Three gifts that are worth giving

Rather than wrapping up presents this Christmas, why not give gifts which really last? Cliff D'Arcy suggests you give three unusual Xmas presents that will make your loved ones richer.

One of the great disappointments of Christmas is being given an unsuitable or unwanted present. Personally, I welcome such useful gifts as underwear, socks and handkerchiefs, as these can always be put to good use. On the other hand, I suspect that some of the tasteless tat which I see advertised on television won’t last much beyond the New Year...

So, if you’re struggling to decide what to slip into someone’s Christmas stocking this year, then may I suggest one of these three financial offerings? Some of these gifts just keep on giving -- and they won’t leave the recipient suffering from ‘tinsellitis’!

1. A regular-savings plan

In the housing and borrowing boom of the past decade, a large proportion of the population has forgotten the ancient art of saving. Therefore, one cracking Christmas present would be to help someone discover the savings habit.

For example, all children born after 31 August 2002 have a Child Trust Fund (CTF), which is a tax-free account promoted by the government in order to encourage families to save for children. In total, up to £1,200 a year can be placed in a CTF to give a child a better financial future.

If you’re giving to a child who doesn’t have a CTF, then I recommend using a regular-savings account. In return for making twelve monthly payments in a row, these savings accounts reward you with the finest interest rates. For example, the Halifax Children's Regular Saver pays a mighty fixed rate of 6% on £10 to £100 a month.

Alternatively, the First Direct Regular Saver for adults pays a fixed 5% on £25 to £300 a month. You could start a friend off with the first payment, and see how they get on!

2. Shares

If you believe, as I do, that the stock market is due for a strong recovery in the years to come, then why not gift some shares to a relative or friend? By doing so, you can hand over some or all of your ownership in a company to someone who may benefit from the long-term growth in its value.

If your shares are held as paper certificates, then you need complete a ‘stock transfer form’ in order to pass your shareholding to another person. If your shares are held electronically in a nominee account, then you will need to contact your broker to arrange a transfer.

To buy or sell shares, try the low-cost ShareDealing Service over at our sister site, The Motley Fool.

3. Pension

You don’t have to be working to have a pension. Indeed, anyone can have a pension, including non-workers, students and children. And anyone can contribute to anyone else’s pension. However, if a person has no earned income, then the maximum pension contribution is capped at £3,600 per tax year (£2,880 before tax relief).

With pensions, the earlier you start contributing, the better, so I have opened pensions for my five-year-old daughter and seven-year-old son. This is a great way to harness the long-term growth of the stock market, but my children won’t be able to touch this pot until they are at least 55.

By taking this strategy, I hope to transform them from babies to billionaires!

If you have any ideas for curious and offbeat Xmas gifts of a financial nature, then feel free to add your comments below. Thanks for listening!

*This article has been updated from an earlier version published in 2008.

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