There are several factors to consider when buying a digital camera including price, zoom range, power source and performance. It's also important to work out what you want from your camera: will you also want it to shoot video as well as still images, for example?
Taking these factors in turn, we'll start with price. You can spend as little or as much as you want, but rather than getting what you pay for in terms of image quality, you tend to lose features on budget models. It's possible to get great photos from a sub-£100 camera, but it may be slow to take those pictures.
The sweet spot is around £120. For this you can expect great photos and videos, but not much in the way of manual control. If you want to get creative, manual controls are essential. You can be a little creative without them since most cameras have various colour modes and scene presets, but you won't have control over depth-of-field, for example without an aperture-priority mode.
Spend around £200 on a compact digital camera and you should expect very good photos, a big, high-resolution screen and possibly a longer zoom lens as well. Virtually all compact cameras have a 3x zoom, and start at the 35mm equivalent of roughly 35mm (extending to about 105mm). This isn't wide-angle so you might struggle to fit everyone in the frame in an average-size room. At full zoom (the lens' telephoto position) you'll get closer to the action, but not amazingly close. A standard 3x zoom won't be much use on a safari, for example. For that, you should consider a bridge camera. These are larger than compact cameras and have anything up to 30x zoom lenses. They cost around £250-350.
It's not uncommon to find 14Mp-plus cameras for well under £100, but if you care even remotely about image quality, it's best to avoid high-megapixel sensors. The reason for this is that manufacturers tend to stick with the same size sensor when adding pixels for new models.
Virtually all compacts have a 1/2.3in sensor - that's just 11mm from corner to corner. Cramming 14 million pixels into such a tiny area means less light falls on each receptor than on a 10Mp sensor, for example. In dim light, hardly any light reaches the pixels and, to compensate, the camera increases the sensor's sensitivity (ISO) to boost brightness.
Unfortunately this results in noisy, grainy images. To compensate for this, many cameras apply noise reduction which usually results in smeary-looking photos that lack detail. In short, it's crucial to read our reviews to find out what each camera's image quality is like.
A large 3in LCD screen is useful for composing and reviewing images, but a viewfinder is also useful for use in bright sunlight. The resolution of the screen is important if you want to check focus - the best have almost 1 million dots. Consider a 260,000-dot screen as the minimum.
Most compact cameras have a small optical zoom lens. Don't be persuaded by digital zoom figures as this crops the image, losing detail. If you want a large zoom in a compact body your choice is more limited, but Panasonic's TZ range is a great place to start, offering lenses with 12x or better zooms.
Image stabilisation is important for handheld shooting, especially in low light. This counteracts camera shake to help get crisp images without a tripod. Not all stabilisation systems are effective, though, so check our reviews for guidance.
All compact cameras can shoot video, but quality varies enormously. Some models don't allow zooming during filming and may also fix focus and exposure for the duration. Our reviews explain in detail how capable each cameras is at capturing video.
Make sure you budget for a memory card to record photos and videos. SDXC cards can store up to 64GB of photos and video. Not all cameras support this standard: most will accept an SDHC card, though.