MARTIN Lewis' MoneySavingExpert has explained how a simple 1p savings challenge could see you bank hundreds in 2023.

The challenge sees you save a penny more each day for a whole year, and you'll end up with nearly £668 if you stick to it.

MoneySavingExpert explained how the savings challenge works in its latest weekly newsletter.

One reader said the 1p challenge helped pay for new carpets.

The reader said: "Our dreamy, soft, marshmallow-like carpets have been laid… I can safely say it was all worth it!"

MoneySavingExpert's Molly Mileham-Chappell said: "The most important element of the challenge is that it gets you thinking about saving and trying to set some money aside, however small, which may have felt harder than normal for some this past year.

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"But it’s pressure-free and on your own time, so you can make the challenge work for you."

Here's how it works – and other challenges to follow too.

How the challenge works

The challenge starts on January 1, where you put aside 1p – the amount you save per day increases by a penny.

So on January 2 you'll save 2p, on January 3 it's 3p, and so on.

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The highest amount you'll save is £3.65 on December 31.

If you don't start on January 1, there's nothing stopping you from starting at any point throughout 2023.

If you start on January 20, for example, you can start by putting aside £2.10 and then carry on with 21p the next day, so you'll finish by December 31.

Or, you can start from 1p at this point and stop by January 19, 2024.

The money you save could be put in a piggy bank or coin jar if you are doing it with cash.

You could also transfer the money through your online banking to put it in a savings account where you could earn interest on top.

Check if your bank lets you transfer small amounts though.

This savings challenge is popular, because it's easier to save by putting aside smaller amounts.

It could be a great option to choose if your budget is stretched from a cost of living crisis.

What other money saving challenges are there?

If the 1p savings challenge doesn't work for you, then there are other ones to follow.

Here's three of the best ones to try.

Bingo challenge – save £1,378 a year

This challenge sees you put aside a certain amount of money each week, and crossing it off on your Bingo board.

You need to find a Bingo card with the numbers from one to 52, and then each week you save one of the amounts.

It's probably best to tick off some of the higher amounts – the biggest one is £52 – on weeks where you have more money, for instance straight after payday.

Weeks where you're more short of funds you can choose some of the lower amounts, which start from just £1 in a week.

If you stick to the challenge and tick of all the boxes, you'll save £1,378 by the end of the year.

Weather savings challenge – potentially hundreds a year

The idea behind the weather savings challenge is that you put aside an amount equal to whatever the highest temperature is that week.

One degree Celsius is equal to £1, so if the temperature reaches 16C that week you'll need to put £16 into savings.

One downside to this challenge is that you'll likely be putting aside the most over summer holiday times, when the weather is better.

That's already a time when parents are strapped for cash while the kids are off school.

But an upside is that you're not saving as much in January, when the weather is cold – and when your finances have taken a battering from Christmas.

The 365 day challenge – save £1,456 a year

You'll put aside a small sum of money each day with the 365 day challenge.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected]

You need to put aside the following amounts each day:

  • Sunday: £1
  • Monday: £2
  • Tuesday: £3
  • Wednesday: £4
  • Thursday: £5
  • Friday: £6
  • Saturday: £7

It means each week, you'll save £28, which over the year, comes to £1,456.

The savings technique is seen as a more realistic saving plan, because you won't have to put aside big chunks of money and the amount you save per week is the same.

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