Cash - How Much to Keep?

Aminatidi

This old chestnut again.

I have £215K invested.

I have £40K across "instant access" bank accounts paying !!!!!! all.

I have £19K in some NS&I index linked certs.

Stable job (until it isn't) bringing in around £3K/month net.

Outgoings of £1000/month + any discretionary.

How much would you keep in "instant access"?

I've used ISA allowances so if it went into anything it would be PNL/CGT/RICA on the basis that if I needed money unexpectedly quickly I'd risk the hit.

[Deleted User]

I keep 3-4 years spending in cash and premium bonds, however I am in drawdown.
I did have PNL/CGT but they didn't behave in the way I thought they did in March

El_Torro

I would keep between 3 and 6 months of outgoings in cash, invest the rest. 

Is a £6k emergency fund big enough for you? What if you lose your job, and the boiler packs in, and your car needs a big repair? Could you afford it all?

in your situation I would also look at keeping at least some of your cash in Premium Bonds. The return isn’t great but should be better than most cash accounts.

Another_Saver

Keep the index linked certs obviously. The £40k seems a lot... Move £20k into premium bonds and £20k into this year's/next ISA allowance? I'm assuming this is separate from a current account.
Also depends on your mortgage and pension situation.

enthusiasticsaver

Aminatidi said:

This old chestnut again.

I have £215K invested.

I have £40K across "instant access" bank accounts paying !!!!!! all.

I have £19K in some NS&I index linked certs.

Stable job (until it isn't) bringing in around £3K/month net.

Outgoings of £1000/month + any discretionary.

How much would you keep in "instant access"?

I've used ISA allowances so if it went into anything it would be PNL/CGT/RICA on the basis that if I needed money unexpectedly quickly I'd risk the hit.

If you have around £2k discretionary spends each month then I think I would keep maybe £10k - £20k in instant access so move about £20k -  £30k from your instant access accounts into investments and pensions.  Do you live comfortably within that £3k monthly income or are you constantly dipping into  savings? When can you access the N, S and I certificates? 

Aminatidi

enthusiasticsaver said:

If you have around £2k discretionary spends each month then I think I would keep maybe £10k - £20k in instant access so move about £20k -  £30k from your instant access accounts into investments and pensions.  Do you live comfortably within that £3k monthly income or are you constantly dipping into  savings? When can you access the N, S and I certificates? 

Spending is usually £1400/month max so no I'm not dipping into savings the problem is literally having too much cash where I'm investing spare monthly cash but struggle with what bank balance to keep.

It's not a risk level thing I'd happily have almost all of it in "cautious" funds or trusts.

It's literally what level of directly accessible cash in the bank people are comfortable with v cash that takes some time to realise (even notice accounts fall into this category I guess).

coastline

All depends on age for me. If you need a job what are you going to live on ? I'd rather have a decent amount of cash in the background until I had a job I was happy with. That could take a considerable amount of time. No good being unhappy and 250 grand all tied up.
As you get older or retired the " obsession " with money fades and concerns about health and happiness are more important. The state pension plus a bit more should cover the basics for most people. If not then you need to do your calculations again. Millions of people walking the streets are happy with limited money. Everyone's different I suppose.

DireEmblem

The general view on the interweb I believe is that you should have an emergency fund of at least 3-6 months bills sat aside in an easy access account.

I think this can be a bit more personal - to give you peace of mind if you lost your job tomorrow and the company was struggling with funds to pay staff any severance, would you be happy with just 3 months expense runway in an easy access account?

I'm similar to you in that my monthly outgoings are about the £1,000 mark, but by being sensible with what I eat, could reduce I think to about £900.  Any less would be a bit tight.  I have about 3.5 months bills in an easy access account earning 0.75%.  I used to have 6, but when the markets dipped, I invested.  My job is relatively safe I think, and in worst case I have a spare room in my central Edinburgh flat that I could potentially rent out at £500 a month including bills.

Do you have a mortgage by any chance - 40k earning next to nothing is a drag on your portfolio.  How much would your monthly outgoings reduce to if you started to overpay.  Is this worth a thought?

steampowered

The received wisdom is to keep enough in cash to cover 6 months of expenses if you were to lose your job.

6 months of your outgoings = £6,000
Universal credit = about £2,000 over 6 months

Therefore, if you lost your job and could not find another job for 6 months, you would need £4,000 in cash to tide you over. So that's what I would keep in cash.

It's not like money which is invested is inaccessible. You could always sell some of your portfolio if you needed to raise cash for any reason.

Drp8713

steampowered said:

The received wisdom is to keep enough in cash to cover 6 months of expenses if you were to lose your job.

6 months of your outgoings = £6,000
Universal credit = about £2,000 over 6 months

Therefore, if you lost your job and could not find another job for 6 months, you would need £4,000 in cash to tide you over. So that's what I would keep in cash.

It's not like money which is invested is inaccessible. You could always sell some of your portfolio if you needed to raise cash for any reason.

You don't get Universal Credit if you have more than £16k in savings and investments, the poster has 1/4 of a million.

Aminatidi

DireEmblem said:

I think this can be a bit more personal - to give you peace of mind if you lost your job tomorrow and the company was struggling with funds to pay staff any severance, would you be happy with just 3 months expense runway in an easy access account?

If that were to happen the company is part of a larger global company and I've been there a long time so there's an assumption that even if it were statutory redundancy I'd come out of it with the maximum which I think is about £12K so a years living expenses.