel's website hits."

Have I mentioned that Lewis is good with numbers?

As you would expect, he has plenty to say on the current economic crisis. It's just as well, as he tells me he's been asked a number of times whether his mantra of frugality and personal responsibility is one of the dangers to the economy, clashing as it does with the government's call for us to spend.

"There's a confusion of message. At one point we're being told to save, then we're told it's good to spend, then it's good to borrow," he says. "There's a nice phrase: five good consecutive short-term decisions does not make one good long-term decision. I think that's the problem at the moment. In the short term, we do want people to spend and borrow, but in the long run that's what's killed us. So when I hear the call for us to get back to 2007 levels of borrowing I sit there thinking, well hang on, that's what caused the problem in the first place – hideous personal borrowing."

Magnanimously, he doesn't think the government is ill-meaning. He even reckons they sometimes do "good stuff", but the soundbites of government obviously irritate him.

"The thing that made me throw my sock at the telly most this year was watching Gordon Brown talk about gas and electricity. He said he wants to encourage everyone to pay by direct debit because it's cheaper. I absolutely agree, I've been saying that for seven years; it's very good he's caught up. What he failed to say was the next two points that I always add: make sure that you take a meter reading, and be careful because the bastards will charge you a lot more than they should do and your cashflow will be hurt in the short run. If I was the prime minister making that announcement, I'd be incorporating that message and we'd be protecting people at the same time. Not understanding the practical spending lives of the UK public – that's the biggest problem."

He has another problem too. Recently Lewis discovered that people aren't using the templates on his website properly. "Where it says 'Your Name' some people would leave that there and write their name beside it. Some people would send the letter without including their details. People are so desperate for help they just don't get it.

"Some of the friends I've told about this have said, oh god, that's pathetic. My answer is that people are in desperate need of help. My eyes are tearing up at the thought of it." (They do.]

Lewis's passion is financial education. He has a personal interest in teaching because he grew up volunteering in the special needs school where his father was headteacher. So who taught Lewis about money? Did his parents sit him down with his pocket money and talk him through investment options?

"No, it was intuitive for me. I'm a numbers boy. In fact I've got a meeting ..." he looks towards the door where a middle-aged man, who looks a little out of place, has just walked in. "Look at that," squeals Lewis, fidgeting in his seat. "I was just going to talk about him and he's walked in. That is my Uncle Tony, Tax Tony. He's come for a meeting today. When I was eight or nine, Tony, who thinks in a very similar way to me although he's more conservative and not so much of a show-off, would ask me, what's 13 x 27? Or what's 384 plus 2721? Those were the games we played.

"No-one taught me about money but I was intuitive about it. I always had money in my pocket. I was given less than my older sister but when we'd go out she'd never have anything and I'd always have 20 in my wallet."

And what about now? He bought his Kensington flat with cash, he's a wealthy man. How does it feel to be called Britain's tightest man?

He looks a little weary. "It makes me smile but it's completely untrue and actually it fundamentally completely misexplains (sic] what I do. I have no problem with spending money. I have a big problem with value. I like value, I'm not tight.

"If I'm thirsty and need a Diet Coke and I go into a shop and it's 1.50 for the small bottle I won't buy it. I can afford to, but I won't because that's just wrong. But if I want to go on a really nice holiday I'll do it. I'll stay in a five-star hotel. I will, of course, spend time making sure that I've got the cheapest price and trust me, sometimes my fiance (Five weather presenter Lara Lewington] says, 'Can't we just book? You've been on there for four hours.' And I'm like, 'No, I'm sure I will get it cheaper than this.' We'll go to a really nice place, to the hotel we wanted, I'm just not willing to pay 400 more than I need to for it."

There's another thing that drives his fiance mad.

"If we're going out for dinner and the place that we want to go has a voucher offer but we don't have it with us, I won't go in. I won't be seen somewhere where people are using my vouchers and I've not got one. We've just decided actually that I'm going to print off every voucher and carry them with me in my laptop case so that I've always got every voucher with me."

There's no doubt that Martin Lewis is a smart man. There's no doubt that his idea of arming consumers with the "screw them because they'll screw you" mentality has saved a lot of people a lot of money. Am I dreadfully shallow to say that doesn't mean I always want to print off a voucher? Probably not shallow, but possibly never destined to be a millionaire.

Lewis is far from complacent about the present difficulties but he does know they'll end.

"A couple of years ago I was doing The Jeremy Vine Show (on BBC Radio 2] and we were talking about house prices and I said for effect that I can guarantee there's going to be a house price crash, the only thing I don't know is whether it'll be in six months, a year, two years, five years, ten years or 20 years. The most damaging thing Mr Brown has ever done is to say that we've seen the end of boom and bust. That is what I hold him personally guilty of, not for the decisions he's made, because saying that means that you don't have to protect yourself any more for the bad times.

"Ultimately we work in cycles. In the good times people blinker themselves, they never think they're going to end. In the bad times we think it's never going to get better. Well it is. I can promise you there's going to be a boom." He smiles a little. "I just don't know if it's going to be in six months, a year, five years, ten years or 20 years."

• www.moneysavingexpert.com

How to get your cash back

So, do Lewis's tips work? I'm happy to say they do. Using template letters downloaded from the site I claimed back charges I'd paid on a Virgin credit card some four years ago. Sticking the stamp on the letter and enclosing a 10 cheque, as instructed, to cover the admin cost of providing a statement of all the charges that I'd been hit for, I didn't for one minute expect to get a penny back. But, three weeks later, the statement and my uncashed cheque duly arrived. And there they were – a painful reminder of my past financial incompetence – more than 200 of charges. Next step, ask for the money back. Using another template I informed MBNA that I believed the charges were disproportionate and asked for the full amount, plus interest to be refunded. How did I know the full amount? Website moneysavingexpert.com showed me how to work it out and provided an interest calculator, which bumped up the figure to just a bit more than 800. Another three weeks, another letter. It wasn't the full amount, but it was a welcome 315 "goodwill gesture". Triumph. To celebrate, I printed off one of Lewis's restaurant vouchers and took myself out for a cheap, slap-up meal. Happy days.