It’s that time of year when our bank accounts take a battering in the run up to Christmas.
But for the money-conscious among us, many will already be thinking of how to save for the next one. Martin Lewis once shared an easy way for people to put away nearly £700 by the end of the year, without hardly noticing.
The 1p savings challenge starts off with small daily amounts and gradually increases over the months until the last day of December when you could have saved an impressive £671.71.
The ITV consumer champion told viewers of his Money Show Live: “Why not do my 1p savings challenge this year, I do it every year, to gain £672. You save a penny on the first of January, 2p on the second, 3p on the third so on and by the last day you’re putting in £3.66 and you’ll have saved £671.71.”
A viewer called Shona emailed the show to share her success of following the one penny challenge.
(Image: (Image: ITV))
She wrote: “Just to let you know this is my second year of doing the penny challenge. I will be banking another £700. I am so chuffed. January 1st 2024 is year three. I am so into this, thank you.”
The ‘1p challenge’ is probably one of the simplest and best-known ways to build your money pot for winter 2025. It’s also a great way to get into the habit of saving every day by starting small and focusing on the end result.
And the best bit is, because the daily savings amount in January 2025 won’t impact your finances too much, you can easily catch up or start at the end of the month instead.
(Image: Getty Images/Image Source)
The only drawback to this savings plan is the amounts increase as the year goes on. It might be worthwhile knowing the amounts due per month and setting the money aside as soon as you get paid.
To start the savings challenge, you just have to put away a penny a day (at first), which gradually grows to pounds as the months roll by so at the end of the year, you will have saved enough money to start 2026 with a few hundred pounds tucked away.
Although the challenge officially starts on New Year’s Day by setting aside 1p, it’s easy to catch up during January due to the small amounts involved – you start by saving 1p, then 2p, then 3p a day – right the way up to £3.66 on the last day of December.
If you follow the schedule, by December 31, 2024 you will have saved a grand total of £671.61.
Follow this penny savings plan:
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Day 1: Put in £0.01
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Day 2: Put in £0.02
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Day 3: Put in £0.03
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Day 4: Put in £0.04
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Day 5: Put in £0.05
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Day 6: Put in £0.06
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Day 7: Put in £0.07
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Day 8: Put in £0.08
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Day 9: Put in £0.09
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Day 10: Put in £0.10
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Day 11: Put in £0.11
From Day 100 add:
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Day 100: Put in £1.00
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Day 101: Put in £1.01
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Day 102: Put in £1.02
Double the amount on day 200:
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Day 200: Put in £2.00
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Day 201: Put in £2.01
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Day 202: Put in £2.02
Continue until day 300, then add:
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Day 300: Put in £3.00
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Day 301: Put in £3.01
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Day 302: Put in £3.02
On the final 366th day, drop in £3.66 and it’s time to cash in your jar. If you have followed the plan throughout the 12 months, you should have saved £671.61 to start off the New Year.
Alternatively, you could reverse the order in which you save, if you have the cash to spare and think that will work better for you. This would mean starting saving £3.66 on January 1, so you will only have to put aside 1p on December 31.
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