Only one in four of us is saving enough for a comfortable retirement, according to the Pensions Index from NatWest Life. The Government's launch of the stakeholder pension next April is an attempt to address this situation, encouraging more people to plan for their own retirement.
But will it be a success? Paul Stott at NatWest Life predicts that the current trend towards more portable and flexible pensions will continue next year. The stakeholder scheme should make this easier but it will take time. "There is a low level of public awareness in attitudes towards the stakeholder pension," he says. "The Government will need to increase awareness dramatically if it is going to be successful."
Employers remain confused by stakeholder pensions, even though there are only four months to go until their launch. According to the National Association of Pension Funds, there will be a lack of committed support from employers until the Government reveals the tax details of the scheme.
A rise in interest rates early next year is likely. Lenders have been pushing their fixed-rate deals in readiness over the past few months, encouraging borrowers to fix their mortgage for one, three or, preferably, five years. This trend is likely to continue. Philip Dearing, chief executive of the Market Harborough building society, says: "We feel that an increase is likely in February, especially if the retail sales figures for Christmas and the January sales are buoyant."
The number of flexible mortgages - enabling home buyers to stop and restart mortgage payments - is also set to rise. Flexible deals are worth pounds 10m a year and make up 25 per cent of the total market. Tony Ward, managing director of First Active, one of only four pro-viders of flexible mortgages four years ago, believes the market will double in size next year. More than 34 lenders now offer flexible mortgages.
Following the announcement that the compulsory sale of home insurance along with mortgages is to be abolished, the stage is set for further reforms. CAT standards - low cost, easy access, simple terms - should be introduced early in the year, while there are also demands for the Government to enforce the calculation of interest on a daily rather than an annual basis, and abolish redemption charges.
The individual savings account will be one year old in April. ISAs are particularly aimed at the 6 million non-savers in the UK but the take- up has been disappointingly slow. Some ground should be made up in the early months of the year, however.
"There should be a very strong end-of-season sale in March and April while the pounds 7,000 investment limit [which only applies for the first year before it goes down to pounds 5,000] is still available," says Colin Wilson at NatWest. "But sales of PEPs in the previous year will still be higher than ISAs."
Industry watchers argue that many more ISAs would have been sold if they were easier to understand - a problem that the Government will be pressed by the industry to address.
There have also been calls for the Inland Revenue to take a lenient line next spring when it becomes clear how many people have bought both mini and maxi ISAs by mistake; the rules state that investors are not allowed to own both types.
The telecoms and media sectors are expected to be particularly busy as share prices head for higher ground. Stuart Fowler, head of UK and European equities and research at Dresdner RCM Global Investors, expects the FT- SE 100 to reach 8,000 by the end of the year.
"More growth stocks are likely to get promoted into the FT-SE 100 as investors chase technology-related issues," he says. "Corporate activity is likely to remain at high levels: we expect bids in the retail, financial and pharmaceuticals sectors in particular."
Make the most of that local bank branch because its days are numbered. Barclays is closing 200 of its 1,900 branches next year, while Northern Rock is closing 29 branches. However, there should be good deals for customers as internet banking grows in popularity and be-comes more competitive. Supermarket banks will increasingly use the internet to build up their customer base as they expand their range of products. Tesco, for example, plans to offer current accounts and mortgages.
Arguments over charging customers to withdraw their cash from ATMs should finally be resolved as the Government's revised Code of Banking Practice is published in the middle of next year. Paul Barber at Barclays says: "Hopefully, it will be a victory for common sense, introducing some form of pre-notification for customers of the charges they will incur for withdrawing money."