The London Stock Exchange has a Martin Lewis-shaped hole
Martin Lewis has helped millions with his money-saving tips, but his views are too short-term, writes Simon Hunt.
Cultural observers have been stroking their chins over a recent social trend: a growing number of Brits are going to church on Sundays, reversing decades of decline.
It’s a curious phenomenon. But I would posit there’s a bigger emerging religious movement that merits closer study: faith in Martin Lewis.
The personal finance guru has a near God-like status among followers, who unflinchingly obey his commands, as if written on stone tablets. A high street bank will see floods of cash pour in overnight if their current account offer gets his blessing. Swarms of locusts descend if it doesn’t.
The sheer might of his holiness the Money Saving Expert extends not just to the general public but to our ministers of state, who scramble to respond, or even u-turn altogether, if their policies attract his wrath.
There is much to be said for following Lewis’s advice. Millions have become better at managing their money, making up for the dearth of financial literacy skills produced by our education system. Lewis is also much more attuned to the hardship and challenges facing many Brits, while ministers seem out of touch. And his website helped me pick my new credit card.
But nobody’s perfect. And despite his great attributes, many as they are, Martin Lewis is flawed in at least one respect: he values the short term over the long run.
That might explain why, as rumours swirled over plans to cut cash ISA limits, Lewis rushed to tell viewers to put more into their cash ISAs “sooner” to swerve the cut, rather than consider switching to stocks and shares. The government thinks more savings in stocks “would be better for the economy”, Lewis conceded. But these things “are as different as apples and steak” because “there’s a risk that you could lose some money.”
Martin Lewis is right that stocks are more risky than cash, day-to-day. But decade to decade? Someone who invested £20,000 into a MSCI World Index tracker in 2015 would have more than £40,000 today. Someone who put the same into cash would have less than £30,000. The difference dwarfs every bit of penny-pinching and cost-cutting the most loyal Lewis follower might make. There is a much bigger risk, therefore, that they end up poorer when they’re older.
On the subject of getting poorer, I’m reminded of how the London stock market continues to suffer endless outflows. But think what a difference a Martin Lewis blessing might make.