How big an emergency fund should I keep

NorthernMonkey1

Hello all. 
A quick question on how big an EF I should keep. Prior to Covid, I've never kept much of an emergency fund, and instead kept savings in in S&S isas, in mixed equities funds, but now there is a mini-monkey in the house, and in light of increased volatility post Covid I've started keeping more of an EF. I'm not planning on changing my savings rate, but instead, changing allocation until I reach the required amount, 
I've no idea how much to keep in an EF, internet recommendations go from £500 to 12 months
Current expenses £1200/month
Cash (actual cash in £20 notes) : £2000
Cash in bank (savings account at 0.1% interest) £3300
Savings in S&S isa £105,000 (ISAs plus share shaves that could take up to a week to liquidise) 
On this basis, is 4 months too much, too little, or about right?

Bravepants

Generally, 3, 6 or 12 months of either necessary spending, or net total monthly salary, depending on your level of peace of mind required.

Robin9

I wouldn't keep £2000 in notes under the bed - put it an one of MSE's bank accounts paying better rates. You should have at least two bank accounts anyway.

eskbanker

There's no right or wrong answer to this as there are too many personal factors to support a one-size-fits-all position, such as job stability, age, health, dependents, attitude to risk, availability of credit, condition of property, etc....

Stubod

..I would aim for 6 months of your "essential" spending costs, eg mortgage costs, utility bills, food...

Prism

Job stability is a big factor. I work for myself and if I can't work for any reason I have zero earnt income. Therefore I try to maintain 2 years of income reserves in cash. However I wouldn't expect everyone to do this.

Anonymous101

Its very personal and does depend on your level of debt appetite for risk etc. Generally I think that any monies invested in cash are a missed opportunity against likely stock market returns. So much so that I think that the opportunity cost can far outweigh any potential losses in the very unlikely event that I have to dip into investments.

With that in mind, for a long time I didn't have any emergency fund. I zero base budgeted and I saved ~50% of my salary into 100% equities funds within my S&S ISA, if something did ever come up I would just reduce savings down for that month.
Recently though I have thought that perhaps it would be wise to have at least some emergency fund in case of redundancy or my employer going bust or introducing pay reductions etc. So in addition to my 3 months employers notice I now keep another 3 months basic costs in cash savings.

Malkytheheed

I used to say 3/4 months costs (thats all bills, everything). 
But since Covid I would say 6months+

Sebo027

Bravepants said:

Generally, 3, 6 or 12 months of either necessary spending, or net total monthly salary, depending on your level of peace of mind required.

I personally keep 12 months in the bank to cover all out goings.

Aminatidi

Prism said:

Job stability is a big factor. I work for myself and if I can't work for any reason I have zero earnt income. Therefore I try to maintain 2 years of income reserves in cash. However I wouldn't expect everyone to do this.

I think job stability plays a large part.
There's also the "sleep at night" factor which is difficult to put a figure on.
I've about £190K invested and similar outgoings to NorthernMonkey1 and I'm sitting on around £70K of cash.
I know that's too much though I haven't quite worked out what to do about it but I also know that personally I wouldn't sleep well if I only had a buffer of 4 months expenditure. 

blue_max_3

There is no real need to keep notes. You can put in an easy access account and earn a little interest. 
Personally, I think it's a very good time to keep easy access funds. I think there will be great investment opportunities in the next few months/years. 
I can see property and the stock market presenting significant buying opportunities that have the potential to be unprecedented in our lifetimes. Nobody really knows though and it may never come to pass. However, I'd want to be in the best position to benefit.
The downside is that cash is likely to be devalued by all the money printing, so you pays your money...