Dear LPG, 

I know that I am a bit slow, but while watching a Christmas film recently I actually took note of one of the commercials which appeared during the break.

It was a couple of days after Christmas and the advert was about saving a small amount of money on a regular basis throughout the year, so that you are financially prepared when Christmas  present buying time comes around again.

I took a look on line and found that there are now quite a few of these companies springing up, and one of the most well-known spends a couple of months around the Christmas period on a big TV advertising campaign surrounding this.  I understand that many banks also offer accounts that do the same thing and I think that it is a really good concept ,but perhaps it is becoming as commercialised as Christmas itself now that some business companies have got involved.

Ever since I can remember, my mum has run a Christmas club.  It is a simple arrangement and started with the family ,although over the years, friends have now joined too. 

Every week my mum collects some money from each of the members (the average is about £10 but some of the youngsters give as little as £2 a week and others as much as £30.00).   The money used to be deposited into a building society account, but these days she uses a joint bank account (designed to protect the funds if anything happens to her).  She collects all the money, but some of the younger family members now do the actual banking for her, and at the end of November she gives everyone back what they have put in.  Ours doubles as a loan club, where members of the club can borrow amounts on a short-term basis during the year with a little interest involved.  She also collects what is called ‘quarterage’ four times a year (hence the name). 

There is very little interest paid out, but each member of the club gets back the money they have saved and any interest that the bank offers (that amount has shrunk over the years) but, as the companies advertising states,  it does leave you in a position with a little money to start your Christmas plans. 

Over the years quite a few younger people have become involved and though it is an age old concept, the age group of the membership is surprisingly young.  My mother is now in her very late eighties but still is the banker, and perhaps the fact that she has run it for so long makes her trusted to administrate.  She has me primed and ready to take over if she is on holiday or becomes unwell and there are a couple of other family members who are also schooled in her way of running it.

I have no doubt that there are many such schemes throughout the borough, the country and the world where this is a vehicle for people to save, but I note that the rules of one of the bigger companies offering this to people mention percentage penalties for not maintaining your payments. 

With our club if you only get around to paying £3 for the first six weeks you will get £18.00 at the end of the year. 

I think that they are a really good idea, perhaps because I have grown up adding money to one since I first started work in the 1970s, and if you have a mind for maths you could start one for your family.

There are two other big advantages…

As I mentioned, my mother is in her late eighties and still is the administrator of ours, which really does keep her mind active and give her something to do that keeps her grounded.

Our family still works in the old fashioned way.  Our club has been going for so long that we have never really changed our way of getting weekly payments to her.  We have continued to avoid posted payments and direct debits as methods of paying, which means that she regularly sees all the members of the club when they bring their cheques and cash around to her each week or month.  So, it inadvertently serves as a reason to get family members visiting each other, or at least visiting my mum more often. 

The truth is that even if you only save £5.00 per week you will end up with a £260.00 head start when you start next year’s Christmas shopping and perhaps a smaller scale family operation has its advantages. 

SC, Forest Hill

LPG found some interesting information about one of the biggest companies that offer such a service.  And also, a warning about the advantages and disadvantages of saving in this way.

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