Spending money is something most people do without thinking about. But what if you could save money without thinking about it either?

This is the aim of automatic savings app Chip . Based in the fintech startup community of Level39 in One Canada Square , Chip analyses the spending patterns of users and moves money not being used into a savings account, building up a chunk of savings over time.

Chip’s co-founder and chief executive, Simon Rabin, said the inspiration for the app came when he realised that, despite having relatively good salaries, he and his friends were finding it impossible to save money.

Simon said: “I realised that saving isn’t an affordability problem. It’s a lifestyle thing, and previous saving methods don’t fit into our lifestyles now.

“Our generation spends money very differently to the way our parents did. I don’t do a weekly food shop where me and my wife plan our meals and budget what we’re spending. It’s more likely that one of us grabs something on the way home each night.

“We spend in a more reactive way, and that means we aren’t able to budget like our parents did. We need a way to save that is just as reactive as the way we spend.”

Chip notifies users every time it makes a saving

He added: “There is a big savings problem in the UK at the moment. It’s a bit of a perfect storm brewing, with really low savings and really high borrowings.

“It’s so easy to spend money. You have contactless, online, one click, Apple Pay. We wanted to make saving money as easy as spending it. There’s no reason it can’t be automatic and simple.”

Since launching in October 2016, Chip already boast tens of thousands of users, particularly those under the age of 40 and living in cities.

The app works by analysing three months of spending data for each user and calculating an average curve of how much they spend each month. It then compares how much they are spending in real terms to that average.

It makes a new calculation every three days and, depending on how much below their average the user is spending, will transfer small amounts of extra cash into a savings account. Users begin with 0% interest on their savings, but gain an extra 1% for each person they recommend, up to a rate of 5%.

Users are notified before any money is moved and can stop or pause the app at any time, or transfer the money back into their current account if needed. But according to Simon, you won’t even notice the money has been saved each time.

Simon Rabin

The team behind Chip are so confident that their algorithm can calculate exactly what users can afford to save they have made a guarantee that if an automatic saving from Chip causes a user to go into their overdraft they will replace the money, pay any bank charges and put £10 in their savings account to say sorry.

It even enables users to save when they are overdrawn, and the team are beginning to roll out ‘Smart Credit’ which will transfer £100 into users accounts just before they hit their overdraft and charge half the amount of APR as the average bank on the repayment.

Simon added: “It doesn’t matter how much you earn or where you are in life - everyone wishes they could save a bit more and then actually have money for the things they want to spend money on, like a holiday or a car or a deposit.

“It’s not about stopping spending. It’s about spending money on the things that matter.”

Chip is free to download for IoS on the App Store and Android on Google Play .

For more information, visit the website .

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