Easy 1p challenge will save you £667.95 this year

  • A popular challenge can help you save over £650 this year

  • The so-called 1p challenge, recommended on the MoneySavingExpert forums, involves putting aside a very small amount daily

  • By the end of the year, you'll have accumulated a total of £667.95 which should cover the festive season

  • Read on for a detailed breakdown of how the challenge works and other similar money-saving options

The 1p money saving challenge offers a pain-less way to stash away some cash. (Getty Images)
The 1p money saving challenge offers a pain-less way to stash away some cash. (Getty Images)

If your new year's resolution was to try to save more money this simple challenge is for you.

The method, which is widely recommended on the forums of MoneySavingExpert, involves saving 1p on January 1, then 2p on January 2, and so on, reaching £3.65 on December 31.

By the end of the year the savings should have totted up to to a total of £667.95, which should partially or entirely cover the 2023 festive period,

You don't need to worry if you haven't already started saving, you can simply catch up by adding together the totals of each day you missed – so if you begin on Wednesday 20 January you could add £2.10 on your first day, and then resume the challenge as normal on 21 January, when you'd save 21p.

Read more: 30 ways to save cash: Brits battle cost of living crisis with these top hacks

If you don't like the idea of committing to logging onto online banking to put money away every day, the bods at MoneySavingExperts have suggested some other ways you can still participate and stash the same amount away including working out the amount you'd need to transfer weekly or monthly in order to save the same yearly amount.

Of course you could also take a more literal approach and put actual cash into a piggybank or savings jar.

If you have an account with Monzo you can also transfer increasing amounts automatically into a separate virtual 'pot'. It does this on a daily basis and lets you transfer tiny amounts, using the free web service If This Then That (IFTTT).

Supplied picture of Kate Richards who has shared a simple 1p money saving challenge. (Kate Richards/SWNS)
Kate Richards has shared a simple 1p money saving challenge which pays for all her Christmas presents. (Kate Richards/SWNS)

Kate Richards, 33, a teacher from Huddersfield, West Yorkshire, has used IFTTT to participate in the simple cash-stashing challenge for the last three years.

"You don't notice it [the money] coming out every day," she explains. "The app automatically moves money into your account for you.

“I’ve done it since 2019 and used it every year for Christmas shopping," she continues.

Richards says the app she uses also offers the service to do the saving trick in reverse, starting with £3.65 and going down.

“It links up to the bank and you get a notification each day, you don’t have to think about it. It’s great."

Read more: Savvy mum saves thousands through yellow sticker shopping and funds family trip away

Supplied picture of Richards with her family, son Fred and husband, Ian Richards. (Kate Richards/SWNS)
Richards pictured with her family, son Fred and husband, Ian Richards. (Kate Richards/SWNS)

Effectively, the app triggers an automated action, such as depositing cash from your bank account to your savings and offers various money-saving incentives, including the 1p challenge, like Richards uses.

In order to save further money at Christmas, Richards uses another idea touted by money saving expert Martin Lewis – a secret Santa with her relatives instead of buying each person a gift.

Where she was previously spending £20 per person on seven people, totalling £140, the group of them now have a £50 limit in a secret Santa game where they only have one person to buy for – cutting costs by almost a third.

“It's also more fun as you have to think about one person and what they would really like," she explains.

Watch: How to save money on a low income

The 1p challenge isn't the only way to save some money during the cost of living crisis.

Last year one woman revealed how she managed to stash away thousands by completing surveys and using cashback apps.

Nalan Kaya, 26, from Coventry, West Midlands, scrolls through survey websites and cashback apps as well as exchanging receipts for points in order to save money and earn freebies.

The NHS biomedical assistant sometimes spends less than £30 a month on shopping, including food, thanks to offsetting costs in this way, taking advantage of free samples and purchasing reduced yellow sticker items.

So far, she has earned back more than £5,000 in the space of three years and is hoping to start saving for her first mortgage.

Read more: Mum says buying reduced food items in the supermarket has slashed her bills in half

If you start the 1p challenge today you could have over £650 by the end of the year. (Getty Images)
If you start the 1p challenge today you could have over £650 by the end of the year. (Getty Images)

And back in January another savvy woman shared her smart money-saving shopping tricks, which mean she's managed to stock enough meat to feed her family of four for the rest of the year.

Lindzi Bebbington-Colbourne, 47, from Lincolnshire, saves more than £1,000 buying food close to its use by date.

Having stored the food in her five freezers, she says the bargain buys should last her family until this Christmas.

Read more: Frugal mum shares savvy tips for slashing bills during cost of living crisis

Meanwhile, another thrifty mum revealed back in January that she already had Christmas 2022 all wrapped up – after saving hundreds of pounds on gifts in the sales.

Gemma Chamberlain, 37, from Leicester, saves a fortune buying her presents in the sales.

Not only did she already have all her gifts bought in January, the mum-of-six is so organised she even had them wrapped, ready to be placed underneath the tree, 11 months in advance.

“I have been sale shopping for years," the full-time carer reveals.

“It makes my life so much easier and we have saved a fortune on gifts for the kids for next year.”

As well as saving hundreds of pounds, Chamberlain says sale shopping just after Christmas means she avoids the last minute panic to buy gifts in December.

Additional reporting SWNS.