MTTM Podcast Episode 503 – Cut prescription costs, my 10 year portfolio insights & get an energy refund

Listen to Episode 503

On this week's show I explain how to cut the cost of prescriptions, particularly for those requiring multiple items or those receiving HRT. I then share some key lessons from successfully managing my £50k investment portfolio over the last 10 years. Finally, Andy explains how the energy payment cycle works and why late spring/early summer is an opportune time to check your energy account for potential credit and request a refund from your supplier

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Episode 503 Podcast Summary

Slashing Your Prescription Costs

Summary

In this segment, I discuss how you can significantly reduce their prescription medication costs. While prescriptions are free in Scotland, Wales, and Northern Ireland, the charge in England is currently £9.90 per item, which can add up, especially for someone like me, who has a chronic condition. Prepayment Prescription Certificates (PPCs) can help cut the cost for those who require multiple prescriptions, with a three-month PPC costing £32.05, (meaning you'll save money if you need four or more items in that period). A 12-month PPC costs £114.50, saving you money if you require 12 or more items annually. I also explain how the HRT Prepayment Prescription Certificate can offer substantial savings for women receiving hormone replacement therapy. I shared an example where savings could be as much as £217.80 annually for those on monthly estrogen and progesterone. It's important to note, however, that not all HRT medications, such as testosterone, are covered.

Key Insights:

• Prescription charges in England are £9.90 per item; they are free in Scotland, Wales, and Northern Ireland.
• Exemptions from charges exist for certain conditions, age groups (under 16, over 60, students 16-18 in full-time education), pregnant women, new mothers (within 12 months), and those on specific benefits.
• A 3-month Prepayment Prescription Certificate (PPC) costs £32.05, beneficial if you need 4+ prescriptions in that time.
• A 12-month PPC costs £114.50, saving money if you require 12+ prescriptions per year.
• A dedicated HRT PPC can lead to significant savings for eligible hormone replacement therapy medications.
• Not all HRT medications (e.g., testosterone) are covered by the HRT PPC.
• PPCs can be backdated by up to one month, with the possibility of claiming refunds for prescriptions bought during that prior month.
• Check the links in the show notes below for full eligibility rules and the list of covered medications.

Decade of Investing: My Lessons from a £50k Portfolio

Summary

In this section, I reflect on the 10-year journey of my £50k investment portfolio, which has grown to over £90,000. Some of my key strategies include maintaining a concentrated portfolio, typically between 10 and 14 funds and limiting the number of funds I hold from the same sector to a maximum of two or three, always ensuring they are different in their approach. I also manage risk by allocating between 5% and 15% per fund, usually less for higher-risk options. I stress the importance of having a consistent investment process, like the momentum investing I use for 80-20 Investor and sticking to it to avoid emotional biases such as endowment and anchoring. I always maintain a holding in gold, around 5%, and make sure to thoroughly "x-ray" my portfolio to understand the overall asset and geographic mix. I also discuss how I approach risk profiling, conduct regular reviews (at least annually, though I do it monthly for 80-20 Investor members), and prefer making gradual changes, much like "pruning" a garden, rather than wholesale changes.

Key Insights:

• I keep my portfolio reasonably concentrated (e.g., 10-14 holdings) so my good picks can make a real impact.
• I limit my exposure to any single sector to a maximum of 2-3 funds and always ensure those chosen funds offer genuine diversification by checking their top holdings and objectives.
• My typical fund allocation is between 5% and 10%, though I might go up to 15% for lower-risk funds.
• I've found a strategic allocation to gold (around 5%) is beneficial for diversification without adding excessive volatility.
• I always "x-ray" my portfolio: this means I look through the individual funds to understand the overall asset allocation (equities, bonds, geographic exposure) across all my holdings.
• I aim to maintain a balanced risk profile across my portfolio (e.g., roughly a third each in low, medium, and high risk), adjusting cautiously.
• Regular portfolio reviews are essential – at least annually. I prefer to make small, considered changes ("pruning") rather than drastic overhauls.
• I sometimes drip-feed out of positions rather than making all-or-nothing moves, especially if I want to reduce exposure gradually.
• During periods of high market volatility, I've learned that sometimes the best action is no action; it's better to be right than first.
• I've observed that index trackers can be favourable during market pivot points or times of high uncertainty.

Is Your Energy Account Hiding a Refund?

Andy explains why late spring/early summer (around May/June) is an ideal time to check your energy account for potential refunds. This is due to the "energy payment cycle": households typically use more energy than they pay for in winter (building up a deficit or using credit) and less than they pay for in summer (building up credit). Fixed monthly direct debits aim to balance this out over the year. By late spring, your account should be transitioning from winter usage to summer credit building. If your account has a credit equivalent to more than one or two months' direct debit at this point, you might be overpaying and could request a refund. Act with caution, ensuring meter readings are accurate (via manual submission or a functioning smart meter) and check that your direct debit is set correctly. 

Key Insights:

• The energy payment cycle means you use more energy in winter and less in summer, while direct debits remain fixed.
• Late spring/early summer (May/June) is a good time to check your energy account credit.
• If your credit balance is more than one to two months' worth of your fixed direct debit at this time of year, you might be due a refund.
• Ensure your meter readings are accurate and up-to-date before assessing your credit.
• Be cautious: ensure your direct debit isn't set too low, as asking for a refund could lead to issues in winter.
• Suppliers might refuse a refund if they believe the credit is needed for upcoming winter bills; they must provide a reason.
• If a refund request is unfairly refused, complain to the supplier first, then the Energy Ombudsman.
• Be aware that some suppliers bill quarterly but charge monthly, so your online balance might not reflect very recent usage; do your own maths to confirm your true credit.
• If you're planning to switch suppliers soon, don't bother requesting a refund as it will be processed automatically after the switch.

Episode quiz 

1. In England, what is the current charge per prescription item?
a) £8.90
b) £9.50
c) £9.90
d) £10.50

2. How far back can you typically backdate a Prepayment Prescription Certificate (PPC) application?
a) Two weeks
b) One month
c) Six weeks
d) Three months

3. What is the approximate number of funds I aim to hold in my portfolio to keep it concentrated but diversified?
a) 5-7
b) 8-10
c) 10-14
d) 15-20

4. What percentage allocation to gold do I typically aim for to diversify my portfolio, without adding too much volatility?
a) Around 5%
b) Around 10%
c) Around 12%
d) Around 15%

5. What crucial action did Andy stress is necessary to ensure your energy credit calculation is accurate?
a) Switching to a fixed tariff immediately
b) Paying by quarterly direct debit instead of monthly
c) Change the date that the direct debit comes out of your account
d) Ensuring your supplier has up-to-date and accurate meter readings

Answers

1. c) £9.90
2. b) One month
3. c) 10-14
4. a) Around 5%
5. d) Ensuring your supplier has up-to-date and accurate meter readings

Resources

Links referred to in the podcast:

• How to cut prescription costs
• Check if you are eligible for help with prescription costs
• Are you owed money from your energy supplier
• Take out a free trial of 80 20 investor

 

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