SYLVIA MORRIS: My savings ruse could help you cover your credit card bills for NEXT Christmas

Setting yourself up with a regular savings plan should be high on the list of your financial New Year resolutions.

Spice it up by taking on my ‘monthly 10’ pledge or more drastically – the no-spend challenge.

Begin by saving £10 in the first month, then increase it by £10 every month – £20 in the second month, £30 in the third, and so on. By the end of the year you will end up with £780 plus £20 interest if you grab a top 7 pc fixed rate.

Start today and you might have money in time to pay off your Christmas credit card bill this time next year.

The no-spend challenge means cutting out all non-essential spending in January. List essential spending such as groceries, utilities and mortgage for the month – then put everything else off-limits. You might save hundreds more than you originally thought, plus gain a clear understanding of how much we waste on non-essentials.

When choosing an account look out for how long the plan lasts, if it’s fixed rate or variable, whether you can change the sum deposited monthly and if you can dip into the funds during the year. They come with a host of rigid terms and conditions and no two are the same.

Often the rates are fixed so if interest rates fall this year as expected, you won’t suffer. It’s not always obvious if a rate is fixed or variable, but it will tell you in the summary box, which all providers must have.

Start with your current account provider – some save their best rates for those putting money aside each month. They typically run for a year and set a maximum you can save each month.

Whether you earn 6 pc or the top 7 pc makes little difference. At 7 pc a £100 a month saving will give you £1,245 after a year, including £45 interest. At 6 pc you’ll see £1,239.

Principality one-year Christmas 2025 regular saver is a maximum £125 a month. First Direct Regular Saver is between £25 and £300 a month and Skipton BS Member Regular Saver is up to £250 a month. All pay 7 pc.

Principality is open to anyone while First Direct is available only to its First current account holders and Skipton to its members who have been with it since January 11 last year. You can’t touch your money in these three accounts during the term. With Principality and Skipton, you don’t have to put money in each month but with First Direct you do.

Co-op Bank Regular Saver, available to its current account holders, also pays 7 pc on up to £250 a month – but the rate is variable. Variable rates also come from Nationwide Flex Regular Saver (6.5 pc on up to £200 a month) and NatWest Digital Regular Saver (6.17 pc up to £150 a month). Nationwide allows you three withdrawals a year while with NatWest and Co-op you can take money out when you want.

The top rate comes from Principality BS at 8 pc but this lasts only six months. You can put in up to £200 a month – and at this level you will have £1,227.53 after six months, including £27.53 interest.