Emergency (i.e.) cash fallback fund in retirement

Living_proof · 28 August 2017 at 4:33PM

I have spent today updating my meagre savings and investment figures and three ISA's are expiring within the next couple of weeks. I have been considering where to move them for the best safe return and what I really want to know from those of you who have already retired, is what is a reasonable amount to have in emergency funds in case of: combi boiler needing replaced, fences blowing down, new washing machine, car repairs (saving for replacement will be done separately), etc. etc. Just the normal sorts of things which will, from time to time, go wrong.

I live in a newish house so I am not expecting horrors, and although things tend to go wrong in threes, I might have to replace old with less old, if that makes sense.

Throughout my recent working life I have always had a couple of thousand pounds or so in my current account and have never had a problem, but I don't feel so secure now as the level of income will shortly fall. So I don't want to commit to regular savings at a fantastic rate only to find I need the readies to pay for workmen/replacements, etc. and have to withdraw with a loss of interest.

Any experience on this one please?

lessonlearned · 28 August 2017 at 4:54PM

There are number of current accounts that pay a reasonable rate of interest. See Martins guide. And of course you don't pay penalties if you need quick access to your cash.

As to how much to keep on instant access.....well how long is a piece of string. :rotfl: I would suggest at least £2k but I think that with some of the accounts Martin mentions you can keep a bit more. And of course you can have more than one account.

One other thing I do have is a safe and I always keep some cash in there, usually a couple of hundred. You just never know.

Last week I mislaid my purse, it was returned to me but the cash had gone. The cards were still there but the bank told me to cancel them anyway for safety's sake.

Without cash in the safe then I would have had no ready money, and no debit card to use at the cash point. And I won't get cash on my credit cards and pay interest as a matter of principle. I'm far too mean.

The bank said allow 5 working days for replacement cards but I got them within 36 hours. I was impressed.

.

I am currently looking at moving some of the money in my cash ISAs into stocks and shares ISAs because the rates are so pitiful. My son looks after my other stocks and shares for me and he tells me you can access your money from stock and share isas within about 7 days. I've not doubled checked that yet but he's usually pretty much on the ball.

I recently cashed in my premium bonds, they say allow 2 to 3 weeks but the money was in my account within about 4 days.

Living_proof · 28 August 2017 at 5:11PM

lessonlearned wrote: »

There are number of current accounts that pay a reasonable rate of interest. See Martins guide. And of course you don't pay penalties if you need quick access to your cash.

As to how much to keep on instant access.....well how long is a piece of string. :rotfl: I would suggest at least £2k but I think that with some of the accounts Martin mentions you can keep a bit more. And of course you can have more than one account.

One other thing I do have is a safe and I always keep some cash in there, usually a couple of hundred. You just never know.

Last week I mislaid my purse, it was returned to me but the cash had gone. The cards were still there but the bank told me to cancel them anyway for safety's sake.

Without cash in the safe then I would have had no ready money, and no debit card to use at the cash point. And I won't get cash on my credit cards and pay interest as a matter of principle. I'm far too mean.

The bank said allow 5 working days for replacement cards but I got them within 36 hours. I was impressed. .

I am currently looking at moving some of the money in my cash ISAs into stocks and shares ISAs because the rates are so pitiful. My son looks after my other stocks and shares for me and he tells me you can access your money from stock and share isas within about 7 days. I've not doubled checked that yet but he's usually pretty much on the ball.

I recently cashed in my premium bonds, they say allow 2 to 3 weeks but the money was in my account within about 4 days.

I was thinking £4K LL should suffice. I am tending to keep the existing ISA's in cash but am now drip-feeding a Hargreaves Lansdowne S & S Isa. I have two regular savings accounts paying 5% on small deposits, but every little helps! Furthermore I forget that I have four credit cards, rarely used and always paid off within the interest-free period, but this sort of emergency is absolutely the time to use them and think about how to pay them off later, or rather which savings account to raid!

What has amazed me is how easy it has been to amass quite a little portfolio of savings in just a few years by simply putting the money away and forgetting about it! I am putting it on a spreadsheet now as it's so easy to lose track of what is what....

lessonlearned · 28 August 2017 at 5:43PM

Excellent plan.....£4K should be plenty and as you say credit cards should see you through most emergencies. And you would normally have a few weeks to transfer money to pay them off.

Sounds pretty much like you've got it sussed, unless we've forgotten anything.;)

margaretclare · 28 August 2017 at 6:52PM

lessonlearned wrote: »

There are number of current accounts that pay a reasonable rate of interest. See Martins guide. And of course you don't pay penalties if you need quick access to your cash.

As to how much to keep on instant access.....well how long is a piece of string. :rotfl: I would suggest at least £2k but I think that with some of the accounts Martin mentions you can keep a bit more. And of course you can have more than one account.

One other thing I do have is a safe and I always keep some cash in there, usually a couple of hundred. You just never know.

Last week I mislaid my purse, it was returned to me but the cash had gone. The cards were still there but the bank told me to cancel them anyway for safety's sake.

Without cash in the safe then I would have had no ready money, and no debit card to use at the cash point. And I won't get cash on my credit cards and pay interest as a matter of principle. I'm far too mean.

The bank said allow 5 working days for replacement cards but I got them within 36 hours. I was impressed. .

I am currently looking at moving some of the money in my cash ISAs into stocks and shares ISAs because the rates are so pitiful. My son looks after my other stocks and shares for me and he tells me you can access your money from stock and share isas within about 7 days. I've not doubled checked that yet but he's usually pretty much on the ball.

I recently cashed in my premium bonds, they say allow 2 to 3 weeks but the money was in my account within about 4 days.

Yes, I have a S&S ISA with Hargreaves Lansdown. I've used it like a savings account at times when necessary. You just sell some units so it does take a few days, but it works well.

lessonlearned · 28 August 2017 at 8:04PM

Yes that's what I thought.....let it build up "for when I'm old" :rotfl:

teddysmum · 7 September 2017 at 5:55PM

ISAs pay such a poor rate while you can get better from current accounts and regular savers, most of which are easy access.

There are lots of threads and advice in the savings and banking forums.

I'm retired and my husband should be but is carrying on. We have money in the main current acount to pay for some window repairs and a new kitchen and the rest is in various current and regular saver accounts. We have quite a few Premium bonds which don'tpay a lot,but if you have over £10000 invested you winmost months (It's the fun of the lottery without losing your stake money).

We don't specifically aim at saving,but anything ,beyond kitchen and window money) that stays in the account at the end of the month,is put into one of the accounts or PBs.

There will be a big task in March when the 60+ Bonds mature (taken out just to early to have all three years tax free.)

Living_proof · 18 September 2017 at 5:21PM

teddysmum wrote: »

ISAs pay such a poor rate while you can get better from current accounts and regular savers, most of which are easy access.

There are lots of threads and advice in the savings and banking forums.

I'm retired and my husband should be but is carrying on. We have money in the main current acount to pay for some window repairs and a new kitchen and the rest is in various current and regular saver accounts. We have quite a few Premium bonds which don'tpay a lot,but if you have over £10000 invested you winmost months (It's the fun of the lottery without losing your stake money).

We don't specifically aim at saving,but anything ,beyond kitchen and window money) that stays in the account at the end of the month,is put into one of the accounts or PBs.

There will be a big task in March when the 60+ Bonds mature (taken out just to early to have all three years tax free.)

I am at the stage where chunks of cash Isas have just matured and quite honestly I don't know what to do with the proceeds. I have opened a 1.95% fixed account for a year and have to decide today how much to put in it, and even though the BoE have hinted at interest rises this year I don't think that's a particularly good deal. I will also open a Sipp account as I won't need all my savings at once so could ride out a storm or two. The problem is I just don't have enough to involve an FSA. The whole investment and saving situation has changed so much with the personal £1000 allowance.

pepper77_2 · 23 October 2017 at 4:55PM

Living_proof wrote: »

I have spent today updating my meagre savings and investment figures and three ISA's are expiring within the next couple of weeks. I have been considering where to move them for the best safe return and what I really want to know from those of you who have already retired, is what is a reasonable amount to have in emergency funds in case of: combi boiler needing replaced, fences blowing down, new washing machine, car repairs (saving for replacement will be done separately), etc. etc. Just the normal sorts of things which will, from time to time, go wrong.

I live in a newish house so I am not expecting horrors, and although things tend to go wrong in threes, I might have to replace old with less old, if that makes sense.

Throughout my recent working life I have always had a couple of thousand pounds or so in my current account and have never had a problem, but I don't feel so secure now as the level of income will shortly fall. So I don't want to commit to regular savings at a fantastic rate only to find I need the readies to pay for workmen/replacements, etc. and have to withdraw with a loss of interest.

Any experience on this one please?

When you retire how much will you not spend each month ?
If you are going to spend all of your income every month then I suggest you might need £50k as a buffer. Sounds a lot, but @ 65 you might need a buffer to last 25 years. In that time you might need five boilers for a start.

Keep_pedalling · 23 October 2017 at 11:15PM

Living_proof wrote: »

I was thinking £4K LL should suffice. I am tending to keep the existing ISA's in cash but am now drip-feeding a Hargreaves Lansdowne S & S Isa. I have two regular savings accounts paying 5% on small deposits, but every little helps! Furthermore I forget that I have four credit cards, rarely used and always paid off within the interest-free period, but this sort of emergency is absolutely the time to use them and think about how to pay them off later, or rather which savings account to raid!

What has amazed me is how easy it has been to amass quite a little portfolio of savings in just a few years by simply putting the money away and forgetting about it! I am putting it on a spreadsheet now as it's so easy to lose track of what is what....

Why drip feeding? Cash ISA have been pointless for many years now and are even worse value now that you are allowed to earn £1000 of interest outside an ISA and pay no tax on it. If this is long term savings (10 years +) then shift the lot into well diversified funds in a S&S ISA, otherwise maximise your interest outside the ISA.

Keep_pedalling · 23 October 2017 at 11:17PM

pepper77 wrote: »

When you retire how much will you not spend each month ?
If you are going to spend all of your income every month then I suggest you might need £50k as a buffer. Sounds a lot, but @ 65 you might need a buffer to last 25 years. In that time you might need five boilers for a start.

You must buy rubbish boilers

Emergency (i.e.) cash fallback fund in retirement

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