The fear is of another bucketful of fudge rather than any clear reform. So mistrustful is the pensions lobby that even the pledge to continue tax relief on contributions and tax-free lump sums was received sceptically This is damaging, and the Government must correct it. Stay flexible.The Chancellor did his bit for families and pensioners, although there was considerable frustration within the pensions industry that we were not given more of a clue about what we can expect in next month’s Green Paper. Avoid fixed-interest savings accounts, because these are likely to be overtaken.

Stick to shares in conservatively managed, cash-generative companies supplying basic goods and services.The winners? Apart from the aforementioned public sector workers, savers should do well as interest rates rise. Not before time, some say, but that is another story.The first thing for most people to do after they have recovered from their New Year hangovers is to tear up their credit cards and repay debt as fast as possible Second, equity investors should be more cautious. The shares worth looking at will be in companies that serve the public sector and its workers who, as the firemen, teachers and nurses are showing, are moving relentlessly up the pecking order. Every year for the next five years, an extra £1bn of taxpayers’ money will go to holders of Government stock in interest payments. Interest rates are already ticking up in anticipation.Company investment is expected to be subdued, and it will be a minor miracle if consumer spending does not hit the buffers. The party’s over.

It will be convertible into Gordon Brown’s mooted Child Trust Fund, or parents will be able to stop existing savings plans and move into the Government’s new one when it starts.”We put our family allowance into Sarah’s bond, and we don’t notice it,” said Mrs Lovell, who lives with 41-year-old Charles, a fishing-tackle agent, and their daughter in Tonbridge, Kent.They intend to keep it up until Sarah is 18. “It sounded what we were looking so we signed up.”Since then, early in 2000, Mrs and Mrs Lovell have been putting £20 a month into the bond for Sarah. At a time when the Government is finding it difficult to encourage people to save, we may find this means people swap from income-producing savings to savings that give capital growth instead.”For further information about the Tunbridge Wells Baby Bond, call 0500 800830, or go to ‘She can invest it’Sarah Lovell was just six weeks old when her mother, Alice, went to a financial adviser and asked what she and her husband, Charles, could do for their new infant.”He recommended the Tunbridge Wells Equitable Society Baby Bond,” Mrs Lovell, 36, said. Unlike the working families tax credit and the children’s tax credit, the pensioner’s credit will take account of savings income in the means test.”This means pensioners with relatively modest savings are being penalised for their prudence, especially if they have a small occupational pension. These will be parcelled up in a Green Paper to be published on 17 December.Ian Luder, tax partner at the accountancy firm Grant Thornton said: “Those with their hopes for a happy retirement invested in increasingly fragile pensions needed to hear good news, but with the announcement of the pensions green paper postponed until December, all they got was more uncertainty. New tax and national insurance incentives are being drawn up to encourage employers to provide child care.Every child is to be given the chance of reaching the age of 18 with a nestegg, either to use for for university, setting up home, or forming the basis of their pension fund.The Child Trust Fund, as it is provisionally called, will improve the future for all children and give those from less well-off families the chance of a better start in life, said David White, chief executive of Tunbridge Wells Equitable Friendly Society, which specialises in children’s savings.”Kids who need a driving licence and car to get a job when they are 18 will now be able to afford them,” he said “It gives them an asset they may never have had The fund will change the way people live. His favoured fund is the Schroder UK Alpha Plus.But, while the Chancellor left investors to fret, he had good news for the young and old.

This is not going to be a market for passive investment, but for those who can pick the right stocks.” Mr Dampier tips Asian equities for 2003, because they are better value than those in London or New York. Consumer spending will slow down considerably.”In these circumstances, Mr Dampier says, company profits will stay under pressure from competition, and that could keep the FTSE-100 share index bouncing between 3,600 and 4,500 next year.He said: “People have to be a lot more canny about the fund manager they pick, and I think those with a bit of grey hair are going to fare best. Then you have got to take into account that they are not raising personal income tax allowances in line with inflation, so Mr Brown is taking a lot of money out of people’s pockets with these measures. The average credit-card holder intends to spend £406, and 1.78 million cardholders are planning to spend more than £1,000 apiece.Mark Dampier of Hargreaves Lansdown, the West Country IFA, added: “The housing market is cooling already, and the 1 per cent increase in national insurance contributions starting next April is reckoned to be the equivalent of a 1 per cent increase in interest rates in itself. Any increase in Government borrowing is negative for the equity market, in that it takes money that might have gone into equities.”Jason Hollands, deputy managing director of the IFA Bestinvest, said: “The chances of higher interest rates next year will also have been increased by the choice of Mervyn King to succeed Sir Edward George as governor of the Bank of England.”Sainsbury’s Bank said this week that an estimated £11.6bn will be spent this Christmas on credit cards, 25 per cent more than last December.