I saved £670 with Martin Lewis’ 1p challenge but don’t make my mistake | Personal Finance | Finance
Oh, how scant a December paycheque can feel. Between gifts for others, ‘treat yourself’ gifts for myself, social outings, and the big food shop, the spending extravaganza that is Christmas leaves my finances in shambles.
It’s not a nice way to start or end the year, which is why the 1p savings challenge seemed a good way to soften the blow. The idea first came to me via Martin Lewis‘ Money Saving Expert newsletter.
The site’s weekly emails are a goldmine of understandable financial advice, tips, and deals. Over time, I’ve saved hundreds of pounds from what I’ve learned about bank switch offers, government schemes, and mobile phone deals that drop into my inbox every Tuesday.
What is the 1p savings challenge?
It’s a simple way to save frequently and often. On the first day, you save 1p, 2p on the second day, and so forth for 365 days. Alternatively, you can flip it round and contribute more at the beginning, starting with £3.65 on the first day, £3.64 the next, down to 1p on the last day of the year.
Either way, you’ll have accumulated a neat sum of £667.95 by the end. It’s a relatively painless route to amass a decent amount of money for an emergency fund, holiday, home deposit or wherever it is your money needs to go.
How I did the 1p savings challenge
2025 marked my second attempt at the challenge and a step up from the first. The issue wasn’t losing a bit of change each day, but remembering to transfer it into my savings account consistently. There were days when I forgot to move the money and lost track of the savings schedule.
To overcome this, I downloaded a challenge tracker PDF from the Money Savings Expert website. I would tick off the days and transfer the daily amount into a savings account – or accumulate several days’ worth when I forgot. It was enough of a faff that I eventually gave up halfway through the year.
Fortunately, the task became much simpler last year.
Monzo, where I already had an account, became the first UK bank to automate the process. The bank will transfer the alotted money every day into what they call a Challenge Pot. You have the flexibility to pause, stop or withdraw money whenever you wish.
However, it’s important to note that a Challenge Pot is not a savings account. Only Monzo members who have subscribed to an Extra, Perks or Max account are eligible to earn 5% interest on a Challenge Pot and also stand a chance to win in monthly £100 prize draws.
These accounts start from £3 a month, which I’m loath to pay. So, occasionally in 2025, I emptied the Challenge Pot into an existing savings account. In hindsight, I would have saved a bit more money if I had done this more frequently.
Final thoughts
Having Monzo automate the process proved very convenient. Although I wasn’t thrilled about £3 or more being deducted from my account daily in December, that’s just how it goes.
Another method of small, frequent savings is through round ups. This automated savings tool, offered by many banks, rounds up purchases to the nearest pound and deposits the spare change into a savings account.
Much like the 1p challenge, it accumulates over time. I opt in for round ups at various banks, but on average, the amount I’ve saved doesn’t quite match the £670.95 total of the challenge. The total round ups from my most frequently used account have only exceeded £400 after a few years.
The 1p challenge is a straightforward way to save, especially if you can automate it. It’s helped ease the strain of planned expenses like Christmas gifts and home repairs that have caught us unawares.
It may not be the most exciting New Year’s resolution, but in 2026, I’m aiming to be better at earning interest on my challenge money.
