You might read books, listen to the experts on the radio or chat to your buddy on the golf course. The personal finance editor of your weekend paper could have a valid opinion or your accountant might steer you in a certain direction.

Of course none of this is really investment advice. The sources described above would be better described as information or possibly guidance.

Investment advice can only come from a suitably qualified and authorised individual who fully understands your financial goals and objectives before making specific recommendations.

Assuming this is the sort of investment advice you are getting (or plan to get in the future) how can you know if it is any good?

What separates excellent investment advice from the mediocre, rubbish or downright dangerous?

Here are five important questions you can ask your investment adviser to find out if what they have on offer is any good. These questions are equally as valid if you are engaging with a new adviser or if you want to put your existing adviser through their paces.

So, grab a notepad and pen, pick up the phone (or arrange a meeting) and pose the following questions.

1 – What is your investment advice process?

The delivery of consistently good investment advice requires the application of a robust investment advice process. Without such a process, the advice you receive will be subject to the whims of your adviser on that particular day.

The existence of such a process reduces the risk that you will be exposed to the latest investment fad, simply because it is new, hip and trendy on the day you seek advice.

Receiving investment advice from an adviser working to a robust advice process does not mean the outcome from the process will be generic or any less valuable. In fact, the outcome from the process should differ for every investor. It is the process itself that should be rigid, to ensure that the way in which investment advice is delivered is entirely consistent.

2 – What is your investment philosophy?

Your investment adviser should have a written investment philosophy. This document sums up his or her beliefs about investing money. It should be a set of investment rules about which your adviser feels passionately.

There are plenty of differing views when it comes to investing money. Some advisers will claim certain approaches are superior to others. There are usually strong counter-arguments to every academically ‘proven’ approach towards investing money.

What really matters is that your investment adviser has decided in their own mind to which views they subscribe and they are prepared to share these with their clients.

3 – How will you assess my attitude towards investment risk, reward and volatility?

Getting this right is a very important part of delivering suitable investment advice. Tolerance to risk can be very subjective, so a thorough assessment is essential.

This means much more than your adviser asking you to point at your risk level on a scale of one to something. Risk assessment should involve a combination of structured questioning and more general discussions about what you are trying to achieve, your experiences and views of the world.

You might also have a different risk profile for different financial objectives. Your adviser should cater for this as well.

We still see too many investors who have been pigeon-holed into a narrow risk definition. Once established, ask your investment adviser to describe your risk profile back to you, to ensure understanding. Always get a detailed description of your risk profile in writing for future reference.

4 – What resources do you have to enable you to deliver suitable investment advice?

The consistent delivery of excellent investment advice requires substantial resources. It cannot happen as a result of one man sitting in his office reading a copy of the FT.

Ask your investment adviser to describe the investment research software to which they subscribe and how they use it. Your investment adviser should be paying for professional research tools and not simply looking at the same data you can get for free online.

Find out about the other people involved behind the scenes in the investment advice process. Ask questions about their experience, qualifications and role in the construction of advice.

5 – Once you deliver investment advice, how do you keep it under review to ensure it remains suitable?

The worst type of investment advice is delivered once and then abandoned. Excellent investments need regular reviews, conducted at least annually. These reviews are the opportunity to rebalance the asset allocation of your portfolio, manage risk levels, replace underperforming fund managers and make sure you remain on track.

If you implement investment advice with your adviser, there is a good chance you will be paying for ongoing reviews through the annual management charge you pay, as a part of this charge goes to the investment adviser each year. Ask what type of ongoing reviews you will receive, the format of these reviews and (importantly) when you should expect to receive them.

What next?

With these five questions you should be able to get under the skin of your IFA, stockbroker or discretionary fund manager. Their answers to these questions will quickly reveal their competence (or lack of it!), helping you to make the right decision about where you get your investment advice in the future.

Martin Bamford is Site Editor of BrilliantWithMoney and Managing Director at Informed Choice; the award-winning firm of Chartered Financial Planners. He is author of Brilliant Investing: What the Best Investors Know, Say and Do (£12.99, Prentice Hall).

Nearly one in five (18%) people planning to retire in 2010 will be retiring on the State Pension and savings alone. This is according to new research from Prudential.

The Class of 2010 study was conducted by Research Plus between 3rd and 10th December 2009 with 6,073 UK adults over 45 years old, using an online methodology.

Nearly a third (31%) of those surveyed did not know how much the basic State Pension pays or over-estimated the individual weekly amount by £25 or more.

The basic state pension for a single person is currently £4,953 per year, or £95.25 per week. Could you afford to live on that?

On average, the basic State pension represents 34% of likely income for those retiring in 2010. The balance is made up of income from company pension schemes (36%), other savings and investments (11%) and personal pensions (9%).

It is interesting to note that, despite the current debate on mandatory retirement ages and the Government message that we all need to be working for longer in retirement, only 6% of income is likely to come from part-time employment.

Retirement can be a very challenging time financially. It is even more challenging if you fail to plan ahead and have unreasonable expectations of the State pension.

As a first step, request a State pension forecast so you can see precisely what level income you can expect to receive from this source when you retire. This is completely free to obtain. Simply visit www.direct.gov.uk and request your copy.

It is also a good idea to collate projections for all sources of retirement income. Look at the total level of income you might expect to get in retirement and relate this to your likely level of expenditure in older age. The gap between likely income and likely expenditure is the scale of your retirement income planning objective.

The earlier you start this process of retirement income planning, the easier (and cheaper) it becomes.

Rather than putting blind faith in the State, start planning today and understand your retirement income.

Martin Bamford is Site Editor of BrilliantWithMoney and a Chartered Financial Planner at Informed Choice. You can follow him on Twitter @martinbamford.

A one year investment track record is rarely long enough to establish how consistent a fund manager is. Three years is an improvement, but five years is far better.

Here we look at twelve of the most popular IMA investment sectors and reveal the top performing fund over the past five years. The results are a combination of popular funds that are widely available on the main investment platforms and more obscure choices that investors would struggle to access.

Here are the 12 sector topping funds from the past five years.

Sterling Corporate Bond – M&G Strategic Corporate Bond

Managed by Richard Woolnough, who joined the M&G retail fixed interest team in January 2004, M&G Strategic Corporate Bond fund aims to maximise total return (the combination of income and growth of capital). Over the past five years, the fund has returned 40.65% compared to a sector average of 11.14%.

Active Managed – Neptune Global Alpha

This fund aims generate a positive total return, from investment predominantly in equities and bonds. It has certainly acheived that investment objective over the past five years, with returns of 91.14% compared to a sector average of 34.16%. Neptune Global Alpha is managed by the award-winning Robin Geffen who has over 30 years’ investment experience.

Asia Pacific Excluding Japan – Fidelity South East Asia

This fund aims to achieve long term capital growth from a portfolio made up of the shares of companies throughout the Pacific Basin, but excluding Japan, with a bias towards larger companies. It is managed by Allan Liu, who took control of this fund in July 2003. Fidelity South East Asia has returned 188.89% over the past five years, compared to a sector average return of 119.06%.

Balanced Managed – CF Ruffer European

Whilst not a household name fund, CF Ruffer European has managed to deliver a return of 129.32% to investors over the past five years, compared to a sector average of 30.86%. Sitting perhaps unfairly in the Balanced Managed sector, this fund invests in a diversified portfolio of pan-European equities, although it may also invest in fixed interest securities.

Cautious Managed – CF Ruffer Total Return

Another appearance from CF Ruffer, with their Total Return fund which aims to achieve low volatility, positive returns from an actively managed portfolio of different asset classes, including equities, bonds and currencies. Managed by David Ballance and Steve Russell, this fund has returned 66.20% over the past five years, compared to a sector average of 19.85%.

Europe Excluding UK – Neptune European Opportunities

This fund aims to generate capital growth by investing predominantly in a concentrated portfolio of securities selected from European markets, excluding the UK. Over the past five years, Neptune European Opportunities has returned 108.84% compared to a sector average of 51.90%.

Global Emerging Markets – Baillie Gifford Emerging Markets Growth

Managed by Richard Sneller and William Sutcliffe, over the past five years this fund has returned 187.45% compared to a sector average of 137.61%. The fund aims to maximise the total return through investment, whether direct or indirect, primarily in emerging markets worldwide and in any economic sectors of such markets.

Japan – Neptune Japan Opportunities Retail

Chris Taylor has managed this fund since joining Neptune in June 2004 as Head of Research, with 28 years’ investment experience. The fund aims to generate consistent capital growth by investing predominantly in a concentrated portfolio of Japanese securities. It has returned 115.59% over the past five years, compared with a sector average of just 7.92%.

North America – Neptune US Opportunities

This fund has been managed by Felix Wintle for six years, and over the past five years it has returned 83.84% compared to a sector average of 21.08%. Neptune US Opportunities aims to generate capital growth by investing predominantly in a concentrated portfolio of Northern American securities which may include Canada as well as the US.

Property – SWIP Property Trust

The SWIP Property Trust aims to provide investors with a total return consistent with a balanced commercial property portfolio. Managed by Gerry Ferguson for just over five years, this fund has just about acheived a positive return with performance of 0.14% over the past five years, compared to a sector average of -1.74%.

UK All Companies – Rensburg UK Mid Cap Growth Trust

This fund aims to achieve capital growth from medium sized UK companies, specifically to exceed the capital growth achieved by the FTSE 250 Index. Over the past five years (to 1st December 2009) this fund has returned 92.90% compared to a sector average of 28.48%. The fund is managed by Paul Spencer who joined the Rensburg team in March 2006 from TD Waterhouse where he was Head of Research.

UK Equity Income – Schroder UTL Income

Whilst Neil Woodford is the big name in this IMA sector, it is Ian Lance and Nick Purves from Schroder who have the best track record over the past five years. Their fund, which aims to provide a growing income, predominantly from investment in UK equities, has returned 51.16% over the past five years, compared to a sector average return of 24.32%.

Past performance is not necessarily a guide to future investment returns. The value of these funds may go down as well as up. Performance figures are correct as at 15th January 2010 unless stated otherwise. Sources: Financial Express and Morningstar.

With a new year and a new decade under way, and the economic gloom persisting, it is an appropriate time for us to consider our financial positions and for us to understand what we all need to do to determine our financial independence.

However, the road to financial independence is pitted with stumbling blocks and distractions that can divert us from our course.

Here are seven of the most disastrous financial planning perils that can befall us; call them the Seven Deadly Financial Planning Sins if you like.

1 – Apathy

“It’ll be alright in the end”, “I haven’t got time to look at my finances now, daily activities are more important”

It is easy to put your Financial Planning to the bottom of the list because the long term is so far away isn’t it?

Don’t! Do not put this Financial Planning stuff off.

Time passes quickly (the Millennium doesn’t seem like ten years ago does it?) and you may find you can’t afford to when you expect to.

2 – Hope

In life, hope is a good thing but it cannot be relied upon. Do not hope you have enough to be financially independent when you want to be.

Work out what financial independence means for you (what ‘your number’ is) and put a plan in place to attain it.

3 – Greed

This is perhaps the oldest but least heeded lesson in Financial Planning. Too many people get caught up in the fervour of a bull run only to see their hard fought gains lost during a market crash.

Don’t chase every last penny of profit; leave a bit for the next person and ensure you have enough cash to provide security in an emergency.

4 – Inattentiveness

Financial Plans are not a one off document that, once established, will see you through to the end. Personal circumstances change, investment markets and economies rise and fall, and legislation changes.

By not reviewing what you have established, you are hoping your Financial Plan will do its job when in fact it may be stalling or in fact in decline.

5 – Indebtedness

There is little point in devising a plan to have your assets work as hard a possible for you if you are increasing your bottom line costs through needless loans and credit card debt.

Run your finances as a business by keeping control on your costs and focussing on profit.

6 – Imprudence

“If it seems too good to be true it probably is.” This is another often quoted and often ignored piece of advice.

You cannot get rich quickly without taking significant risk and even then you should only risk what you can afford to lose.

Think carefully about how much risk you are willing to take with your money and understand the downsides.

7 – Hastiness

Do not rush into an investment or contract that you may not be able to reverse or may mean you lose access to your capital for too long.

Always consider what you are investing in, read the terms and conditions carefully and seek professional advice if you are not sure whether something is appropriate.

Andrew Neligan is a Chartered Financial Planner and CFP professional at Informed Choice. He was a winner at the FT New Breed Adviser Awards 2009. Andrew is a specialist in Financial Planning services for legal professionals.

During such tough economic times, it is understandable that so many people stick their heads in the sand when it comes to their money.

By considering a few simple personal finance resolutions, it is possible to transform your personal finances and get to the end of 2010 with a much healthier financial position.

Here are our eight top personal finance resolutions for 2010.

1 – Work out your budget

It continues to amaze me how many people simply don’t know how much money they spend each month (and where this money goes). Working out and sticking to a monthly budget is all about spending less than you earn. If you achieve this, month on month, you will be in a better financial position at the end of 2010 than you were at the start.

2 – Get out of the red

If you have short term debt (credit cards, store cards, overdrafts, etc) you will know that debt is a drag on your ability to meet other financial objectives. It’s also an emotional drag on your attitude towards money and personal finances. Make clearing your short-term debt a priority before starting to save for other financial plans.

3 – Make a plan

This action ties in closely with your monthly budgeting. When you are working out what you are going to spend your money on each month ensure that you prioritise debt over savings. Stop taking on more short-term debt. Mark a debt-freedom day on your calendar and stick to it.

4 – Look to the future

Starting a pension is likely to be a big priority for many people in 2010. We recently heard proposals from the main political parties on the subject of pensions, all suggesting we will need to save more and work for longer. You cannot rely on the State for a sustainable level of income in retirement and that means you need to use a pension or another investment vehicle to create your own sources of income for later life.

5 – Pay less tax

No one enjoys paying tax but many of us fail to take the simple steps that enable us to pay less tax. Each and every year we waste an average of £132 per taxpayer because we don’t take some simple planning steps and maximise our tax allowances.

The simple steps you can take to pay less tax include making sure savings and investments producing taxable income are held in the name of the lowest earning spouse and using your annual Individual Savings Account (ISA) allowance. From 6th April 2010 we can each invest up to £10,200 each year into a tax-efficient ISA.

6 – Review your mortgage

The ‘credit crunch’ has made getting good mortgage deals more challenging, yet it remains important to review your mortgage regularly to ensure you are paying a competitive rate of interest. If you are on your lender’s standard variable rate (SVR) then you might be able to access a better product, saving you money each month which can go towards your other financial objectives.

7 – Sort out your financial affairs

If you don’t have a Will, get one. You can write your own Will but there are some major risks involved with this DIY approach, so meet with a solicitor to get this organised. If you die without a Will, your estate will be distributed according to laws created in 1925. It is no surprise that these laws probably do not reflect modern thinking on inheritance! Don’t risk dying ‘Intestate’.

At the same time give some thought to family financial protection, particularly what would happen to your family from a financial perspective if you were to die, lose your income or contract a critical illness such as cancer. It is possible to insure against these risks but you need to quantify them first. If you have existing life assurance plans, review them to make sure they remain competitive and appropriately structured.

8 – Meet with an Independent Financial Adviser

Make 2010 the year that you carry out a comprehensive review of your personal finances and Financial Planning with an impartial professional who has access to the tools and knowledge needed to improve your current and future position. Most IFA’s offer a free initial consultation with no obligation so they can identify areas that they can help you with and you can grill them about their qualifications, experiences and charges.

There are plenty of money saving experts out there, all with lots of different suggestions on the best ways to save money. The best ways to save money will depend on your personal circumstances and objectives in life. There is no ‘one size fits all’ approach to saving money.

If you haven’t reviewed your expenditure for a while then you are likely to be able to make substantial savings in 2010. What you do with these savings is up to you, but with analysts predicting a challenging second half in 2010, there is no harm in cutting back on what you spend and using these savings to pay off expensive debts or boost the size of your emergency fund.

Here are ten ways to save money in 2010:

1 – Review your mortgage

A mortgage is likely to be your largest item of monthly expenditure. Whilst the Bank Rate fell to the historic low of 0.5% in 2009, many mortgage interest rates remained at much higher levels. The recent partial recovery in house prices should favour those hoping to remortgage to a better deal, with the loan-to-value (LTV) making borrowers eligible for a more competitive rate.

2 – Save money on utilities

This week we saw the price of oil climb to over $78 a barrel, the highest price in nearly a month. As the world economy continues to recover, we expect to see higher oil prices in 2010 and this will result in a higher price for domestic energy supplies.

This article we published during Energy Saving Week in October described some simple ways to save money on your energy bills.

3 – Review your life assurance

The premiums you pay each month for life assurance, critical illness cover, income protection insurance and private medical insurance can quickly add up to a substantial amount. If it has been more than a couple of years since you started a protection policy, speak to an independent financial adviser to review the cover you have in place. You might discover that the cover you have in place is now redundant or that you are paying over the odds for the level of cover you have.

4 – Leave the car at home

Another, and more immediate, consequence of higher oil prices will be an increase in the cost of petrol and diesel. If you can leave your car at home more often, you will save money on the cost of fuel and also reduce wear and tear on the vehicle. You might also save money on your car insurance if you can reduce your annual mileage. And of course there are health benefits associated with walking or cycling rather than driving.

If your journey requires a car, then more fuel efficient driving practices can also save you money. Keep the car tyres properly inflated, reduce the weight carried in your vehicle, leave the air conditioning switched off and accelerate smoothly.

5 – Make a budget (and stick to it)

A great way to avoid wasting money is to have a written budget each month and make sure you stick to it. By deciding in advance where you will spend your money, you should make it easier to avoid the temptation to spend on frivalous or unnecessary items. Once you have made your budget, review it on a regular basis so you can compare where you planned to spend your money with where you actually spent it.

6 – Become a Freegan

Becoming a Freegan will not appeal to everyone, but there are money saving lessons to learn from their philosophy. At the most basic level, by living simply, reducing your consumption and sharing resources with others, you will be able to save a lot of money which can then be redirected towards other financial objectives.

7 – Get rid of your landline telephone

The newly introduced ‘broadband tax’ of 50p per month on landline telephones will make a lot of people think about the purpose of their phone lines in 2010. With low-cost mobile phone packages and free VoIP internet telephone calls (using free software such as Skype), you might determine that the few hundred pounds you spend each year on telephone line rental could be better used elsewhere.

8 – Have a water meter fitted

Speaking from personal experience, getting a water meter fitted at my house a few years ago was one of the biggest money saving items I have experienced. Rather than paying based on estimate usage, you only pay for the water you actually use.

The water regulator Ofwat estimates that getting a water meter fitted can reduce household water consumption by between 9% and 21%. On an average household water bill of £312, this is a saving of up to £66 a year.

9 – Cancel your TV subscription

For a lot of people, this money saving tip in 2010 will be a step too far, but cancelling your satellite television package subscription can save you a lot of money. The most expensive Sky TV package (Sky+HD with Sky World) is nearly £60 a month, so you will save over £700 in 2010 if you can bring yourself to live without the sports and movies they offer.

The introduction of Freesat in the UK means that, after the initial outlay for a Freesat receiver and dish, there is no need to pay monthly subscriptions to get access to a good range of satellite television channels. Add free Internet TV services such as the BBC iPlayer and Channel 4 On Demand (4OD) to the mix, and you might find the transition from paid to ‘free’ TV a little less painless than you originally expected.

10 – Always shop around

Your golden money saving rule in 2010 should be to always shop around. The Internet makes it quick and easy to compare prices on just about any product or service.

You can even use the Internet on your mobile phone handset to compare prices when you are physically in the store about to make a purchasing decision. This can be useful if you want to buy the item on the spot, but need some ammunition to haggle with the shop assistant before parting with your cash.

Martin Bamford is site editor of BrilliantWithMoney and a Chartered Financial Planner at Informed Choice. You can follow him on Twitter @martinbamford.

Trevor joined Fidelity in January 2006 as Asset Allocation Director.

In addition to managing funds, Trevor is a member of Fidelity’s Asset Allocation Group. He holds an MA in Mathematics from Cambridge University and is a qualified actuary.

In this video, he describes the investment market outlook for 2010 along with his views on price inflation and which asset classes could look most attractive next year.

For more outlooks from Fidelity fund managers, please visit www.fidelity.co.uk/outlook.

“In this world, nothing”, said Benjamin Franklin, “can be said to be certain except death and taxes”.

Everything else is uncertain, and therefore involves an element of risk. However, risk means different things to different people.

From the individual investor’s perspective, it can refer to the extent to which your capital might be at risk if you make an investment, or alternatively it could mean the opportunity cost of you choosing one investment over another.

Fund management companies use a range of different and frequently obscure measures to show risk within each fund that they manage. At Barings, we believe it is down to us as product providers to explain technical terms clearly for financial advisers and investors.

We don’t always get this right but, with this in mind, I would like to go through some of the most widely quoted measures of risk you might come across when looking at the performance of individual investment funds, and try to de-mystify some terminology.

Alpha

One of the most commonly used terms, but probably one of the worst examples of jargon, is “alpha”, sometimes represented by the Greek letter “α”.

The term alpha comes from the hedge fund world, and simply means the degree to which a fund has outperformed or underperformed the benchmark it is trying to outperform. This is usually taken to be a very simple measure of the skill of the investment manager, although this is not necessarily the case. While a high alpha figure should be a positive sign, it should be treated with some caution. The fund manager may be taking a lot of risk to achieve such high returns.

Alpha can also be used in the sense that it describes the potential rewards available to a manager with skill in a particular market. Where a market is thought to be highly efficient, there may be less potential for investment managers to deliver “alpha”. The US equity market, for example, is a notoriously difficult one for active managers to beat.

Beta

In the same vein, “beta”, or the Greek letter “β”, is commonly used to show the portion of the fund return which is attributable to the market. For example, if a fund delivers 8% to investors, and the market has risen by 5%, then the alpha would be 3% and the beta could be said to be 5%.

“Beta” is also used in a second sense however, and that is how the volatility – or the pattern of performance – of the fund compares with the underlying market index.

If the returns from a fund twist and turn with the returns from the stock market, it would be said to have a beta of 1.0. It would be precisely as volatile as the market in which it invests.

If, on the other hand, the amplitude of returns was higher, and the fund tended to deliver stronger or weaker performance on a regular basis, the beta would be higher. Lower but more steady returns would mean a beta of less than one and the fund could be said to have relatively “defensive” characteristics, or at least when compared with the market it was investing in.

Tracking error

Tracking error is another term which gained currency in the 1980s and 1990s. This shows the “standard deviation” (yet more jargon I’m afraid for the non-mathematicians) of the returns between the fund and the market index over a particular period.

Standard deviation measures the degree to which returns tend to be clustered together around the average or the extent to which they are widely dispersed.

Tracking error is typically calculated to one standard deviation. This means that 67% of the time the difference between the return of the fund and the return of the benchmark index will be no greater than the tracking error.

Information ratio

Finally, another very commonly used measure of risk is the information ratio. This is an attempt to gauge the skill of the investment manager in a slightly more scientific way than simply looking at the alpha.

Calculating it isn’t difficult though. It simply involves taking the annualised relative return for the fund – the outperformance or the underperformance relative to the benchmark index – and dividing this by the tracking error.

The end figure shows how much “value” has been added by the investment manager for the risk taken. Looking at all of these various measures, the information ratio is probably the only one, where more is almost always better. All of the others simply help to provide more information about the way the fund is run.

If you are considering investing, and you discuss it with a financial adviser, you will soon see how hard they work to establish your individual attitude to risk. At the same time, it is reassuring to note that they are likely to have thoroughly researched and evaluated the individual risk metrics of a host of investment funds before recommending any products to you.

Ian Pascal is Marketing Director at Baring Asset Management in London. Ian is responsible for all marketing communications including promotion of mutual funds, alternative investments and private clients.

Unlike our continental European neighbours, ownership rather than renting takes first place in the UK.

‘Getting on the property ladder’ is something of an obsession, right up there with discussing house prices at dinner parties or trying to guess which will be the next up and coming neighbourhood.

According to some new research from Scottish Provident, the British love affair with property ownership could be waning.

Of those surveyed, only 51% believe that property ownership is critical or very important for a reasonable standard of living. This figure appears to contrast sharply with property price boom of the past 15-20 years.

In fact, it is a decrease of 9 percentage points since the last time Scottish Provident commissioned their “High Wire” report in 2003. Back then, 60% of us thought that owning our homes was essential for a reasonable standard of living.

So, what has changed?

Property ownership has always been very demanding from a financial perspective. It is a serious financial commitment.

The vast majority of us buy property financed by a mortgage; usually the biggest bank loan we will ever have. Over the past year or so, getting access to mortgages has been like, well, getting money off a banker. It’s been something between extremely challenging and impossible.

When the banks realised they were technically insolvent and went cap in hand to world governments for a taxpayer funded bailout, one of the first things they cut back on was new mortgage lending.

The latest figures from the Council of Mortgage Lenders suggest that things are now improving, with the number of mortgages taken out to buy a home rising to the highest level for almost two years in October. We took out 55,000 mortgages for new purchases in October. This is the highest monthly total since December 2007.

To put these numbers into context, the lending figures in October are a 9% increase on the previous month and more than double the January 2009 low of 23,000 mortgages.

It is interesting to note from the Scottish Provident research that it is those in the 55-64 age group who have experienced the greatest change in attitude towards home ownership. 44% of those in this age group see owning their own home as very important for a reasonable standard of living. This is a 17% fall compared to 2003, when the figure for this age group stood at 61%.

The ‘credit crunch’ and general turmoil in global economies which acted as a catalyst for recent property price falls might be one of a number of factors which have started to fundamentally change our views on property ownership in the UK. The concept of a ‘job for life’ also appears to be rapidly disappearing, reducing confidence that mortgage repayments will always be met from steady employed earnings.

Naturally renting property, the main alternative to home ownership, comes at a cost as well.

In the current low interest rate environment, it is easy to identify rental costs in excess of ten times the equivalent mortgage costs for the equivalent property. This depends to some extent on the mortgage deal people are able to access (or are fortunate enough to be have left with when the music stopped) but in general terms renting can look like a very expensive alternative right now.

It will be fascinating to see how attitudes might change on this subject in the future. When it comes to any form of investment, people have notoriously short memories, so give it a few more years and there is every chance that the British public will fall in love with property ownership all over again.

Here are the ten things you need to know about the Pre-Budget Report:

1 – Income tax freeze

Income tax rates, allowances and thresholds will be frozen for the 2010/11 tax year at current rates. What this means in practical terms is that if your earnings rise next tax year, so will the amount of income tax you pay.

2 – VAT back to 17.5%

Value Added Tax (VAT) returns to 17.5% from the temporarily discounted rate of 15% on 1st January 2010. Retailers and other VAT-registered businesses will have to reprice their goods and services accordingly. We shouldn’t rule out VAT at 20% in the short-term, particularly as the UK has one of the lowest rates of VAT in Europe.

3 – New 50% income tax rate

On 6th April 2010 a new higher rate of income tax is being introduced at 50% on earnings over £150,000. At the same time, the personal allowance will be reduced by £1 for every £2 of earnings over £100,000. Higher earnings are going to be paying a lot more income tax in 2010/11.

4 – National Insurance hike in 2011/12

National Insurance contributions (NICs) for employees, employers and the self-employed are going up by a further 0.5% (so 1% in total) from 6th April 2011. The primary contribution limit is also going up so those earning less than £20,000 will not be paying more NICs.

5 – Pensions get more complicated

The world of pensions is becoming even more complex for higher earners, with immediate changes to the anti-forestalling measures which will capture those earning £130,000 rather than the previous £150,000 earnings threshold introduced in April.

6 – Basic State pension increases

The basic State pension is going up by 2.5% in April 2010 even though the Retail Prices Index (RPI) measure of price inflation remains in negative territory. This increase will only apply to the core part of the basic State pension, with other additional payments frozen at current levels.

7 – Banker Bonus Tax

If you are a banker and you receive a discretionary bonus of more than £25,000 between now and 5th April 2010, your employer will be taxed at 50% with the introduction of a Bank Payroll Tax (BPT).

8 – Inheritance Tax nil-rate band freeze

The inheritance tax nil-rate band has been frozen at £325,000 for 2010/11, which means estates will have higher IHT bills next tax year if property prices continue to increase as the economy enters recovery.

9 – Small business corporation tax rise deferred

If you run a small business, the planned 1% increase in the small companies’ corporation tax rate has been deferred for a year. It will rise from 21% to 22% in 2011/12.

10 – 50p a month broadband tax

Every household with a fixed line telephone will be taxed 50p a month to fund the roll-out of high speed broadband Internet access to 90% of homes by the end of 2017.

So, that’s the Pre-Budget Report 2009 in a nutshell. Ten points that you need to know and consider in terms of your own personal financial planning.

If you would like to read a more detailed briefing note and analysis of the main personal finance measures, you can download a free 17 page special report from the Informed Choice website at http://www.icl-ifa.co.uk/2009/12/prebudget-report-highlights-analysis/.