SAVERS who put as little as £1 into a credit union savings account could win up to £5,000 a month in a new prize draw.

The Treasury has teamed up with 15 credit unions across the UK – including in Sussex – to launch a new “PrizeSaver” scheme.

Every month will see a top prize of £5,000 awarded to the winning saver, with a further 20 smaller prizes of £20 also awarded.

The first prize draws will take place in mid- December.

The Treasury said the pilot, announced at last year’s Budget, is designed to help improve people’s financial resilience and raise awareness of credit unions.

The exact terms of the savings accounts will vary between credit unions so savers should check with their chosen credit union first.

Asked how the new initiative differs from existing Premium Bonds, which are run by Treasury-backed body NS&I, the Treasury said savers can invest with as little as £1 and these schemes are specifically designed to link people up with their local credit union, which may also potentially be able to offer them other useful financial products.

Premium Bonds by contrast require a minimum investment of £25 - with a £1 million jackpot up for grabs every month.

Credit unions, which are owned and controlled by their members, can offer people cheaper alternatives to some other high street loans - and the maximum interest rate credit unions are allowed to charge generally is capped at 3% a month, while in Northern Ireland the cap is lower, at 1% a month.

Credit unions’ profits are reinvested to meet members’ needs.

The new accounts will be immediately available from 1st Alliance Credit Union, Bradford District Credit Union, Central Liverpool Credit Union, Clockwise Credit Union, East Sussex Credit Union, Merthyr Tydfil Borough Credit Union, Nottingham Credit Union, Riverside Credit Union, South Manchester Credit Union, Westcountry Savings and Loans, Commsave Credit Union, Plane Saver Credit Union and Police Credit Union.

The pilot will run until the end of March 2021 and will be rolled out more widely if it is successful.