Establishing a regular savings plan should be high on the list of your New Year’s financial resolutions.
Spice it up by taking on my ’10 a month’ promise or more drastically: the challenge of not spending.
Start by saving £10 in the first month, then increase by £10 each month: £20 in the second month, £30 in the third, and so on. At the end of the year you’ll end up with £780 plus £20 interest if you get a top fixed rate of 7 per cent.
Get started today and you might have money in time to pay your Christmas credit card bill this time next year.
The no-spending challenge means cutting all non-essential spending in January. List essential expenses, like groceries, utilities, and mortgages for the month, and then ban everything else. You could save hundreds more than you originally thought and also clearly understand how much we waste on non-essential items.
Start by saving £10 in the first month, then increase by £10 each month: £20 in the second month, £30 in the third, and so on. At the end of the year you’ll end up with £780 plus £20 interest if you get a top fixed rate of 7 per cent.
When choosing an account, look at the duration of the plan, whether it is fixed or variable, whether you can change the amount deposited monthly and whether you can use the funds throughout the year. They come with a set of rigid terms and conditions and no two are the same.
Often rates are fixed, so if interest rates fall this year as expected, you won’t suffer. It’s not always obvious whether a rate is fixed or variable, but it will tell you in the summary box, which all providers should have.
Start with your current account provider; Some reserve their best rates for those who save money each month. They generally last for one year and set a maximum savings each month.
Whether you earn 6pc or the top 7pc makes little difference. At 7 per cent, saving £100 a month will give you £1,245 after a year, including £45 interest. In 6 pieces you will see £1,239.
The Principality’s usual one-year savings for Christmas 2025 maxes out at £125 a month. First direct regular savings range from £25 to £300 per month and regular savings for Skipton BS members are up to £250 per month. Everyone pays 7 pc.
Principality is open to anyone, while First Direct is available only to First current account holders and Skipton to its members who have been on it since January 11 last year. You cannot touch your money in these three accounts during the term. With Principality and Skipton, you don’t need to invest money every month, but with First Direct you do.
Co-op Bank Regular Saver, available to current account holders, also pays 7 per cent up to £250 a month, but the rate is variable. Variable rates also come from Nationwide Flex Regular Saver (6.5pc up to £200 per month) and NatWest Digital Regular Saver (6.17pc up to £150 per month). Nationwide allows you three withdrawals a year, while with NatWest and Co-op you can withdraw money whenever you want.
The top rate comes from the BS Principality at 8 percent, but it only lasts six months. You can contribute up to £200 a month and at this level you will have £1,227.53 after six months, including £27.53 interest.