The NatWest savings challenge can help you build a £780 buffer to cover unexpected expenses or financial emergencies
A back-to-basics savings challenge that starts with just £10 a month could leave households £780 better off by the end of the year – as banks warn millions are still living without a financial safety net. The idea, being promoted by NatWest, is deliberately simple: save £10 in January, £20 in February and keep increasing the amount each month. Stick with it for 12 months and the total adds up to £780.
It comes as lenders and consumer groups grow increasingly concerned that many families, battered by years of rising bills, have yet to rebuild savings run down during the cost-of-living crisis. Despite inflation easing from its recent highs, millions remain one unexpected expense away from turning to credit, with little margin for error if incomes fall or costs rise again.
Households drained cash reserves to cope with soaring energy, food and housing costs and, for many, the habit of saving has yet to return. Although inflation has fallen sharply from double-digit levels and now stands at 3.2%, everyday prices remain painfully high relative to wages, leaving confidence in household finances fragile.
Research repeatedly shows a large share of adults have less than £1,000 put aside – a sum experts say would barely cover a modest financial shock, such as a car repair or emergency bill. Banks have warned that low savings buffers push people towards overdrafts, credit cards and buy-now-pay-later schemes, which can quickly become expensive if balances are not cleared.
How the £780 challenge works
NatWest’s challenge follows a straightforward formula designed to feel achievable for people who have struggled to save consistently.
“Each month, multiply the month number by £10 and add that to your savings,” the bank said.
That means £10 in January, £20 in February and £30 in March, rising steadily through the year. By December, savers will have built up £780. The logic is simple: starting small lowers the psychological barrier to saving, while gradually increasing contributions reflects the reality that many people find it easier to save more later in the year than at the start.
The bank added: “This method gradually gets you into the habit of setting aside a larger amount as the year progresses.”
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With interest rates no longer rising and inflation easing, banks are keen to nudge customers back into saving – even if only small amounts at first. Savings challenges have returned as a way of rebuilding the habit, rather than relying on flashy incentives or short-term bonuses.
Clear, time-limited goals can make saving feel manageable, particularly for those who abandoned it during years of financial strain. Breaking an annual target into monthly steps also helps households plan around regular bills and seasonal spending pressures.
One major obstacle remains that many standard savings accounts still fail to keep pace with inflation. While Bank Rate rose sharply over the past two years, the average easy-access savings account continues to pay far less than the best deals available.
As a result, billions of pounds are sitting in accounts earning little more than 1% or 2%, steadily eroding the real value of savings. Experts repeatedly urge savers to review where their cash is held and move it into higher-paying accounts where possible.
Some regular savings accounts and fixed-rate deals now offer returns above inflation, though these often limit access or monthly deposits.
For those taking on a year-long challenge, choosing the right home for savings can make a noticeable difference, even on modest sums. Easy-access accounts remain popular for flexibility, particularly if the money doubles as an emergency fund – but rates vary widely.
Regular savings accounts can suit those committed to monthly deposits, offering higher interest in return for discipline, though deposit caps mean they often work best alongside another account.
Fixed-rate savings accounts and cash ISAs appeal to savers confident they will not need access, offering certainty and, in some cases, inflation-beating returns. Cash ISAs also protect interest from tax – an increasingly important consideration as rates remain elevated.
