Brits still grappling with the financial wrath of ‘Awful April’ have been urged to start a new money-saving challenge as soon as possible – and you only need 50p to begin
Cash-strapped Brits are being encouraged to start a new savings challenge, allowing them to stash away more than £1,000 in two months. With soaring energy bills, increased council tax, higher road tax, and even a more expensive TV Licence fee – households up and down the nation are struggling more than ever.
In fact, the wrath of ‘Awful April’ has thought to have cost Brits £360 more in bill hikes, something that is set to unravel over the next 12 months. Earlier in May – the Bank of England also announced its decision to cut the base rate (the interest rate that it charges other banks and lenders when they borrow money_ from 4.5 per cent to 4.25 per cent.
The move might have been received by those with a tracker mortgage but may sting those who have managed to put money away in their savings account. Several banks have already confirmed upcoming cuts to their interest rates following the announcement – including Monzo and Ulster Bank.
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However, savings are essential to deal with those unpredicted circumstances life throws at you. If your washing machine breaks, or car fails its MOT – being able to dip into your savings can help alleviate the worry. And sometimes, savings are purely for joy – allowing us to finally book that dream trip during the summer holidays, or to splash out on a new bag we’ve been window shopping for.
In a statement sent to the Mirror, Rajan Lakhani, a personal finance expert over at Plum, recommends starting the 50p challenge. “You might think a 50p challenge won’t do much for your savings, but this savings challenge can easily rack up £1,189.50 in just two months,” he said.
Naturally, to start the challenge you just need to save 50p. Then, each day you need to increase the amount you save by 50p (so, day two would require you to save £1, and day three would be £1.50). Over two months (roughly 60 days) you will have saved £1,189.50 if you don’t miss a single day.
“Obviously, this challenge requires you to put aside a lot of money towards the end,” Rajan added. “But to make this savings goal more attainable, you could take part with your partner (so you can divide the contributions between you) and put funds in a joint account, or even take it in turns to contribute with friends for a joint holiday fund.”
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If you’re looking for a more long-term strategy, it might be worth checking whether you’re eligible for to open a Help to Save Account. Backed by the government, this offers savers a ‘jaw-dropping’ 50 per cent boost – but isn’t available for everyone.
“In a nutshell, you have to be on Universal Credit, working, and have earned at least £1 in the last month,” money-saving guru Martin Lewis explained. “Crucially, that’s the situation you have to be in to open the account – if things change, you can keep the product.” For example, if you match the criteria for a Help To Save account and open one – but then end up coming off Universal Credit or stop earning at least £1 from work, you will not have to close the account.
As previously reported, Help to Save offers Brits to earn a 50p bonus for every £1 they manage to save over four years. However, there are limits on how much you can stash away every month.
“You can save between £1 and £50 each calendar month [but] you do not have to pay money in every month,” GOV UK states. “You can pay money into your Help to Save account by debit card, standing order or bank transfer and can pay in as many times as you like, but the most you can pay in each calendar month is £50.”
If you save the maximum amount every single month, you will have saved £2,400 over four years – plus a generous £1,200 in interest. After four years, your Help to Save account will close, and you will not be able to reopen the account (even if you remain eligible)
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