Gift cards are at the top of the wish list for financial gifts this Christmas

More people would prefer to receive a gift card or voucher as a financial gift this Christmas instead of cash or a bank transfer, a survey has found.

But cash was the most desirable financial gift for all age groups under 45, new research from Link Payments found.

A quarter of people would prefer to receive a bank transfer, while more than one in ten would prefer to receive a cheque.

With interest rates higher than last year, 14 percent said they would like the money to go straight into a savings account, while a further 8 percent opted for Premium Bonds.

However, younger generations would prefer to receive cash, with cash being the most popular gift among age groups under 45.

More than half of young people under the age of 25 indicate that they would rather receive cash as a Christmas gift than a bank transfer or voucher.

This age group would also not be against a cheque: 22 percent say they would like a cheque.

Four in five people are considering giving a financial gift this Christmas.

The most popular gift people would give this Christmas is a gift card or voucher. 42 percent of people say they prefer to give, followed by cash, while 36 percent choose to give this. Both come in before a bank transfer at a rate of 16 percent.

While many would love to receive a voucher this Christmas, some will inevitably miss the mark.

They may be intended for a store where the recipient does not shop, or they may simply decide that cash is more useful.

This is Money's Helen Crane warns that some vouchers can come with annoying fine print, such as short expiry dates, restrictions on where they can be used and even charges for keeping money for too long.

Laura Suter, director of personal finance at AJ Bell, says: 'Many gift cards go unused or are lost.

' In theory, the gift card should be replaceable if you lose it and the buyer still has the receipt – but that creates an awkward conversation with the gift giver that many don't want to have.

“And if the store goes out of business, you'll likely have a very limited window to use the gift card before losing the money entirely.

“Overall, they are quite inflexible and not an ideal gift.”

Of those giving cash as a financial gift, the most popular donation amount is between £20 and £50, with a further 17 per cent likely to give between £50 and £100.

Laura Suter says: 'In an increasingly digital world, cash feels a bit old-fashioned, especially for younger people.

'It offers flexibility so children can choose whether to spend or save it, but it can't be used online without transferring it to a bank account first – which can be a hassle for some people. At Christmas you can also easily lose it along with wrapping paper.'

For those who would like to receive Premium Bonds, there is a lot to do as a financial gift.

You can save just £25 and they are government backed so are a safe haven for the piggy bank and you have the added bonus of your child or grandchild being able to become a millionaire with the monthly Premium Bonds prize draw.

Although the expected prize money has improved recently, you still often earn less than a savings account and you cannot win anything from the bonds you buy.

If you choose to put money in a savings account as a gift for a child, you should look for the best possible interest rate and then make a note to revisit the interest rate in a year or two, as banks have a nasty habit . of lowering the interest rate offered and trusting people not to move their money.

Cash rates have been rising lately, so you can make a decent return. But when it comes to longer-term savings, inflation can erode your purchasing power and you may be better off investing.

This means that if the child is young and it will be a long time before he or she needs the money, you should think about investing.

>Read more about the best ways to save for your child's future this Christmas

New research from AJ Bell shows that almost two-thirds of people will give a financial gift this year, whether that's cash, bank transfer, Premium Bonds or gift vouchers.

Laura Suter says: 'For hard-to-buy teenagers, a clumsy aunt or teachers at school, financial gifts can be a good and quick way to give.

'Before you buy that gift voucher or stick a £20 note in a Christmas card, there may be better options for giving the gift of money.

Putting money in a savings or investment account, or purchasing Premium Bonds, may be a better way to give a longer-lasting gift that won't get lost in the bank.”

December 22 will be the busiest ATM day

On average, UK customers typically withdraw around £1.6 billion per week and this year Link expects the busiest day of the year to be Friday, December 22, with an estimated £500 million likely to be withdrawn.

The busiest day for ATMs on the Link network was in 2016, on December 23, when £730 million was withdrawn in one day.

Although more and more people are now paying with their phones or cards, LINK still expects somewhere between £450 million and £500 million to be paid out on Friday, December 22 this year.

Graham Mott, strategy director at Link, said: 'Christmas is always the busiest time for ATMs, with many people withdrawing money for shopping, a round of the pub or as a gift.'