The year that was 2009
2009 has been a rollercoaster of a year, with numerous ups and downs and twists and turns.
For some the last year has seen reasons to celebrate, including borrowers on existing tracker mortgages deals or investors who have seen the stock market rally. However, for savers and those about to retire, it's been another punishing year.
Michelle Slade, spokesperson for Moneyfacts.co.uk commented: "2009 has been a mixed bag for mortgages borrowers. Bank rate falling to an all time low meant those on existing tracker deals or and SVR as low as 2.50% saw their repayments plummet.
"Many borrowers are seeing this low interest environment as an ideal opportunity to overpay on their mortgages contrary to the Bank of England's ideal, which would have borrowers go out and spend.
"Borrowers looking to secure a new mortgage deal, particularly a fixed deal, have not seen rates falling as much as they might expect, with rates steadily increasing during the year.
"Only in the last month, as lenders become more accustomed to the post banking crisis world, are we seeing competition start to return to the market.
"Borrowers will be hoping that 2010 will see lenders reducing the perceived excessive margin for risk with rates continuing to fall and that the tentative steps being taken to offer competitive rates at higher LTV levels will continue."
Unsecured Lending
"Unlike on secured lending, lenders have no guarantee of getting their money back. As unemployment continues to rise, the risk of customers defaulting on payments increases and this increased risk is being reflected in higher rates.
"Card companies are continuing to offer competitive introductory deals, but appear to be severely limiting who they will accept for such deals.
Savings
"Savers have had a dismal year as rates have fallen to record lows. Those that rely on the income from their savings to supplement their income, such as pensioners, have been the hardest hit, with many having to make changes to their lifestyle as a result.
"Only savers prepared to lock money away in fixed rate products have really benefitted, where the demand for savers' money has pushed rates ever higher throughout the year.
"The Bank of England is expected to keep base rate on hold for most, if not all of 2010, leaving savers with little hope of any real change in rates next year.
"Savers' best friend next year may well be inflation, which if it continues to increase, may cause the MPC to increase rates sooner rather than later."
Life Assurance (£100,000 sum assured, non-smoker, 25 year term)
Richard Eagling, Editor of Investment Life and Pensions Moneyfacts commented: "The protection market is closely driven by the mortgage market and has suffered a frustrating year.
"There has been no let up in the price war that has engulfed the term assurance market in recent years, with re-pricing activity rife in 2009.
"As a result, level term assurance premiums have fallen further during the past year. For instance, the average monthly premium (based on £100K sum assured for a male non-smoker aged 30 next birthday over a 25 year term) has decreased by 7.9% over the last 12 months, and 11% for an equivalent female.
Richard Eagling, Editor of Investment Life and Pensions Moneyfacts commented: "The protection market is closely driven by the mortgage market and has suffered a frustrating year.
"There has been no let up in the price war that has engulfed the term assurance market in recent years, with re-pricing activity rife in 2009.
"As a result, level term assurance premiums have fallen further during the past year. For instance, the average monthly premium (based on £100K sum assured for a male non-smoker aged 30 next birthday over a 25 year term) has decreased by 7.9% over the last 12 months, and 11% for an equivalent female.
Pension Annuities (£10,000 purchase price, Level without guarantee)
"2009 has been a difficult year for annuities, with rates at an historic low.
"The programme of quantitative easing authorised by the Bank of England to help nurse the economy back towards health has had an adverse impact on annuity rates by keeping gilt yields artificially low.
"The average rate for a male aged 65 purchasing a level without guarantee annuity (based on a £10K purchase price) has decreased by 10.3% over the last year, whilst the equivalent female annuity has seen a 10.4% reduction.
Pension (£1,000 pa over 15 years)
"Despite an upturn in the performance of pension funds, there have been few signs of any substantial progress in tackling the pensions crisis in 2009.
"The latest figures from the ABI show a disappointing 23% drop in total regular premium individual pensions business in Quarter 3 and a 24% decline in single premium business.
"The most controversial decision of the year is the Government's decision to cap pension tax relief for high earners. Initially affecting those earning over £150K, the Pre-Budget Report has since moved the goalposts, meaning that anyone with an income over £130K could be caught.
Unit Trusts (£1,000 investment over 10 years, total return, UK net, apply initial charges)
"After enduring a truly dismal 2008 and a difficult start to 2009, investors have enjoyed some bumper returns this year.
"Testament to the impressive stock market rebound is the fact that all the IMA sectors have posted positive growth over the last year.
"The average unit trust fund is up 28% over the last twelve months, a stark contrast with 2008 when the average loss was 25%.
"In many cases it is the funds and sectors that suffered the heaviest falls in 2008 that have proved to be the stand out performers this year."