One in four of us have no savings - if you're keen to start putting money away and fancy getting some free money from a bank, this savings account could be for you.
Although we'd all like to have between three and twelve month's income salted away in case of a rainy day, a number of us don't. What's more, the amount in our savings accounts isn't necessarily linked to income, as some of the most well off people I know don't have much in the way of savings at all!
Of course, saving doesn't come easy to a lot of people. Some of us find it incredibly difficult to squirrel even the smallest sum each month - and find ourselves regularly raiding what little we do manage to put away!
Research carried out by Lloyds TSB found that not only do nearly a quarter of us have no savings at all, one in ten have never saved. And the reason why? Two thirds say it's because we don't have any money left over at the end of the month to save. However, nearly half of those asked admitted that they do put their loose change into a jar or money box.
Well, you don't need me to tell you that loose change in a jar is never going to grow - even stashing it in the poorest paying account will make you at least a little interest. And if you are the owner of one of these jars, a new savings scheme set up by Lloyds TSB could be just your thing.
Called Save the Change, it will work by rounding up all of your debit card transactions and putting the surplus into a savings account. Although the individual sums saved will be small, debit cards are our favourite way to pay, so by using our cards instead of cash we could end up stashing away a healthy sum each month without even thinking about it. What's more, if there's not enough money in your current account, the sum won't be rounded up, so you won't go overdrawn.
For example, say James had joined the Save the Change scheme and were to pay for a train ticket costing £11.70 with his Lloyds TSB debit card. His bank would round this up to £12, and place the extra 30p in his savings account. Buy a magazine for £2.50 and another 50p is salted away (with £3 debited from his current account). And some groceries costing £19.85 would add another 15p to his savings account - making a grand total of 95p saved in one day, without him even trying. Lloyds TSB equates the scheme to collecting loose change in a jar, with the obvious additional benefit that that sum will earn interest, too.
Linked Savings Accounts
So the question is - where does this money get saved? Well, it has to be a Lloyds TSB account and you can either choose one in your name, or that of someone else, such as a child. There are a number of accounts included, such as the Guaranteed Tracker, paying 3.65% AER, or the Online Saver, currently paying 4.4% AER, but unfortunately you can't choose an ISA or Child Trust fund.
Double your Money!
What's more, to get things going the bank will match 100% of Save the Change contributions in February and March 2007 - save the maximum £50 with the scheme in each of these months and you could end up with an extra £100 in your account!
Obviously this isn't the best method of saving. The sums we're looking at are very small and although they will add up, unless you make a lot of debit card purchases each day we're still looking at just a few pounds saved every week. Setting up a regular standing order from your current account to a market leader such as the ICICI savings account would mean you could save larger sums which would earn 5.45% AER - almost two percentage points more than Lloyds TSB's Guaranteed Tracker. And although you can earn 4.4% AER with the Online Saver account, you need £250 to open one in the first place - a difficult sum to find, surely, for those that have difficulty saving in the first place!
However, on the plus side, this is a good way for those that struggle to save to put money away. If you're a savings raider, by signing up and forgetting about the scheme you could stash away a pretty decent sum over the space of a year, without even noticing. Those that have always wanted to save a little here and there for their children could find this a great way to build up funds without trying. And although the savings accounts you can save into are not market leaders, there's no reason why you couldn't move the sums you build up to a Child Trust fund or ISA.
What's more, this could give hopeless savers such a sense of satisfaction as they watch how much they've squirreled grow that they become avid savers. Certainly beats putting loose change in a jar!