Concerned about the number of posters giving bad financial advice

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I've seen a few threads recently where posters are concerned about debt and their financial situation.

I am really concerned with the number of people giving dreadful financial advice. The worst has to be 'consolidate you debt with a re-mortgage'.
This is terrible advice and no one should ever turn an unsecured debt into a secured one.

The lack of financial education in general is terrible and is why so many people get into difficult financial situations - but some of the advice is dangerous.

Try being an HCP when the NHS is getting a bashing or poster claims to have done their research. Sometimes you want to scream “don’t listen”.
I would never dream of asking for debt advice on a forum originally created to provide support for mums.
It’s the same wherever you go on social media. The funniest ones are the local Facebook page posters looking for a cheap plumber or car mechanic who isn’t going to charge them more than £2 an hour for labour if they provide parts procured from EBay.

Good advice has to be paid for. Those seeking good advice for free will be disappointed.

This!! What is it with premium bonds

I am qualified in this area (I have been giving advice professionally for over 20 years) and occasionally post under another name but I agree some of the financial advice given on MN is scary.

Agreed, the amount of people who advise ‘paying down your mortgage early’ which is dreadful financial advice. You’re getting a personal projection based on soneone else’s own risk tolerance which seems to be zero mostly on here.

The eternal hope of winning big? As a savings product, they are useful and it’s fun to check for prizes, but in my view they’re a waste of money if you haven’t got investments and a topped up ISA. Plus you need to have a huge holding to win regularly.

in all fairness, I don't think sticking money in premium bonds while you're deciding what to do with it - is a bad shout - you're not tied into anything, no withdrawal penalty, and if you've got the full £50k then with average luck you'll get the same or even higher amount of "winnings" as interest you'd earn in a standard savings account, with the added advantage of not paying tax on them, and of course the (remote) possibility of winning big, and, what is the big seller for most people = guaranteed security.

So for the short term, for example, if there's a gap between selling one house and buying another and you need somewhere to put your deposit/equity, or
in cases of inheritance where the money side is tied up with emotion and people might also be trying to sort probate and whatever else so just not have the capacity to maximise their finances on top of everything else, you could do a lot worse.

Same applies to people saving for something specific in the next year or two - a new car/move house/next year's holiday, or even just the elderly who realistically might not be around in 5-10 years to get the dividends from an investment.

Not to mention people who aren't good with finances or don't understand investing - not everyone is, and if you don't know what you're doing it's better to at least look after the money you've got rather than risk losing it all. Same with people who hate risk - peace of mind can be worth thousands.

It's like any type of advice on here - very few people are able to give fully advice on any subject; it's almost always influenced by what they would do in your position (or what they imagine they would do if they've never been in it), forgetting that they AREN'T you. It's easy to say "open a S&S ISA and build a tracking portfolio," but less easy to do when you don't even know what most of those words mean individually, let alone together.

Yup which no one seems to get!

Premium bonds is not good even as short term as there are many savings accounts without withdrawal penalties that offer a better rate, premium bonds pay no interest at all so your 50K is still 50K in 12 months ( of course you might win big but the average rate is 3.6% so 51800 if average) while sticking it in a decent savigs account @ 4.5% it will be 52250 in 12 months available at Chase and Cahoot

Debt repayment is not just maths though; there is the emotional and psychology reasons behind it, some debt is due a series of misfortunes ( like a poster recently who arrived at new house only to find tenants so had to put stuff in storage and rent and airbnb and fund legal costs for months) but others is due to spending more than is earned, if you do not work out why there is debt it can become a cycle shuffling 0% credit cards is not dealing with root of the problem

which is why avalanche method of debt repayment is better mathematically but Snowball method seems according to research to work better as more likely to stick to it after a few small wins early on

It is rarely better to pay mortgage off instead of adding to pension or investing but for some people if debt even ok debt like a mortgage makes them feel financially insecure the stabilty of being completely debt free outweighs the mathematically advantages of investing whilst still having a mortgage

others are scared of any savings not guaranteed so would not consider any form of stocks and shares ISA or a tracker fund, this attitude works against wealth building but for some the thought that they could lose some money is too frightening so the money stays in savings account or NS&I bonds

Premium bonds is not good even as short term as there are many savings accounts without withdrawal penalties that offer a better rate, premium bonds pay no interest at all so your 50K is still 50K in 12 months ( of course you might win big but the average rate is 3.6% so 51800 if average) while sticking it in a decent savigs account @ 4.5% it will be 52250 in 12 months available at Chase and Cahoot

Worth remembering that prizes are tax free so for higher rate tax payers who have already used up their ISA allowance the numbers look quite different so PBs can be a good place to save money that will be required in the short term eg for a tax bill or to buy a car or to pay for home improvements or a house move.

as the pp has said, if it's just a normal savings account you will pay up to £450 interest on that £2250. More if you already have savings yourself before the additional money.

Nobody has argued that PB are the best option, full stop, or the one that is likely to earn the most additional money. They are saying that in certain circumstances they can be a safe and convenient option.

You sound very judgy - if something is too frightening or you don't understand it then not doing can be the right thing for that person!

I do see advice too from clearly comfortably off people ( and this sometimes is ones with high earning partners, inheritances etc) which whilst not poor advice as such , is totally impractical in many cases if the OPs circumstances as stated are taken into account - stuff such as ‘just move to a cheaper area’ (if renting this costs a fair old whack upfront before any chance of deposits back plus moving etc and Op may not have a great credit record or only work P/T etc , thus not fitting the conditions many agents put in and not allowing for any allowances they may get etc - or even LTB, when OP is not working or again wouldn’t have the deposits required for private rentals etc, etc or just get a credit card with a high limit and 0% to pay for xyz - this is easier said than done for lots and lots of the population

Think the varied spread of opinions from generally well informed people on this thread just adds to the argument that financial decisions are far too complicated to be made based on advice from mumsnet!

Well I’m glad we paid our mortgage off instead of investing in my DH pension as the company went bankrupt and his pension isn’t worth half as much!
But I’m risk averse so ISA it is as I’m the one having to sleep at night.
But most of mumsnet seem to have thousands and thousands in bank etc!

Well I don't have thousands in the bank, in fact I still have old debt from separating with my ex and becoming a single parent that i'm hoping to finally pay off this year but I do have a small pension with Nest that I'm hoping will grow enough over the next 15 years so I can retire with a modest income, if I can overpay my mortgage to get that paid off by retirement that would be great, if not i'll have to sell my small home for an even smaller one (assuming the kids have moved out) - it will be worth it to be mortgage free and I will happily carry on driving my reliable (touch wood) 21 year old car for as long as possible.

Not just on divorce - there’s some really duff legal advice on Wills/Probate and Conveyancing too.

Premium Bonds are an excellent choice in some circumstances. Eg.

• if you play the lottery. Swap to doing premium bonds.
• If you’re a higher rate tax payer and your isa is full and you want to hold cash somewhere that has a moderate amount of faff to withdraw.
• you need a savings account that’s not instant access, because your impulse control isn’t great, but also cant go for locked in fixed term accounts.

Reddit is no better. The most popular views get upvoted, not necessarily the most accurate. You see this any time you see a thread on a topic you happen to know more than average about.

You might as well ask Chat GPT.

In general for financial stuff when it's fairly normal/low stakes I tend to assume MoneySavingExpert is good because I've had good advice there before.

If there was a larger sum involved I would seek paid professional advice.

Oh and speaking of premium bonds my grandmother bought me a few over 40 years ago - and not once have I ever won any prize.

It is rubbish but I consulted a financial advisor recently to ask for some advice about my son. He has inherited some money. He wants to do a 5 year degree. The question was whether to pay for the whole degree (no loans) and then be left with a small house deposit £20,000 or to just take out whatever loans he was allowed and have a big house deposit. The financial advisor said he didn’t know. I don’t know either, which is why I asked. It doesn’t matter and it’s nearly 2 years away so we will have a think and try to get some sensible advice but I am just raising the point that the professionals don’t seem to know what they are talking about either!
If someone asked me a question at work and I didn’t know the answer I would tell them I would find out for them. I wouldn’t just say I didn’t know.

House deposit will make a bigger difference to his life. And I’m someone who mostly advocates for minimising student debt but if it’s a straight choice go house deposit…

Student loans come with a very big 'it depends', although the latest plan can be far more expensive (for many graduates, the cost has near doubled but a lot of people haven't really noticed) than the previous one(s)? that there has been a change in thinking on this.

Best reading what Martin Lewis on Money Saving Expert has to say about student finance as he's previously advocated never paying up front because most don't pay the loan off, but I think now he's saying it could be a consideration if you have plenty of money, the graduate expects to earn reasonably well over their career and it's not going to be a disadvantage vs having a big house deposit instead - for example in many places £20k will be a really decent house deposit but in others it won't touch the sides so if it's a case of paying their student costs and a £20k house deposit vs a £100k house deposit and them taking out student loans if they will be looking to live in a higher cost area so need as big as a deposit as possible, the latter might be the better option.

Also worth understanding that if they don't end up earning a huge amount, such that they'd never pay the loans off let alone the interest, paying tuition fees up front is money completely wasted because they'd never pay the money back anyway. But on the new plan, that's a lot fewer than previously.

If someone asked me a question at work and I didn’t know the answer I would tell them I would find out for them. I wouldn’t just say I didn’t know

Or you could help them find out for themselves, and part of this is understanding what is and isn't a reliable source of information.

And as this thread shows, forums can be a terrible source of information. People confidently post all sorts of shite as fact.

People also answer the wrong question. There's lots of threads on MN of the 'what would you do with £X' where the poster gives little information about their circumstances and it's not clear whether they're asking for advice on what they should do with the money, in which case it's impossible to answer without knowing their current financial situation and other relevant information such as age and wider picture about their household etc. Or are they just playing at spending fantasy money.

But in any case, you get hundreds of posts about buying holidays, putting the money in an ISA or moving house which isn't much use if the OP is currently living month to month and panics at the thought of the washing machine breaking.

I agree that Mumsnet is particularly poor on financial, employment and legal issues. I have found health and bereavement quite useful when posters talk about their own experiences. I do sometimes think there should be a "If you don't know what you're talking about, don't post" warning. (especially in employment where the advice is either "go sick" or "that's constructive dismissal").

However, I got out of horrendous debt with the help of Moneysavingexpert. The advice was sound and the posters so supportive. Stop spending, analyse where your money goes, cancel subscriptions (be brutal!), prioritise expensive debt, don't miss a mortgage payment. etc. Big no to consolidation and secured debt.

Not all forums....(fora?)

Thats Society generally especially on a female lead board.
Deliberate lack of education everybody always asks why isn’t this taught in schools?
Financial management was taught in schools capitalism would fall apart overnight.
The system requires more people to fail than succeed.

Everybody started being successful millionaires there would be no billionaires And we can’t have that, can we?

some of the advice will be valid, but working out which is decent advice or low risk is obviously the key

someone advising to check if there was irresponsible lending, could lead to a refund https://www.stepchange.org/debt-info/your-rights/irresponsible-lending-and-affordability-checks.aspx

the op may never have know about such a check, so the advise might be very useful

alerting someone to a high paying rate interest savings ISA may be of use

i agree that advice to put debt onto a mortgage is rather foolish for many reasons, one being the root cause of the debt may not have been looked at, so probability is the person in debt will do it all again. Apart from the other reasons it’s a foolish idea imo