Savings. We all know we should be doing it, but it’s not always easy. Thankfully, there are a few ways to start building up a nice little nest egg quickly and painlessly.
One way you might’ve heard of is the Save the Change scheme, operated by the Lloyds Banking Group. Let’s take a look at what it is, what it offers savers, and how you can apply for the scheme.
What is ‘Save the Change’?
The ‘Save the Change’ scheme is designed to make saving even easier than ever before.
The concept is simple: Whenever you use your debit card to make purchases, the bank will calculate the cost to the nearest pound and round it up.
So, let’s say you spend £6.45 on your debit card. While you’ll still pay £6.45 at the point of purchase, later your bank will process it as £7 – adding an extra 55p to your bill. That additional 55p is then transferred to your nominated savings account.
There you go. You’ve just saved 55p without having to do anything. This works, whether you spend £2.05 (netting 95p for your chosen account) or £5.99. And you don’t have to worry about your balance either, since Save the Change is only implemented if your account is in credit.
Is it right for me?
When choosing how you save, it’s important to look at your needs. Save the Change is simply a way to help you look after the pennies, rather focus on the pounds.
That means that siigning up for Save the Change isn’t going to be right for you if you already have a lump sum that you’re looking to nurture. In those cases, an ISA or high interest savings account is going to be much more preferable.
As we’ve already noted, Save the Change only works when you buy goods using your debit card. So, if you’re more reliant on cash or prefer not to use cards for anything other than essential purchases, then it’s also not going to right for you.
However, if you use your debit card often, you could easily see decent savings mounting up over months and years. It just won’t happen overnight, since you’re essentially siphoning off the money from your existing balance, rather than adding to it through interest rates.
Handily, though, depending on the savings account you nominate for Save the Change, you’ll still be able to earn interest on the balance. This is a secondary benefit, against the primary benefit of being able to effortlessly save without putting any thought into it
How do I get it?
Setting up your Save the Change account is ridiculously easily. The scheme is run by Lloyds, so that means that if you already bank with Lloyds, TSB and Bank of Scotland then you’re already good to apply. If not, you’ll need to open an account with one of these banks first.
It takes minutes to set up. You’ll just need to ensure you have a separate savings account. You can then nominate this as your Save the Change account, which is where all those extra pennies will be sent.
And now you’re all ready to start saving your pennies.