1p saving challenge: Savers could amass £667 in less than a year starting with one penny

Martin Lewis compares premium bonds to savings rates

The coronavirus crisis may well be set to rage on into the New Year, but many will no doubt be glad to see the back of 2020 all the same. For some, the festive period and string of bank holidays provides a good opportunity to review this year’s spending, and plan ahead for the next.

Others may be deciding to cut back on splashing the cash next year as a New Year’s Resolution, or perhaps the start of the year always sparks an annual savings spree.

Whatever the reason, many will no doubt be looking to make their money go further in the coming weeks.

Following a particular savings format can suit some, and one of these is known as the 1p saving challenge.

This sees savers gradually increase the amount they set aside each day.

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

It lasts for one year and it could see participants save £667.95.

Beginning on January 1, members of the challenge start with just one pence.

On the second day, they would need to add two pence to their fund.

Come January 3, three pence needs to be put in the pot, while four pennies are added on day four.

The challenge requires the saver to add the same amount as the day before, as well as an extra one pence each day.

As such, on the final day of a 365-day year, they should make a £3.65 contribution.

Clearly, this would rise to £3.66 in a leap year, meaning the grand total would be slightly higher.

At the end of a non-leap year, savers who have stuck to the requirements throughout will end up with a savings pot of £667.95.

There is a reverse version of this challenge, which some may find easier.

Rather than increasing the amount needing to be saved each day, one can instead carry it out backwards – something which may seem easier.

It means kicking off with £3.65 on New Year’s Day, then £3.64 on January 2.

On the final day of the year, just one pence would need to be set aside.

TV money expert Emmanuel Asuquo recently shared his savings tips with Express.co.uk during an exclusive interview.

The financial advisor explained he found “putting barriers in the way” to be an effective tactic.

He said: “I always tell my clients for example, ‘Don’t open your savings account with the same account that you have for your online banking because every time you go on your online banking, guess what, you see your current account, and then you see all this money in your savings account.

“And subconsciously you remind yourself every time you go on your online banking that you have money and you can spend money, and it becomes a pressure that goes on. So I always talk about keeping it separate.”

Source: Read Full Article