This is a pretty painless way to get nearly £700, but I’d do one thing differently
Oh, how my bank account yearns for money in December — and even more so in January. Gifts, for others and ‘why not you deserve it’ variety for myself, nights out, the big Christmas dinner grocery shop, it all adds up to a major spending spree that leaves my finances in tatters.
It’s not a nice way to end or start a year. This dilemma is what drew me to the 1p savings challenge in the first place after finding out about it from Martin Lewis’ Money Saving Expert newsletter.
The site’s dense Tuesday emails are a treasure trove of easily digestible advice, tips and deals. Over the years, I’ve saved hundreds of pounds from the things I’ve learned from it, from bank switch offers and government schemes to mobile phone deals.
What is the 1p savings challenge?
The 1p savings challenge is pretty straightforward. The idea is to save little and often.
On the first day, you save a penny, 2p on the second day, and so on for an entire year. You can also reverse it and pay more at the start, so £3.65 on the first day, £3.64 the next, down to 1p on December 31.
Whichever way you do it, you’ll have saved a tidy £667.95 sum after 365 days. It’s a rather painless way to a good-sized emergency fund, holiday savings, or Christmas budget — whatever it is you need.
How I did the savings challenge
2025 was the second year I did the challenge, which was an improvement on the first. It wasn’t seamless. Saving a few pennies wasn’t a problem, it was remembering to move them into my savings every day. I forgot to transfer the money some days and lost track of what I was supposed to save and when.
As a workaround, I downloaded a challenge tracker PDF from the Money Savings Expert website. I ticked off the days and transferred the daily sum into a savings account – or tallied up several days’ worth when I forgot. It was tedious enough that I ended up with me giving up partway through the year.
Thankfully, it got a lot easier to do last year. Monzo became the first UK bank to automate it and I was already a customer. The bank offers to transfer the money every day into what’s called a Challenge Pot. Plus, you can pause, stop or withdraw money at any time.
But it should be noted a Challenge Pot is not a savings account. Only Monzo members who have paid for an Extra, Perks or Max account are eligible to earn 5% interest on a Challenge Pot — and get entered into monthly £100 prize draws. Their paid accounts start from £3 a month, which I am loath to spend.
So a few times in 2025, I emptied out the Challenge Pot and transferred the money into an existing savings account. I’d have probably saved more money in the long-term if I’d done that more often.
Final thoughts
It was very handy to have Monzo automate the process. At the end of the year, I didn’t love £3 or more leaving my account every day, but that’s just the name of the game.
Another way to save little and often is through round ups. A common tool at many banks, this automated savings option is when purchases are rounded up to the nearest pound and the spare change is deposited into a savings account. Like with the 1p challenge, it adds up.
I boost my savings with round ups at different banks, but on average, the amount I’ve saved doesn’t come close to the challenge’s £670.95 sum. For instance, the total round ups from my most used account have only surpassed £400 after a few years.
The 1p challenge is an easy way to save, especially if you can automate it. It softens the blow of expenses — both planned and unplanned — that crop up in the year. It’s a rather boring New Years resolution, but I’m aiming to be better at gaining interest on my challenge money in 2026.
