The run up to Christmas and New Year is usually associated with spending rather than saving, but now is the ideal time to get finances in check and plan for a good financial 2009.
Key Findings from the latest Halifax research:
Look around for advice in 2009. One in two consumers (53%) chose friends and family for financial advice rather than visiting their high street bank or a financial adviser in 2008.
Need for advice widely acknowledged. Over half the population (51%) believe that seeing a personal financial adviser (PFA) would benefit their current finances, however, only one sixth (16%) have visited one in the last year. Pensions are a key concern and almost half of the population (40%) wish to seek advice on pensions over a variety of other financial products.
Make your pension your new year's resolution. Over half the UK population don't pay into a pension (52%). Furthermore, 70% of the population overestimate the state pension - on average, people think it is double the actual amount of £4,700. 85% of people overestimate their achievable desired retirement income, even though they are already overestimating what they are entitled to from the state.
Start early in the new year for the best rewards. On average, the UK population believes it is wise to visit a financial adviser by the age of 30, with the majority (54%) feeling that such advice is most beneficial between the ages of 20 and 30. Consumers want to retire at the age of 58
Karen Crowshaw, Managing Director of Halifax Financial Services said: "Most of us religiously hit the High Street for the pre-Christmas rush and the New Year January sales, but too few of us include banking products in our bargain hunting. By making a few small changes today and seeking the appropriate advice, you could make some significant financial gains in the future. In light of the recent financial climate, it has never been more important to seek out the best product deals available."
Halifax has prepared some timely suggestions in the form of four golden resolutions for people who are looking to turn over a new leaf in 2009...
Resolution number one: Always Shop Around
The majority of people will have at least one of the following: current account, mortgage, credit card. Now is the time to make sure you have the best deal available for you. Put interest rates at the top of your shopping list. Don't sit back and do nothing.
Make your current account work harder... Just because your money is in your current account doesn't mean it can't be earning money. Halifax's newly launched Ultimate Reward Current Account pays £5 per month, whatever the balance, should you be receiving £1,000 per month into the account.
Cut the costs of your spending ... Look for 0%. If shopping is done on an expensive store card or a card with a high APR you could end up paying much more than you bargained for.
The Halifax All In One Card offers 0% for 10 months on both purchases and balance transfers (3% handling fee applies to each balance transfer).
Resolution number two: Save, save, save
Set up a standing order...One easy way of getting into the saving habit is to set up a standing order so that funds can go straight from your current account to your savings account as soon as you get paid each month.
Become a regular saver...Halifax is the UK's largest savings provider and has a wide range of products to suit all pockets. One of the accounts you can chose to sweep your Regular Saver funds into is the Halifax Web Saver Extra, an online savings account which can be opened with just £1 that gives you the freedom to manage your money at the click of a button.
Get the kids involved...It's also a good idea to encourage children to save for the future, and the Halifax Children's Regular Saver pays 10% AER fixed on monthly deposits of between £10 and £100. After 12 months, the savings and interest are swept into another account, such as save4it, which pays 3.55% AER and allows instant access via branches. A great account that enables children to get involved with their own finances.
Halifax also offers a stakeholder Child Trust Fund, which is a long-term savings product that matures when the child is 18. Children born on or after 1st September 2002 receive a Government voucher of £250 to open an account, and family members can contribute up to £1,200 each year, which could build into a very useful sum when your child goes off to university or needs a deposit for their first home.
Use your full ISA allowance in 2009...Setting up an ISA helps to make the most of your savings and means you avoid paying tax on any interest earned. You can currently save a maximum of £7,200 each tax year, either by investing up to £7,200 in a maxi stock and shares ISA or a combination of up to £3,600 in a mini stocks and shares ISA and £3,600 in a mini cash ISA.
Resolution number three: Move closer to mortgage free day
Overpay on your mortgage...Making small overpayments on your mortgage each month will reap huge rewards over the longer-term. For example, on a £150,000 mortgage taken out on a variable rate of 5%, overpaying £50 per month will reduce the term of your mortgage by two and a half years as well as save you over £12,000. Overpaying by £100 per month on the same mortgage will reduce your term by four and a half years and reduce the amount repaid by over £22,000.
Resolution number four: Think 'pension pension pension'
Think pensions... According to recent Halifax research, almost half of the population (40%) wish to seek advice on pensions over a variety of other financial products. It is critical to start your pension planning as early as possible in life and seek the appropriate financial advice. Only one in three (36%) of the public realise that financial advice is available to them from their high street bank.
