What Is the Monzo 1p Challenge, and How Does It Work?

What is the Monzo 1p Challenge?

At its core, the Monzo 1p Challenge is an automated savings plan available within the Monzo banking app. It is structured around a simple concept: you save 1p on day one, 2p on day two, 3p on day three, increasing the amount by 1p each day for 365 days.

By day 365, you deposit £3.65. Over the full year, the total saved reaches £667.95 (or £671.61 in a leap year).

The challenge is designed to build saving habits gradually. Rather than asking you to set aside a fixed monthly amount, it increases incrementally, making the early months extremely affordable.

To summarise the structure:

The savings are automatically transferred from your Monzo personal account into a dedicated “Challenge Pot”, removing the need for manual transfers.

The objective is not just to save £667.95. It is to build rhythm and financial discipline through incremental growth.

Why is the Monzo 1p Challenge So Popular in the UK Right Now?

The rising cost of living has pushed many UK households to find savings methods that feel achievable rather than overwhelming. Instead of strict budgeting or large monthly deposits, micro-saving approaches are gaining attention, especially the Monzo 1p Challenge using apps like Monzo.

The concept is simple: save 1p on day one, 2p on day two, gradually increasing daily. This slow progression reduces pressure while still building momentum. By the end of the year, users can save £667.95 without drastic lifestyle changes.

Why It’s Popular?

• The rising cost of living pressures are encouraging structured savings.
• Growing trust in digital-first banks like Monzo.
• Increased awareness of behavioural finance strategies.
• The appeal of automation, removing friction from money management

Unlike traditional saving plans that require discipline every month, the Monzo 1p Challenge removes decision fatigue.

As one user described it online:

“I don’t even notice the first few months. It just builds quietly in the background.”

That simplicity makes it appealing, especially for first-time savers. The idea of starting with just one penny lowers psychological resistance. Saving £300 a month feels intimidating. Saving 1p tomorrow does not.

How Does the Monzo 1p Challenge Work Day by Day?

The mechanics of the Monzo 1p Challenge are straightforward but structured.

When you activate the challenge in the Monzo app, the system automatically moves increasing daily amounts from your current account into your Challenge Pot.

Daily Structure

• Day 1: 1p is transferred
• Day 2: 2p is transferred
• Day 3: 3p is transferred
• This pattern continues until
• Day 365: £3.65 is transferred

The challenge runs for 365 consecutive days from your chosen start date. You do not have to begin on 1 January. If you start on 10 March, your challenge will run until 9 March the following year.

The automation removes the need to log in daily or remember to transfer money manually.

What Happens If You Start Mid-Year?

If you begin later in the year, the system simply runs for 365 days from your activation date. There is no penalty for starting in April, July or even November.

The only requirement is maintaining a sufficient balance in your current account to cover the daily transfers.

How Much Money Will You Save With the Monzo 1p Challenge?

The headline figure for the Monzo 1p Challenge is £667.95 over 365 days.

At first glance, saving pennies may seem insignificant. However, the cumulative effect of incremental daily increases is powerful. Many participants are surprised by the final total because the early months feel so light financially.

Mathematically, the total represents the sum of the first 365 positive integers in pence:

1p + 2p + 3p + … + 365p = £667.95

In a leap year (366 days), the total increases slightly to £671.61.

It is important to note that this total excludes interest. If you are on an eligible paid Monzo plan offering interest on your Challenge Pot, your final balance may be slightly higher.

Psychologically, the structure works because the biggest contributions happen later in the year,  after the habit has already formed. By the time you are transferring £3 per day, you have already built momentum.

As one participant explained:

“By December, it looks like a big number. But by then you’re used to it – and seeing £600+ sitting there feels brilliant.”

That psychological momentum is one of the main reasons the challenge remains effective.

What Does the Monthly Budget Look Like Throughout the Year?

Understanding the monthly breakdown is crucial before starting the Monzo 1p Challenge, as contributions increase significantly towards the end of the year.

Here is the standard 1x level monthly saving structure:

January is extremely light, often costing less than a takeaway coffee across the entire month. By contrast, December carries the heaviest contribution at £108.50.

This is one of the most important budgeting considerations. November and December already tend to be expensive months due to festive spending, travel, and social commitments.

If you prefer the heavier contributions earlier in the year, you may consider the reverse challenge, discussed later.

Can You Earn Interest on the Monzo 1p Challenge Savings?

If you have a Monzo Extra, Perks, or Max subscription plan, your Challenge Pot may earn interest, currently advertised at 5% AER (variable).

Interest is paid monthly into the same pot, typically on the 1st of each month, provided the accrued amount is at least 1p.

Below is an estimated interest comparison:

Interest rates are variable and may change in line with market conditions. Therefore, the final amount earned may differ slightly.

Additionally, eligible deposits held with Monzo are protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per person, adding a layer of security to your savings.

Do You Need a Paid Monzo Plan to Join?

To take part in the Monzo 1p Challenge, you need a personal account with Monzo and must meet basic eligibility requirements. Typically, participants must be aged 18 or over and be UK residents to access savings features within the app.

While the concept of the 1p Challenge can be followed manually on any account, automated tools are often linked to Monzo’s paid plans, such as Extra, Perks, or Max. These plans may include scheduled transfers, smart pots, and progress tracking that make the challenge easier to maintain.

However, access rules can change, and occasional promotions may allow free account users to try certain features. It is advisable to check the Monzo app for the latest eligibility details before starting.

How to Enrol in The Monzo 1p Challenge?

Enrolling in the Monzo 1p Challenge takes just a few minutes within the app. Once activated, the process is fully automated, moving increasing daily amounts into a dedicated Savings Pot until you reach £667.95 over 365 days.

To get started:

• Open the Monzo app and go to the Trends tab
• Tap Summary or your Profile/Features section
• Search for “1p Savings Challenge”
• Select or create a Savings Pot
• Tap Join the challenge

From that point, Monzo automatically transfers 1p on day one, 2p on day two, and so on, up to £3.65 on day 365.

You’ll need a Monzo personal account, and the feature is generally available on paid plans (Extra, Perks or Max). You can also pause, withdraw, earn variable interest (5% AER), or choose the reverse challenge if preferred.

What Are The 2x and 4x Challenge Levels?

For savers who feel comfortable with the standard structure and want to build a larger pot within the same 365-day framework, Monzo offers multiplier options. These enhanced tiers follow exactly the same daily incremental pattern as the original Monzo 1p Challenge; the only difference is that each day’s amount is multiplied.

This allows you to scale your savings without changing the underlying rhythm of the challenge.

2x Level

At the 2x level, every daily contribution is doubled. Instead of saving 1p on day one, you save 2p. Instead of £3.65 on day 365, you save £7.30.

• Day 1: 2p
• Day 365: £7.30
• Total after 365 days: £1,335.90

This option effectively doubles your end-of-year savings while keeping the gradual daily increase intact. It can be suitable if your income comfortably supports higher contributions and you want to accelerate progress towards a larger goal, such as a holiday fund or house deposit savings boost.

4x Level

The 4x level increases the intensity further by quadrupling each day’s contribution. The incremental structure remains identical; only the multiplier changes.

• Day 1: 4p
• Day 365: £14.60
• Total after 365 days: £2,671.80

While this can produce a substantial savings pot, it requires careful budgeting. The later months in particular become financially demanding, especially during periods where household spending is already elevated.

Monthly Breakdown for Higher Tiers

Below is a simplified comparison showing how contributions grow at 2x and 4x levels:

The 4x level rises quickly, with monthly savings reaching about £434 by December. Choosing a multiplier requires realistic cash-flow planning.

Flexible switching between 1x, 2x and 4x lets you adjust contributions, helping grow savings while keeping the Monzo 1p Challenge manageable.

Can You Pause, Withdraw or Catch Up If You Miss a Day?

Flexibility is one of the most appealing aspects of the Monzo 1p Challenge.

You can pause daily transfers at any point if your finances become tight. If you miss days due to insufficient balance, you can later add money to catch up and restore your progress. You can also withdraw funds from your Challenge Pot whenever necessary, without penalties.

This flexibility distinguishes it from traditional savings challenges, which rely entirely on manual discipline and often feel rigid.

One Reddit user in the UKPersonalFinance community commented:

“I like that I can pause it if things get tight. It’s not all-or-nothing — that’s what makes it manageable.”

That adaptability allows the challenge to fit around real life rather than forcing you into a strict framework.

Is the Reverse 1p Challenge a Better Option for You?

The reverse 1p Challenge flips the structure. Instead of starting at 1p, you begin at £3.65 and decrease by 1p each day. The total saved remains £667.95.

Some people prefer this method because:

• Larger amounts are saved when motivation is highest (early in the year).
• Contributions become easier over time.
• December payments drop to just 1p per day.

Below is the reverse monthly structure for the standard level:

If end-of-year budgeting is a concern, the reverse structure may align more comfortably with your spending patterns.

Who Is the Monzo 1p Challenge Best Suited For?

The Monzo 1p Challenge is particularly well-suited to individuals who want to build consistency without feeling financial pressure from the outset.

Because the challenge starts with just 1p and increases gradually, it lowers the psychological barrier that often prevents people from beginning to save in the first place.

It is especially suitable for:

• First-time savers building discipline: Small daily amounts make saving easier and less overwhelming at the start.
• People who struggle with lump-sum saving: Break £200–£300 savings into simple daily steps.
• Those creating an emergency fund: Around £667.95 yearly savings can support minor unexpected costs.
• Fans of automated app-based banking: The “set and forget” approach fits digital money routines.

May not suit everyone:

• People with high-interest debt: Paying off debt may offer better financial benefits first.
• Irregular income earners: Increasing daily amounts can be harder to maintain consistently.
• Those worried about late-year costs: Contributions exceed £3 per day near year-end, which may feel restrictive.

Overall, the structure works best when your cash flow is relatively stable and predictable throughout the year.

If your income comfortably supports gradual increases in daily savings, the Monzo 1p Challenge can serve as an effective and disciplined way to build financial momentum.

Is the Monzo 1p Challenge Worth It for UK Savers?

Whether the Monzo 1p Challenge is worth it depends on your financial goals and habits, especially when using tools like Monzo. Its biggest advantage is behavioural: the gradual daily increase makes saving feel manageable, while automation removes the need to remember transfers. Visual progress helps reinforce consistency and motivation.

The challenge is not built for high returns or fast wealth creation. Instead, it works as a structured way to develop saving discipline. Many UK savers use it to build a small emergency fund or cover planned expenses without pressure.

However, if your focus is on clearing debt or saving large amounts quickly, other strategies may be more effective. Ultimately, it supports steady, sustainable financial progress rather than dramatic change.

Final Thoughts on the Monzo 1p Challenge

Understanding what is the Monzo 1p challenge reveals that its success lies in simplicity.

You start with 1p. You build gradually. You end the year with £667.95, potentially more with interest.

The challenge is flexible, automated, and psychologically smart. It fits naturally into digital banking habits and offers structured saving without overwhelming pressure.

For UK savers seeking a manageable way to build momentum, the Monzo 1p Challenge remains one of the most accessible savings tools currently available.

FAQ’S about What Is the Monzo 1p Challenge, and How Does It Work?

Can you run more than one 1p Challenge at the same time?

Yes, you can start a new challenge even if you are completing a previous one, provided your account meets eligibility requirements.

What happens if there isn’t enough money in your account on a transfer day?

If your balance is too low, you can add funds later to catch up and continue the challenge without restarting.

Does taking money out cancel your progress?

No, you can withdraw funds at any time and still continue the challenge as long as you maintain daily contributions.

Is the savings amount fixed or can it change?

The daily increase follows a fixed 1p incremental structure unless you switch to a multiplier level.

Can you stop the challenge before 365 days?

Yes, you can end the challenge at any point without penalties and keep the money saved so far.

Is the savings interest rate guaranteed?

No, the advertised interest rate is variable and may change depending on market conditions and account type.

Do you need to manually transfer money each day?

No, once activated, the app automatically transfers the increasing daily amounts into your designated Pot.