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The use of cheques fell at its fastest rate ever during 2006, with just under half of consumers no longer using them at all, figures showed.

The number of cheques written has halved during the past 10 years, falling from two billion a year in 1996 to just one billion last year, according to payment body APACS.

The group said only 54% of people wrote a cheque during the year, and only 47% were paid by cheque.

People now write an average of just 1.6 cheques a month, and receive one just once every two months.

Cheques accounted for only one out of every 14 non-cash payments during 2006, compared with one in four in 1996. They now account for just 3% of all non-cash payments made in shops.

But cheques remain popular for some types of payment, with 23% of all cheques written being used to pay bills, while 13% are used to pay other individuals.

Sandra Quinn, director of communications at APACS, said: “Cheque use has really taken a tumble in the past decade as both consumers and businesses have increasingly made the move away from paper and opted for plastic and automated payments instead.

“Despite this we are not yet predicting the death of the cheque.

“Although volumes will continue to fall, we forecast that there will still be around 840 million cheques used in the UK in 2016.”

One in four Britons are failing to save any money into a pension, rising to more than half among young people, research shows.

Around 26% of people are not making any provisions for their retirement, up from 20% last year, according to financial services firm Alliance Trust.

The figure rises to 55% among those aged between 18 to 29, but despite this, young people remain confident that they will still be able to save enough for their retirement.

The situation is worse among women, with 31% of women admitting they are not paying into a pension, something just 26% of men say they are not doing.

Only 35% of people think the state pension will still be around when they retire, down from 49% in 2006, while just 27% of those questioned now belong to a final salary scheme, compared with 30% in 2006.

One in 10 people aged between 30 and 49 admitted they are totally unconfident that they will be able to afford a comfortable retirement, with just 1% of people feeling very confident that they will have enough money.

Hyman Wolanski, head of pensions at Alliance Trust, said: “It is worrying to see that many in the prime of their working lives are most uncomfortable about their retirement prospects.

“It is clear that serious action needs to be taken to tackle the problem to break this trend. Our research shows it is now more important than ever for people to ensure they have a proper pension plan tailored to suit their individual circumstances.”

A Department for Work and Pensions spokesman: “We are concerned that 7 million people aren’t saving enough for retirement. That’s why the Government has proposed reforms which will make it easier for people to save through automatic enrolment into personal accounts, or a qualifying workplace scheme.

“It’s vital that people start planning and saving for retirement early on so that they can maximise their pension pot. Our own research shows young people in particular have a ‘live for today’ approach - they risk having a much lower income in retirement than they expect.”

The number of homes being sold at auction has reached its highest level for more than two years following a rise in repossessions, new figures have shown.

A total of 5,120 homes went under the hammer during the second quarter of the year, 22% more than during the previous three months, according to the Royal Institution of Chartered Surveyors (RICS).

The group said the increase was driven by a rise in repossessions, as homeowners struggled to afford their mortgages following recent interest rate hikes.

It added that the number of homes put up for auction looked set to continue to rise as increasing numbers of properties are repossessed.

RICS is predicting that more than 45,000 homes could be taken back by mortgage lenders during 2008, the equivalent of 124 a day.

RICS economist Oliver Gilmartin said: “With the full impact of interest rate rises in 2007 yet to filter through into higher mortgage costs, we continue to expect a rise in the number of homes going under the hammer into 2008.

“The auction house will continue to be a quick means to foreclose mortgages where properties have been repossessed.

“Encouragingly, the annual growth rate in repossession orders has eased back in 2007, having risen quite sharply during the back end of 2006. However, RICS estimate that repossessions will continue to climb higher into 2008 and could exceed 45,000, a rise of 50% from current annualised rates.”

The North West saw the highest concentration of homes sold at auction during the second quarter, with 826 homes there going under the hammer.

The region saw the biggest quarterly rise in repossession orders six months ago. There were also high levels of auction activity in the South East and home counties, London and the West Midlands. But fewer than 100 homes were sold at auction in Scotland, and levels also remained low in East Anglia.

Pensioners are finding it harder to save money as they are hit by rises in the cost of living, a new survey has shown.

One in four people aged over 65 said they were saving less now than they were three months ago, and nearly half claim this is because they can no longer afford to, according to Sainsbury’s Bank.

A fifth of retired people admit they are not saving anything at all on a regular basis, and just 4% claimed they had been able to increase the amount they set aside during the past three months.

Across all age groups, 25% of people are saving less than they were three months ago and only 14% are saving more.

Peter Wood, head of Sainsbury’s savings, said: “Interest rates have been rising, which is good news for savers but with household expenditure also on the rise, the reality is that many people don’t feel that they can afford to save.”

People in the East Midlands and East Anglia are most likely to be saving less than they were three months ago at 36%, while those in Yorkshire and Humberside are the most likely not to be saving anything at 21%.

At the other end of the scale, one in five people in London and Scotland said they increased the amount they were setting aside during the past three months.

Policymakers are set to keep interest rates at current levels next week after new evidence that households are struggling to keep up with higher mortgage repayments.

Economists predict the Bank of England (BoE) will hold borrowing costs at 5.75% after five rate hikes in a year, although new figures from the BoE have shown that the amount written off by banks in bad debts has surged to nearly £9 billion.

The Bank of England’s figures showed that lenders wrote off £2.3 billion in the second quarter of the year, up from £2.1 billion in the first three months of 2007.

The evidence of consumers struggling with increased debt comes as banks have also been under pressure in recent stock market turbulence.

Investors are fearful over the banking sector’s exposure to increasing default levels from borrowers in the US sub-prime mortgage market, with concerns that higher default rates could spread to the UK.

Royal Bank of Scotland UK economist Geoffrey Dicks said the Bank of England’s Monetary Policy Committee was likely to keep rates at 5.75% at its meeting next week.

Mr Dicks said: “The MPC is extremely unlikely to raise bank rates against a backdrop of highly volatile and fragile financial markets. But there is little hard evidence at this stage to suggest BoE policy easing is imminent.”

Elsewhere, survey data has shown high street sales growing at their lowest levels since November last year as shoppers begin to rein in spending. Retailers surveyed by the CBI business lobby group are less confident over their ability to raise prices as the bank’s rate hikes hit shoppers.

Sales volumes were at their lowest levels for nine months as a strong showing for booksellers driven by the latest Harry Potter novel was more than offset by falls in clothing sales following the UK’s rain-blighted summer.

Official data from the Office for National Statistics showed better-than- expected retail sales in July, but this was largely driven by discounting from retailers ever-more eager to entice shoppers into stores.

UK house price growth has outperformed every eurozone country except Spain during the past five years.

The average cost of a home in the UK soared by 90% between 2001 and 2006, compared with an average rise of just 40% across countries that use the euro, according to Britain’s biggest mortgage lender Halifax.

Spain was the only country where house prices outperformed the UK, with the average cost of a home there doubling during the same period.

France and Ireland also enjoyed strong gains, with the price of property rising by more than 70% in both countries.

But while the majority of countries in the eurozone enjoyed double-digit house price growth during the five years, prices in Germany fell by 5%, while in Austria they edged ahead by just 6% and in Portugal they rose by only 7%.

Despite strong growth in recent years, the UK has only the third most expensive homes in Europe at an average of £187,100.

Ireland has the most expensive property, with the average home costing £209,300, followed by the Netherlands at £190,300. Property is cheapest in Finland at an average of just £92,300, followed by Belgium and France, where homes still cost less than £120,000 on average.

Around 70% of people in the UK now own their own home, fewer than the 82% who do so in Spain, but more than the 45% of people who are homeowners in Germany.

Government plans to make financial education part of the school curriculum have been welcomed by Citizens Advice.

A recent study by the Institute for Public Policy Research claimed that better financial decisions from a young age could save a couple with two children £32,000 by the time they reach 40.

And with finance basics set to be taught to pupils aged between 11 and 16, Citizens Advice has praised the move to provide such information to children.

“We know that a lot of debt problems are caused, at least in part, by a lack of understanding and a lack of confidence in dealing with money matters,” said a spokesperson for the service.

The spokesperson said that there are plenty of ways that children’s interest can be engaged in financial matters and suggested that budget planning should be at the crux of the syllabus.

In another sign of a slowing housing market, Nationwide Building Society reports average house prices up just 0.6% in the month of August, the annual rate of house price inflation fell to 9.6% down from 9.9% in July. A typical UK property cost an average of £183,898 in August, £16,177 more than one year ago.

Fionnuala Earley, Nationwide’s Chief Economist, said, “The expected slowing results from three main factors, each of which have been around for some time. First, weaker affordability, as house prices continue to grow more quickly than earnings; second the effect of higher interest rates and inflation on consumers’ pockets; and third lower house price expectations.

“The US sub-prime crisis has created turmoil in international financial markets, but this is unlikely to have a significant additional effect on the rate of growth of house prices in the UK in the short term. We still expect house price growth in 2007 to come in close to the middle of our forecast range of between 5% and 8%.”

Most city commentators are also expecting a significant slowdown in the housing market.

Commenting on Bank of England figures which show mortgage approvals steady in July, Capital Economics said, “Mortgage demand has been slow to react to the tighter monetary conditions. However, with new buyer enquiries steadily falling and mortgage lenders tightening lending criteria, we do not expect this resilience to last.

“Although mortgage lending remains steady for now, there are good reasons to expect it to slow in the months ahead. Weaker mortgage demand by the end of the year remains our central forecast.”

Separately, investment bank Goldman Sachs notes the planned introduction of Home Information Packs in June resulted in a sharp rise in new instructions ahead of the deadline - a supply distortion to activity that has offset the effect of weaker housing fundamentals.

Other indicators (such as the recent RICS survey) suggest that the housing market is weakening. Goldman Sachs expects housing market activity to fall sharply in early-Autumn as the HIPs distortion fades.

Leeds Building Society has announced the launch of a second issue of its Inflation Buster Bond - the latest deal guaranteed to beat inflation by 3.00%. In addition, any early investment prior to the strike date on October 1st 2007 will receive interest equivalent to the Bank of England Base Rate credited on September 30th.

The return is linked to the Retail Price Index (RPI). Hence, if the RPI in July is 206.10 and the following July is 213.93, then the inflation rate over the period is 3.8%. In this scenario, the bond would pay a return of 6.8%.

If the rate of inflation is 3.8% a year over the term, an investment of £10,000 made on August 30th 2007 will have a pre-tax maturity value of £11,427 after two years. This is made up of £52 for early investment and £1,375 from the RPI inflation rate.

Minimum investment is £1,000, maximum investment £1 million (£2 million for joint accounts).

No capital withdrawals are permitted.

The account can be opened in branches or by post.

New data from Investment, Life & Pensions Moneyfacts shows that ethical investors are being rewarded for following their consciences, with ethical fund returns surging ahead of those on offer from mainstream traditional funds.

The survey examined the performance of ethical funds, conventional non-ethical funds, index trackers and the FTSE 100 over 1, 3, 5 and 10 years.

It found that over a 1 and 3-year period, the average ethical fund has delivered superior returns than both non-ethical funds and the FTSE 100 index. (Source: Lipper Hindsight. % Growth as at July 1st 2007, total return, UK net, no initial charges).

Over the last 12 months the average ethical fund has posted growth of 18.3% compared with 13.7% growth from the average non-ethical fund, 15.7% from index trackers and just 13.2% from the FTSE 100. Ethical funds are also now outstripping non-ethical funds over 3 years with growth of 57.2% compared with 52.3%.

Although over the longer term the non-ethical returns do gradually pull ahead, the margins of victory of around 1% over 5 years and just under 6% over 10 years are relatively small. Worth pointing out too is the amount of ground that ethical funds have made up over the last 12 months, given this time last year non-ethical funds enjoyed an advantage of around 12% over 5 years and almost 19% over 10.

F&C’s long running Stewardship Income fund, for example, is ranked second within the UK Equity Income sector in terms of cumulative performance over one year.

Jupiter Ecology lies sixth within the Global Growth sector out of 167 funds for cumulative returns over 3 years, whilst in the UK All Companies sector, AEGON Ethical Equity is ranked 16th out of 290 over this term.

The Balanced Managed sector sees Henderson Global Care Managed ranked second after 1 year and eighth over 3.