A scheme which allows bank customers to save their small change in the 21st century equivalent of a piggy bank has been announced by Lloyds TSB.
Its Save the Change scheme will see participating customers’ debit card purchases rounded up to the nearest full pound, with the accumulated change put into a savings account.
The scheme, which goes live in February, will apply to all debit card transactions. Most Lloyds TSB savings accounts will be able to link into the scheme.
So, for example, a grocery shop of £15.83 would see the participating card holder charged £16.00, with 17p going to the savings account.
Similarly, a train ticket of £11.20 would be rounded up to £12.00, with 80p being set aside.
Lloyds TSB says that nearly a third of people are using their debit card more often than they were 12 months ago and 36 per cent were using cards for smaller purchases.
Terri Dial, Group Executive Director of UK Retail Banking at Lloyds TSB, said: ‘One in three British consumers say they want to save but it can be a real struggle.
‘We want to make it as easy as possible for people to get into the savings habit and the beauty of Save the Change is that it won’t even feel like saving, but at the end of the year customers will have a nice nest egg to build on for the future.’
She added: ‘This is the first scheme of its kind in the UK and it could be the first step towards starting to close the country’s savings gap.’
Lloyds TSB said that for the first two months of the scheme going live it will match every penny of the first £50 being saved in the scheme per month, boosting savings by a potential sum of £100.
Commenting on the ‘Save the Change’ initiative, Emma Bandey from Which? said: ‘Which? welcomes this initiative to encourage saving, but it is a prime example of a bank giving with one hand whilst taking away with the other.
‘Less than a week ago, Lloyds TSB increased its overdraft interest rate by more than the recent base rate rise and its unauthorised overdraft charges are some of the highest on the high street at up to £35 a time. If Lloyds TSB really wants to help its customers save money, it should look at making its charging system fairer.
‘In fact, many people would be better off opening a savings account with a higher rate elsewhere and simply saving the equivalent amount into it regularly. There are several instant access accounts with rates above 5 per cent.’