‘I tried Martin Lewis’ Penny Challenge and saved £1,000 for Christmas – it was life-changing’

Christmas can be a tough time financially so making changes to help can be worth giving a go. After years of splashing out more than I could afford over the festive season I decided enough was enough and looked to see if there were things I could do to ease my pain.

After checking out Martin Lewis’ Money Saving Expert site I decided to take on its 1p Savings Challenge – and it truly changed my life. It sets out that by saving an increasing amount daily over a year you would end up with almost £700 – an amount definitely not to be sniffed at.

The challenge is to save 1p on January 1 then increase the amount by 1p a day throughout the year. It means you save 2p on January 2, 3p on January 3 – then continue until you are saving 365p on December 31 (or 366p in a leap year).

What I find best about the challenge is that the most you have to find in a single week is £25.41. And with a few small changes it can be well below that, reports The Mirror.

When I first tried the challenge six years ago I knew I’d have to stick to it perfectly. At the time I was sorting my finances out by using cash as much as possible which made it easy and I enjoyed seeing the coins mount up, even if I did need two money boxes to hold it all.

I have done the challenge for years and the money adds up
(Image: Elaine Blackburne)

By December 31 I had saved £667.95. As the payments were going throughout December I did dip into it early though but had a strict rule it could only be used for Christmas presents.

It was pretty straightforward and it made a big difference to Christmas which was for the first year in ages almost stress-free – well on the money front anyway. I was also lucky to have a NatWest bank account as my local branch has a coin machine which allowed me to pour the contents of my money boxes in and then the balance was paid into my account.

Over the years I became more confident and spotted some tweaks which made it easier than ever – and has even meant saving much more than the original amount. And I found by doing some things slightly differently by this Christmas I had managed to save just over £1,000.

I started by finding ways to cut the cost in what would have been the more expensive weeks at the end of the challenge. I paid for some of those days earlier in the year when the weekly cost was as low as just a few pence.

In January I paid extra to cover some of the days in December. So in the first week of January, I saved the 28p for the first seven days of the challenge plus an extra £3.65 to cover that due on December 31 making a total saved of £3.93.

I carried on doing this during the early part of the year then if I had any spare cash I paid off other days. This included some in August which meant it was cheaper when the schools off and costs rose with a holiday and days out.

I marked off the days with the MSE tracker making sure I stayed on track and didn’t miss any of the basic savings. Incredibly, despite my tweaks, I reached Christmas with the full amount in my account.

Since then I have continued to make slight changes if Ithought it might help. During Covid when people were unable to spend cash I had to change to a mixture of coins and bank transfers and have continued doing the same for the past few years.

I also started to do the challenge from December 1 which avoids higher savings amounts at the end of the year when the bigger bills are coming in. Over the years I have seen the amount I have saved grow every time and 2024 was no different.

The success of the challenge has encouraged me to keep adding spare coins I have to the money box without counting them. This year I saved £704.56 in the bank so achieved the challenge in that way alone.

But I got an unexpected result when I went to take my money to the bank – I had more than £300 between notes and coins. Even keeping £150 as cash to pay for money gifts I still paid in £194.55 taking my total to £1,049.11

The Martin Lewis 1p challenge has been life-changing. Christmas is much less stressful for me and I have worked out the way it works best for me giving me enough money to pay the bills and even have some left over.

The MSE challenge

How the challenge works

You start by saving 1p on January 1. On January 2 you save 2p then 3p on January 3 and then keep doing the same for the full year. So you save what you saved the day before, plus a penny more each day – up to £3.65 saved on the last day of December. If you started on 1 January 2023, then by 31 December 2023 you’ll have saved £667.95.

There are different ways to take the challenge depending on how you like to look after your money. There are different solutions if you are a cash person or prefer a bank transfer.

1. The literal approach – a jar: For those who use cash the challenge is traditionally done by putting loose change into a piggybank or jar every day.

2. The more realistic approach – transfer the cash: Many people don’t use much cash these days making it harder to do the literal method so instead you could manually transfer the money into a savings account via online banking, in small amounts if your bank allows, or monthly amounts.

You need to check first if your bank lets you transfer small amounts – some, including Monzo, will let you build up from 1p each day. This can be either a daily task or you could put away the week or month’s total in one go if you prefer. This is how much you need to save over each month according to MSE.

Alternatively, you can split it equally over 12 months and set up a standing order. If you do this you will 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).