Nationwide has launched a new savings account for those who are struggling to put money away for a rainy day.
The building society's new 'Start to Save' scheme will pay 1% interest and offer £100 in cash prizes to those who can stick to the habit.
Current figures show 11million people across the UK have less than £100 in savings – but from February 18, the account will offer a new way to build an emergency pot.
Start to Save is an online, instant access, regular savings account that pays 1% interest on any money deposited.
Available to all savers across England, Scotland and Wales, the account can be opened via Nationwide’s website and by using the Internet Bank or mobile App with a minimum of a penny.
Savers can pay in up to £100 a month – and get the chance to win £100 through regular prize draws on top of this.
To be entered, savers will need to pay in £50 to £100 per month in the three months leading up to the next draw.
There will be four prize draws beginning on July 21, 2020, then on October 21, 2020, January 22, 2021 and April 23, 2021.
Each draw will offer prizes of £100 – the number of prizes on offer will be dependent on the total amount of money saved in Start to Save accounts for that quarter.
Savers can withdraw funds at any time. However, if any money is taken out during a calendar month, some or all of it may need to be paid back into the account to be entered into the prize draw.
Tom Riley, Nationwide’s director of savings, said: "Millions of people are struggling financially and as a building society we are looking at how we can help them become financially stable.
"By launching Start to Save, we are offering an account for savers to build their nest egg while rewarding those people who are either discovering or rediscovering a savings habit with a prize draw.
"Our experience tells us that rates are not the primary reason why young people and families aren't saving. That is why Start to Save is aimed at those struggling to build a savings buffer of any sort. And even without a prize draw win, £50 per month saved over the two-year period would certainly be a good financial buffer to fall back on."
Nationwide said the new account will be similar to the Government's Help to Save account which launched in 2018 to give 3.5million of those on the lowest incomes a head-start on their savings pot.
"We believe our Start to Save account complements other initiatives, such as Help to Save and PrizeSaver, the government's savings scheme for credit unions, because, together, they reach out to a wide variety of people, all of whom are not saving for various reasons," Riley added.
The prize winnings will not be taxable – the £100 prize will be paid into the account as part of its total balance.
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