Families turn to cash for this year's Christmas presents
Over a third (35%) of the UK population is planning to gift cash for Christmas this year rather than a traditional present, research from pensions and insurance provider Friends Life has found.
On average, people will give £114, while one in twenty (5%) will give between £200 and £500.
One in 10 men admitted they preferred to give financial gifts simply to relieve the stress of shopping, while over a third of people who gift money prefer it because it means the recipient can buy what they really want. A quarter of people (25%) believe a financial gift will be better received than a traditional one.
Lindsay Forster, Consumer Marketing Director at Friends Life said: “'Christmas is a time for giving and our research shows that increasingly, people are opting to give money so the recipient can make a choice on how they use it. It’s a great opportunity to help your loved ones think about how they manage their money, giving cash can help people to save towards things they really need.”
Dreaming of a cash-filled Christmas
Cash and gift vouchers are the most popular financial gifts with 32% planning to give gift vouchers. People are most likely to give money as a gift to their children (28%) with one in seven (14%) giving to nephews or nieces and one in ten (9%) to siblings.
When it comes to how and why people are planning to gift money this Christmas, the research found people want to contribute to large expenses and to help ease financial strain. One in 20 (5%) plan to contribute towards their loved one’s mortgage costs, while one in ten (10%) of those over 55s plan to give money to help someone in financial difficulty.
Respondents also give money to help with both immediate financial issues and long term savings. One in ten (9%) of 25-34 year olds have been given a contribution to a pension as a gift at Christmas and received contributions worth up to £2,000.
To help people saving for their long term future across the UK, Friends Life has the following tips:
1 Think about savings as a whole
Retirement savings can include more than contributing to a pension. For example, now that the overall ISA limit – the combined amount that you can save into a cash ISA and/or a stocks and shares ISA has increased to £15,000 a year, more can be saved into this flexible solution. Individuals should investigate all the options available to them to determine which solutions suit them best.
2 Consider carefully how much is affordable
People need to think now about what they spend most of their money on, and what they are likely to be spending their money on as they reach retirement age. This will help them to identify whether they have enough stored away or not relative to their income. With the cost of the UK’s top hobbies expected to rise above inflation over the next 28 years, it is even more important that the finer details are considered.
3 Make sure you’re in
Under auto-enrolment, all employers in the UK need to provide a pension scheme to their eligible employees automatically. Auto-enrolment has started for lots of employers, with the rest required to follow suit by 2018. In the meantime, people in employment can speak to their employer about whether they offer a pension scheme, how they can sign up and what contributions their employer may offer.
4 Consider consolidating savings
Few of us stay in the same job for our entire career which means many people have different pension pots. By consolidating your pension into one pot it can become much easier to manage and track the fund’s investment performance. You can potentially receive lower charges on just one pot. This should help boost retirement income. Consolidation will not be appropriate for everyone so it may help to speak with a financial adviser (charges may apply).
5 Get the full picture
The government is introducing a flat-rate State Pension (April 2016) and getting rid of complicated ‘second pension’ and ‘pension credit’ add-ons. This will make it much easier to put State and private benefits together to get a combined potential income at retirement. It may be helpful to access the state pension calculator a.
6 Invest in something that’s right
Most pension schemes offer access to a wide range of different investment options. The range, different levels of risk, charges and other factors can make choosing an option difficult. It may help to speak to an independent financial adviser (charges may apply), or make use of tools offered by providers that can guide people towards investments that may be suitable for their circumstances.
Consumers can discover more top tips at the Friends Life retirement hub friendslife.co.uk
Consumers who require financial advice can find an adviser at unbiased.com
