Following the successful example of Bank of America's 'Keep The Change' savings programme, the UK bank Lloyds TSB has announced a debit card-based programme called 'Save the Change', allowing consumers to accumulate the odd pennies from their debit card purchases in a savings account.
The bank says that the opt-in programme will be launched on 1st February 2007 to help British consumers "get into the savings habit." For each purchase made using the card, the purchase total is rounded up to the nearest pound, and the difference is 'swept' into the cardholder's savings account.
Debit card usage growing
Research conducted recently by the bank revealed that nearly one-third of consumers (29%) are using their debit card more often than they were twelve months ago, and that 36% are using their debit card for smaller purchases.
According to Terri Dial, group executive director of UK Retail Banking for Lloyds TSB, "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."
The bank's research also found that nearly one-quarter (23%) of the population don't have any savings and, of these, nearly one in ten (9%) say they have never saved.
The main reason people gave for not saving is that they never have any money left at the end of the month, cited by over two thirds (69%) of respondents - but nearly half (47%) say that they do put their loose change into a jar or money box. Of those who do collect loose change, nearly one-third (29%) say they haven't emptied their money jar in a year or more, and 3% say they've never emptied it.
Despite many consumers admitting that they struggle to save, the desire is definitely there. More than one-third (34%) say that they wish they had more discipline to save. Over three-quarters (79%) agreed that just a small increase in the amount they could save each month would have a significant benefit over time.
To give savers an extra boost when the scheme goes live, Lloyds TSB says it will match 100% of 'Save the Change' funds accumulated by each customer during February and March 2007. Most Lloyds TSB savings accounts will be eligible for Save the Change, and customers can also nominate another account holder to receive their savings (e.g. a parent can nominate a child's savings account).
While not identical, the new Save the Change programme is similar in concept to Bank of America's Keep the Change programme in the US, launched in late 2005. Within a few months of its launch, more than 2 million Bank of America customers saved a total of over US$60 million in loose change through the programme (see 10 Oct. 2005).