The people’s champion. The scourge of corporate shysters. The saviour of the nation’s piggy banks.
If ever there was a man who believed his own publicity, it’s self-styled ‘Money Saving Expert’ Martin Lewis.
But the sad truth is that if one man has done more than anyone else to hold back Britain’s entrepreneurial spirit and so turn us into a society of penny-pinchers, it’s him.
Thanks to his endless media appearances and his wildly influential website – he claims to have 16million monthly visitors with 14million signed up to his regular newsletter – uncountable numbers of Brits have swallowed what you might call the Lewis Doctrine. This holds that the way to manage your finances is to devote endless hours to finding a cheaper car insurance deal, to switch credit card balances to short-lived zero per cent deals, or to trawl through charts comparing the pathetic interest rates on bank savings accounts.
You can’t call this bad advice, because it will save people a tenner here, a tenner there. But it’s a fundamentally negative mindset. The simple fact is: nobody gets rich by saving.
And squirrelling cash away in high street savings accounts does little to boost the economy. It’s the next worst thing to stuffing banknotes under the mattress, particularly when most banks pay less than the rate of inflation.
Yet despite this, Lewis has carefully nurtured his reputation as something of a saint among money experts. A recent poll even suggested he is the most trusted figure on television, after Sir David Attenborough himself. Frankly, you’d have more chance of making your fortune by giving your money to one of Attenborough’s gorillas to invest for you on the stock market than by following Lewis’s miserly tips.
Martin Lewis has become one of the most trusted figures on our TV screens… but, writes Will Nutting, his advice is the next worst thing to stuffing banknotes under the mattress
Of course, for the truly vulnerable, caution is important. Those who have next to nothing can’t afford to lose what little they’ve got – and those with debts can benefit from advice on how to pay them. Equally, pensioners who cannot afford to take big risks with nest eggs that must last them deep into old age are wise to approach the stock market with hesitancy. Everyone, even the very richest, should have a cash ‘cushion’ so they’re not forced to sell assets if they need money in a hurry.
But applied to the whole country, excessive caution is ruinous. Margaret Thatcher understood this very well and ignited a boom by encouraging people to invest in the landmark ‘Tell Sid’ share-buying campaign of the 1980s. But Thatcherism has become a dirty word. Lewis, with his platform, could do so much to resurrect those values, specifically when it comes to investing.
If Lewis was a real investment guru he’d tell you that almost anything is better than playing safe. Let’s imagine a kindly relative had set £100 aside for you all the way back in 1965. If that money went into an ordinary bank or building society savings account, it would be worth £1,500 today (though, crucially, it would almost certainly have lost value after inflation).
In gilts – British government bonds – it would have reached about £2,800. In corporate bonds issued by companies, it could now be worth £9,200 – and thanks to the surge in gold prices, it would be roughly £12,000 in bullion.
But if that £100 had gone into stocks and shares – that is, vulgar, volatile equities, with the dividends constantly reinvested, how much do you suppose you’d be sitting on now?
Answer: more than £40,000.
This is not because stocks are ‘safe’. Nor because they are smooth. But because they represent the ownership of productive enterprise, rather than the careful hoarding of cash.
Prudence never multiplies your money. At best, it preserves it – if only in the short term. History has shown, however, that equities are a wealth-generating machine. Cash might protect you from catastrophe – but stocks build civilisations.
The irony, of course, is that all Martin Lewis’s penny-pinching advice has made him a very wealthy man indeed. Ten years after launching his Money Tips service, which became his website behemoth today, he sold the platform to moneysupermarket.com, while retaining a leading role as ‘Executive Chairman’, in a deal estimated to have netted him £100million. He continues to plaster his face all over the website.
The site profits from financial ‘affiliations’ through its links, meaning that many of the clicks users make to open a new bank account or buy a new iPhone through it makes money for the money-making expert.
What I find truly distasteful is his posturing on television, where his ego, as I said, has skyrocketed like a hot share tip.
On Monday Lewis was on the set of Good Morning Britain to confront Tory leader Kemi Badenoch over student loans
Martin Lewis represents the worst of British attitudes to money, writes Will Nutting
On Monday he was on the set of Good Morning Britain to confront Tory leader Kemi Badenoch over student loans, standing over her and browbeating her in a manner that was boorish, arrogant and a valuable indicator of his own majestic opinion of himself.
Literally talking down to her, gesticulating like a schoolteacher losing his patience with a slow child, he hectored Kemi: ‘If you want to help middle-earning students, the most important thing is the repayment threshold.’
When she tried to reply, he talked over her as though she knew nothing. You’ll struggle to find a more egregious example of ‘mansplaining’ – shouting at a woman as though she can’t possibly understand what he, a man, knows. The rudeness and entitlement were extraordinary.
In fairness, he did later apologise. And Kemi is more than capable of sticking up for herself. But she’s also the Leader of the Opposition, for heaven’s sake.
This is what happens when people have been on TV for far too long – they start to believe their own nonsense (and I could use a much stronger word). I was reminded of how Jamie Oliver barracked Tony Blair at Downing Street back in 2005 while campaigning for school dinners, telling the then-PM that his policies were ‘a bit wet’.
Who do these people think they are? Oliver is a cook, and Lewis is essentially an influencer. Yet they act like they should be running the country.
The student loans point is crucial. Lewis appears anxious to forget that, not so long ago, he was actively encouraging young people to take them out. Back in 2012 he even went as far as calling for student loans to be rebranded as a ‘graduate contribution’, so as not to portray them as what they were: plain, painful debt.
He has changed his tune now. But it’s far too late for countless graduates who are tens of thousands of pounds underwater, unable to keep up with the spiralling interest payments, and hamstrung in their efforts to get on the property ladder or start families. Typical repayments for those who started university between 2012 and 2022 now swallow 9 per cent of graduates’ income above a measly threshold of about £28,500.
It’s high time Martin Lewis was honest with his flock – and told them that thrift is not the same as wealth. If you have any ambition to be rich one day, do not listen to Martin Lewis.
Will Nutting is the founder and CEO of Nutstuff, a no-nonsense, investment newsletter read by leading fund managers and investment advisers.
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