More people would prefer to receive a gift card or voucher as financial gift this Christmas instead of cash or a bank transfer, a survey shows.
But cash was the most desirable financial gift for all age groups under 45, new research from Link payments revealed.
A quarter of people would prefer to receive a bank transfer, while more than one in ten would happily receive a cheque.
With higher interest rates compared to last year, 14 per cent said they’d like money to go straight into a savings account with a further 8 per cent opting for Premium Bonds.
Most people would prefer to receive a gift card or voucher as a financial gift this Christmas but younger generations would prefer cash
Younger generations would prefer to receive cash though, with cash being the most popular gift among age groups under 45.
More than of under 25s said they’d prefer to receive cash as a Christmas present compared to a bank transfer or voucher.
This age group wouldn’t be opposed to a cheque either, with 22 per cent saying that they would like a cheque.
Four in five people are considering giving a financial gift this Christmas.
The most popular presents people would give this Christmas are a gift card or voucher, which 42 per cent of people said they would prefer to give followed by cash, with 36 per cent choosing this to give. Both come in ahead of a bank transfer at 16 per cent.
While many would be pleased to receive a voucher this Christmas, some will inevitably miss the mark.
They might be for a store the recipient doesn’t shop in, or they may simply decide cash would be more useful.
This is Money’s Helen Crane warns that some vouchers can come with infuriating small print such as short expiry dates, restrictions on where they can be used and even charges for keeping money on them for too long.
AJ Bell’s director of personal finance Laura Suter says: ‘Lots of gift cards go unused or get lost.
‘ In theory, the gift card should be replaceable if you lose it and the buyer still has the receipt – but that involves an awkward conversation with the gift giver that many don’t want to have.
‘Also, if the retailer goes bust you’re likely to have a very limited time period to use the gift card before you lose the money altogether.
‘All-in-all they are pretty inflexible and not an ideal gift.’
Of those giving cash as a financial gift, the most popular amount to gift is between £20 and £50 with a further 17 per cent likely to give between £50 and £100.
Laura Suter says: ‘In an increasingly-digital world cash feels a bit old school – particularly for younger people.
‘It offers flexibility, so children can choose to spend it or save it, but it can’t be used online without first transferring it to a bank account – which could be a hassle for some people. It can also be easily lost along with wrapping paper at Christmas.’
For those who would be pleased to receive Premium Bonds, there is a lot going for this as a financial gift.
You can save as little as £25 and they are Government-backed, so are a safe home for nest eggs and and you have the added bonus that they might make your child or grandchild a millionaire with the monthly Premium Bonds prize draw.
While the expected prize fund has improved recently, you’ll still often earn less than a cash savings account and the bonds you buy could win nothing.
If you chose to put money in a savings account as a gift for a child, you should hunt around for the best rate possible, and then make a note to check back on the rate in a year or two, as banks have a nasty habit of slashing the interest on offer and relying on people not moving their money.
Cash rates have risen recently, so you can get a decent return. But for longer-term savings inflation can eat into your spending power and you might be better off investing.
That means if the child is young and a has a long time until they’ll need the money, you should think about investing.
>Read more about the best ways to save for your child’s future this Christmas
New research from AJ Bell found that almost two-thirds of people will give a financial present this year, whether that’s cash, bank transfer, Premium Bonds or gift cards.
Laura Suter says: ‘For tricky-to-buy-for teenagers, an awkward aunt or teachers at school, financial gifts can be a good and quick way to give a gift.
‘Before buying that gift card or stashing a £20 note in a Christmas card, there may be better options for gifting money.
Putting money into a savings or investment account, or buying Premium Bonds, might be a better way to give a longer-lasting gift that doesn’t get lost down the back of the sofa.’
22 December will be busiest ATM day
On average, UK customers typically withdraw around £1.6billion a week and this year, Link expects the busiest day of the year to be Friday 22 December with an estimated £500million likely to be withdrawn.
The busiest day for cash machines on the Link network was back in 2016 on 23 December when £730million was withdrawn in one day.
While more people now pay for things using their phones or cards, LINK still expects somewhere between £450million and £500million to be paid out on Friday 22 December this year.
Graham Mott, director of strategy at Link, said: ‘Christmas is always the busiest period for cash machines with lots of people withdrawing money to pay for shopping, a round or two at the pub or as a gift.’
