As the new year approaches many of us will be planning our new year’s resolutions for the coming 12 months.

For many of us, improving our savings will be top of that list and financial blogger Skint Dad is encouraging people to take up the penny challenge ahead of the new year.

Based on the 52-week saving challenge the penny challenge is designed to help you save nearly £700 in 365 days without breaking the bank.

The idea behind the challenge is to save an increasing amount of money each day starting from 1p.

By saving a small amount each day people will be able to build on their savings without leaving themselves short for the daily expenditure of modern life.

On the Skint Dad website, it reads: "If you’re desperate to start saving money – for any occasion – but your budget can’t stretch to £1 a week in the 52 week saving challenge, how about trying the Skint Dad 1p saving challenge instead?

“First created at Skint Dad in 2015/2016, this is the original 1p saving challenge.”

How does it work?

The challenge can begin at any point of the year and you will start by putting away one penny on day one and then the equivalent amount in pennies for each day of the year.

Day 1: Save £0.01

Day 2: Save £0.02

Day 3: Save £0.03

Continue to save an extra penny each day as the challenge progresses so:

Day 100: Save £1.00

Day 101: Save £1.01

Day 102: Save £1.02

Keep going...

Day 200: Save £2.00

Day 201: Save £2.01

Day 202: Save £2.02

Until the end of the 12 months...

Day 363: Save £3.63

Day 364: Save £3.64

Day 365: Save £3.65

If you start the challenge on January 1  and you stick to the challenge all year you will have saved £667.95 by the end of 2021.