Monzo customers could have Christmas paid for with the challenge (Image: Getty)
Rising costs of everyday essentials continue to squeeze household budgets, making it harder for people to save for emergencies or future expenses. But one increasingly popular method to build up savings is the 1p Saving Challenge, which can be used by anyone – including customers of banks such as Monzo.
According to the bank’s 1p Saving Challenge blog, it automatically increases daily savings by 1p, starting at 1p on day one, 2p on day two, and rising gradually until reaching £3.65 on day 365. Over the course of a year, this adds up to £667.95.
By late December, people could have saved more than £600 – a figure many may find useful for covering festive costs such as Christmas food and gifts. The challenge is designed to be flexible, with users able to pause at any time or withdraw funds if needed. Savings are held in a separate pot, helping reduce the risk of accidental spending.
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It is worth noting: “If you’ve got a free current account, you can only join our 1p Saving Challenge if you start before 31 January 2026. After that it’s only available for customers with Monzo Extra, Perks or Max.
“If you’re a Monzo Extra, Perks or Max member, you can unlock new challenge levels to save 2x or 4x the amount. Plus, you’ll be entered into monthly £100 prize draws** and earn 5% AER (variable) interest on everything you save as part of the challenge, paid monthly.”
Not a Monzo customer?
Martin Lewis’ Money Saving Expert blog suggests trying the 1p Savings Challenge, where you aim to save £667.95. You don’t need a Monzo account to do it. MSE recommends a few simple alternatives:
- use a jar or piggy bank and add loose change each day
- or transfer small amounts of money into a savings account regularly
It explains: “Manually transfer the cash into a savings account via online banking, in small amounts if your bank allows, or monthly amounts. You’ll need to check first if your bank lets you transfer small amounts, for example, HSBC allows you to build up from 1p each day.
“To do it that way, you’d have to log in to your account every day, which could be quite laborious. So while it might defeat the object of it being a daily challenge, you could put away the month’s total in one go if you prefer.”
It continues: “Alternatively, you could split it equally over 12 months and set up a standing order if you wish. In this case, you’ll need to set aside £55.67 a month (that’s a rounded-up figure for 12 equal instalments, meaning you get an extra 9p during the challenge if you use this method – don’t spend it all at once!).”
From today, you can either:
- add all the money you would have saved since day 1 in one go, or
- just start saving 1p from today onwards.
Either way, you’ll still save money, and every penny counts – even if you don’t reach £600.
You can read up on how to complete the challenge online via the MSE website here. It boasts a helpful money chart and explains how people can adapt to the challenge if they are skint or flush.