Living expenses - how much in "cash in the bank"?

Prism

We have a large cash buffet to cover emergencies like redundancy and long term illness from work. We work under the assumption that only one of us would be out of work at any given time and therefore the amount is a shared pool. It's currently running at about £150k although some of isn't instantly accessible (1 or 2 year fixed accounts)

Nearly all of our equities and bond investments are wrapped up in pensions and Sipps

Aminatidi

Prism wrote: »

We have a large cash buffet to cover emergencies like redundancy and long term illness from work. We work under the assumption that only one of us would be out of work at any given time and therefore the amount is a shared pool. It's currently running at about £150k although some of isn't instantly accessible (1 or 2 year fixed accounts)

Nearly all of our equities and bond investments are wrapped up in pensions and Sipps

Interesting simply because you've put a number on it and that's a lot of cash not far off my own situation.

How does that compare to the amount invested?

Why so much?

Or is it as simple as it's in wrappers that can't be accessed (even with a loss) in an absolute emergency ?

Prism

A few reasons we have so much. The main one is that my job is pretty much week by week contracts. An economic downturn will likely hit me quite severely - possibly half my salary. Also in our investments we hold no bonds so use fixed cash accounts instead. Dubious really if these count as cash or bonds but we only use 1-3 year stuff at the moment. We might also need to access some of it over the next few years to help with uni living costs.

Novice_investor101

Just worked out my cash emergency fund (in Premium Bonds) is 10 months of living expenses, by which I mean I could stretch it that far for essential bills & food only. It's gone down a bit this month as I spent £500 on my car & £500 to cover a holiday next month.
I pay £120 a month into an easy access savings account to cover annual bills such as TV licence etc, but there's never more than £500 in it due to bills cropping up throughout the year to be paid. I usually end up with about £200 left at the end of the year that I add to my Emergency cash fund to bump it up a bit.

I have a lot more than that in stocks & shares ISA's as holding any more cash that isn't keeping up with inflation seems daft.

I'm fairly luckily in that I get 12 months full sick pay from work, & I'm disciplined enough to save & replace the £1k I've spent this summer over the winter months. I've ratcheted up my favourite hobby this year & buying all the kit has been expensive, but now I'm geared up I can start building up cash reserves again to 12 months essential living expenses once we're into Autumn.

eskbanker

Prism wrote: »

We have a large cash buffet....

Hopefully at tasty interest rates - does it pile on the pounds?

TBC15

Post retirement 3-5 years.

atush

before retirement? 3-12 months depending.

After? A min of 12 months, i am am aiming for 3 years so I can hold more equities in my portfolio.

Your figures will depend on everything you havent yet said.

MaxiRobriguez

About £50 currently.

But I'm not worried about redundancy as my redundancy payout would be £10k+ and I also have ill health cover.

Short term requirements covered by a 0% credit card.

About £150k in investments...

badger09

Currently approx 30% cash, which is far too much. Retired, DB & state pensions cover day to day expenses.

However, I'm not planning on investing more than annual ISA allowance as I'm committed to major spend on expensive holiday to celebrate 'big' birthday early next year:T Travelling long haul while we both still can:o

quirkydeptless

I have 2 years and am still working.


I think of it as 25% emergency fund (easy access) and 75% cash portfolio (fixed term and regular savings)