The best financial gifts to give this Christmas
Christmas is coming and most of us are now planning presents. If you are thinking about giving a financial gift this year, then there are a few things you need to be aware of, says Ruth Jackson Kirby
One thing you definitely want to avoid this Christmas is gift cards. When a company goes bust gift cards are rendered worthless and there is no way to get the money back. This year several high-street names have collapsed into administration, most recently Debenhams and the Arcadia group that includes Topshop, Dorothy Perkins and Wallis, among other brands. People with gift cards for the Arcadia group are rapidly discovering how little control they have over spending their vouchers. The group has put a limit on gift cards so you can only use them to pay for 50% of purchases. “If you’re thinking of giving gift vouchers this Christmas, let this be a warning to you,” says MoneySavingExpert’s Martin Lewis. With “so many retailers in trouble... give [people] money to spend... instead”.
Another option is Premium Bonds. You can now buy a bond for someone else for as little as £25. But the odds of winning have lengthened considerably from 24,500 to one to 34,500 to one. There have also been many administrative problems with National Savings & Investments (NS&I), the Treasury-backed bank that operates Premium Bonds, as we noted last week. After trying to buy Premium Bonds for his nephew, The Times’ James Coney was so bamboozled by administrative requests and an inability to get through on the phone that he gave up and said he was “not going to bother trying again”.
If you want to give cash, your safest choice may be to make a bank transfer to your recipient. For children, ask the parents if they have a junior individual savings account (Jisa) you could pay your Christmas present into. If they don’t yet have a Jisa, note that Coventry Building Society is currently offering the best rate on a cash Jisa: 2.95%. These accounts can’t be accessed until the child turns 18, however, so an investment Isa is likely to deliver better returns over the long term.
If you want to give something more exciting than cash, consider whisky, says Sam Brodbeck in The Daily Telegraph. Estate agent Knight Frank’s 2020 wealth report reveals which luxury investments have performed the best. “Over the past decade it is rare whisky that comes out on top – with prices up more than sixfold, some way ahead of the rest of the pack.” The report found that rare whisky prices have increased by 564% over the past ten years, compared with 141% for art or 77% for coloured diamonds. The most valuable whisky comes from the Macallan distillery: “its bottles keep breaking records”. One 28-year-old funded a deposit for a house after he “cashed in his collection of Macallan single malts for £44,000”. His father had spent £5,000 buying the bottles for birthdays.
Finally, don’t forget the oldest of all Christmas gifts: gold. Gold has appreciated by 34% over the past decade and by 400% in 20 years. The Royal Mint is selling gold bullion with prices starting at £75 for a one-gramme Christmas gold bar.