1p Savings Challenge, How It Works and How to Save £667.95 for Christmas 2026
- The Penny Pincher Team
- 6 days ago
- 5 min read
The 1p Savings Challenge, and Why I’m Doing It Properly This Time!
The 1p savings challenge is one of those ideas that sounds almost too simple to work, but it keeps coming back every year because, for a lot of people, it genuinely does.
I know that because I’ve tried it myself. I’ve also learned the hard way what happens when you don’t quite see it through.
I started the challenge in 2025 with good intentions. The money built up, and when summer came around, I dipped into it to help pay for our holiday. At the time, that felt useful. But by December, I was short on cash again, and without that savings pot sitting there, I ended up putting more on my credit cards than I wanted to.
Watching my daughter do the same challenge, but actually stick with it all the way through, really highlighted the difference. She had the money ready for Christmas. I didn’t.
That’s why I’m doing the challenge again this year, and this time I’m completing it properly!
What Is the 1p Savings Challenge?
The idea is simple.
You save one penny more than the day before, every day of the year.
On:
1st January, you save 1p
2nd January, you save 2p
3rd January, you save 3p
You keep going until the final day of December, when you save £3.65.
If you complete the full 365 days, the total saved comes to £667.95.
What makes this work isn’t the maths. It’s the way the saving builds gradually. Early on, the amounts are so small you barely notice them. By the time the numbers get bigger, saving already feels normal.
Do You Have to Start on 1st January?
No, and this is something that puts people off unnecessarily.
You can start the 1p challenge at any point in the year. If you join late, you just add up the amounts you’ve missed and put that in on your first day, then continue as normal.
For example:
Start on 5th January, you’d put in 15p
Start on 20th January, you’d put in £2.10
After that, you simply follow the daily amounts. It doesn’t need to be perfect to be worthwhile.
How People Actually Do the Challenge
Some people like the traditional cash jar, especially if they still use cash or want to get children involved. Being able to see the money build up can be motivating, and it ties in well with teaching kids how to save money in the UK.
Others move the money into a savings account manually using online banking. That works, but remembering to do it every single day is often where people lose momentum.
That’s why a lot of households now automate it instead.
Using Monzo to Automate the 1p Savings Challenge
If you want the lowest-effort version, Monzo runs the 1p savings challenge directly inside its app.
Once you switch it on, Monzo automatically moves the correct amount each day into a separate Challenge Pot. You don’t need to remember what day you’re on, you don’t need cash, and you can pause or stop the challenge if your circumstances change.
For busy households, this often makes the difference between starting the challenge and actually finishing it.
Monzo’s £10,000 Prize Draw (2026)
For the 2026 challenge, Monzo is also running a £10,000 prize draw for eligible participants.
To qualify, you need to:
Have a Monzo personal current account or paid plan
Be aged 18 or over and a UK resident
Start the challenge by 31st January 2026 at 11:59pm
Have at least £667.95 (excluding interest) in your Challenge Pot at the end of the 365 days
The prize draw is optional and separate from the challenge itself. The main benefit is still the money you save, but it’s a nice extra if you’re already using Monzo.
Monzo Referral Bonus (If You’re New to Monzo)
If you don’t already have a Monzo account, you can sign up using my referral link:
In simple terms, this is how it works.
You sign up using the link, add money to your account, then make a card payment. There’s no minimum spend, it can be something small.
Once that’s done, both you and I receive a mystery cash reward, which Monzo reveals after the sign-up is completed.
The reward is random:
Around 94% of people receive £5
Around 5% receive £10
Around 1% receive £20
If the account isn’t fully set up and used within 30 days, no reward is paid.
If you do receive a bonus, you can add it straight into your savings pot if you want to give yourself a small head start.
Why I’m Doing the Challenge Properly This Year
Christmas 2025 was financially tough for us.
I did start the 1p challenge, but I treated the savings as flexible. When summer came around, I used that money to help pay for our holiday. It solved a short-term problem, but it created a bigger one later.
By December, without that savings pot sitting there, I was short on cash and ended up leaning on my credit cards. That’s something I wouldn’t have needed to do if I’d left the challenge alone and let it run its course.
What really brought it home, and me annoyed with myself even more, was seeing my daughter do the same challenge properly. She didn’t dip into it, and by December, she had enough saved to pay for her Christmas presents herself. I'm proud of her for sticking with it!
Thats so motivational for me to do it properly this year! Also, my wife is going to do it as well, which means we'll double the amount we have to spend for Christmas, although we have no intention of spending that much on Christmas!
What I’d Do Differently If I Was Starting Again
The mistake I made wasn’t starting the challenge. It was treating the savings as something I could borrow from.
If I was starting again, I’d do three things differently.
First, I’d decide upfront what the money is for and stick to it. In my case, that’s Christmas. Once the purpose is clear, it’s easier to leave the money alone.
Second, I’d automate it. The less you have to think about saving, the less tempted you are to interfere with it. My wife and I will be using Monzo this year!
And third, I’d remind myself that using the money early doesn’t remove the cost, it just moves it. It felt helpful in summer, but it made December much harder.
If Daily Saving Isn’t for You
If saving something every single day feels irritating rather than helpful, you can still do the challenge monthly and end up with the same £667.95.
You can:
Transfer the monthly equivalents into savings
Or set up a standing order of around £55.66 a month
The method matters far less than choosing something you’ll actually stick to!
What If You Don’t Finish the Challenge?
Then you still save money.
There’s no failure here. Even getting partway through leaves you better off than doing nothing. The challenge isn’t about perfection; it’s about quietly building a buffer that future-you will be glad exists, especially when it means you don't have to worry about finding money to save for Christmas and can avoid using credit cards.
So why do the 1p challenge?
The 1p savings challenge works best when you treat it as money for later, not money you can dip into. Saving small amounts consistently over a year can build a £667.95 buffer that makes December far less stressful, particularly if the saving happens automatically in the background.
Affiliate disclosure
This post contains referral links. If you choose to sign up through them, I may earn a small commission at no extra cost to you. This helps keep the site free and up to date.
