How much do you keep in readily access savings/cash access?

masonic

subjecttocontract said:

masonic said:

subjecttocontract said:

We need to acknowledge that we are all different. When I was younger I'd have considered myself in good shape if I had an emergency fund of 1-2k. Others in my circle keep a £30k balance in their current account.....but they can incur big bills on property, cars, travel etc and £30k is a mere drop in their ocean.

Yes, but we should try not to confuse different purposes. If £15k is what you might reasonably turn over in your monthly spending, then typically you would want more in emergency savings. As a rough rule of thumb, this would be 3-6 months expenditure, although what qualifies as monthly expenditure can be flexed when you are a reasonably big spender - what is necessary monthly spending is a matter entirely for you, but it could be considerably less than £15k. In any case, some savings above that £15k would probably be needed if you wanted to avoid being a forced seller of other assets like shares or property should your usual income stream dry up for a few months. One typically wants to earn the best rate available on money that is being saved for emergencies and is not part of one's everyday spending.

But that's your interpretation of the op's question.There is no indication in that question that we are to consider separately monthly spending & emergency funds. There is no confusion on my part as I chose not separate the two. My £15K in Santander meets all of my immediate needs on an instantly available cash basis. Of course I have other accounts which could be accessed but most of those funds are not held for any reason other than the returns that they offer.

The definition of an emergency differs widely depending on circumstances...one may be that they need immediate access to funds. Another's emergency means they can wait a week for the money. 

I'm not suggesting that you should separate the two in your thinking. In fact, based on the OP's question, you should not. But there is thinking about all of your cash savings as one entity, and keeping all of your cash savings in one bank account. The latter will be a sub-optimal solution if there are alternative accounts with higher rates that have ready, but not instant, access.

You've said £15k is for everyday spending and that you do have other cash savings with better returns, so actually there was some confusion created by the previous posts (as it seemed like you were saying this £15k was your only cash). It seems you are already doing what I and others were suggesting. There is no point shuttling money off to another savings account when it's going to be spent within a few weeks anyway. But money that won't be spent ordinarily, and is reserved for emergencies, can be worked a little harder.

I agree completely that emergency cash doesn't all need to be accessible on a particular day. Anything accessible within days up to a few weeks, or even a ladder of fixed term accounts (which I employ), can count towards emergency savings provided your withdrawal rate >= spend rate.

callum9999

DrEskimo said:

IAMIAM said:

Versus putting it in investments/mortgages/pension top ups? Is it worth considering putting more in these on the basis that any emergency I can surely use a 0% card or indeed do additional borrowing on my mortgage fairly quickly (ie a week or two?)

Credit cards can't be used to pay direct debits, and additional borrowing is not that quick. Besides, if the emergency is job loss, it may be difficult to be approved for additional borrowing.

I agree with having 3-6months in household expenditure.

That's irrelevant, you can use the credit card to pay the bills that would have been paid by direct debit (except the mortgage granted unless you swallow the money transfer fee). People also get hung up on the "don't withdraw your investments" mantra unnecessarily - even after the recent crash we had, all my investments are in profit so even if I liquidate them all (except the LISA which is a small proportion of the total investments) I wouldn't have "lost" anything versus keeping it in a savings account.

As a single person who, worst case scenario, is able to live comfortably on universal credit and has never had an issue getting a job offer within a week or so, I guess I wouldn't really need much of an emergency fund at all. That being said, I tend to aim for £5k (more to cover regular long holidays than emergencies) though currently have quite a bit more given the higher savings rate/volatile markets make investing slightly less attractive.

masonic

callum9999 said:

DrEskimo said:

IAMIAM said:

Versus putting it in investments/mortgages/pension top ups? Is it worth considering putting more in these on the basis that any emergency I can surely use a 0% card or indeed do additional borrowing on my mortgage fairly quickly (ie a week or two?)

Credit cards can't be used to pay direct debits, and additional borrowing is not that quick. Besides, if the emergency is job loss, it may be difficult to be approved for additional borrowing.

I agree with having 3-6months in household expenditure.

That's irrelevant, you can use the credit card to pay the bills that would have been paid by direct debit (except the mortgage granted unless you swallow the money transfer fee). People also get hung up on the "don't withdraw your investments" mantra unnecessarily - even after the recent crash we had, all my investments are in profit so even if I liquidate them all (except the LISA which is a small proportion of the total investments) I wouldn't have "lost" anything versus keeping it in a savings account.

As a single person who, worst case scenario, is able to live comfortably on universal credit and has never had an issue getting a job offer within a week or so, I guess I wouldn't really need much of an emergency fund at all. That being said, I tend to aim for £5k (more to cover regular long holidays than emergencies) though currently have quite a bit more given the higher savings rate/volatile markets make investing slightly less attractive.

I'd even argue that one should start drawing down investments if they have been performing well, because the cash buffer is there for when they aren't, and you might be needing it in due course. It's the situation where you have no other option that is undesirable.

ZeroSum

subjecttocontract said:

masonic said:

subjecttocontract said:

We need to acknowledge that we are all different. When I was younger I'd have considered myself in good shape if I had an emergency fund of 1-2k. Others in my circle keep a £30k balance in their current account.....but they can incur big bills on property, cars, travel etc and £30k is a mere drop in their ocean.

Yes, but we should try not to confuse different purposes. If £15k is what you might reasonably turn over in your monthly spending, then typically you would want more in emergency savings. As a rough rule of thumb, this would be 3-6 months expenditure, although what qualifies as monthly expenditure can be flexed when you are a reasonably big spender - what is necessary monthly spending is a matter entirely for you, but it could be considerably less than £15k. In any case, some savings above that £15k would probably be needed if you wanted to avoid being a forced seller of other assets like shares or property should your usual income stream dry up for a few months. One typically wants to earn the best rate available on money that is being saved for emergencies and is not part of one's everyday spending.

But that's your interpretation of the op's question.There is no indication in that question that we are to consider separately monthly spending & emergency funds. There is no confusion on my part as I chose not separate the two. My £15K in Santander meets all of my immediate needs on an instantly available cash basis. Of course I have other accounts which could be accessed but most of those funds are not held for any reason other than the returns that they offer.

The definition of an emergency differs widely depending on circumstances...one may be that they need immediate access to funds. Another's emergency means they can wait a week for the money. 

There's any amount of accounts available that pay a better rate, that would give you 'instant' access to the £15k. What you're doing is literally throwing money away

Type_45

Cash is king.

MichaelAP

I keep a NatWest Current Account float that must have £1000 left at the end of the month.
Anything leftover goes to a standby savings account on a pittance interest (thank you NOT NatWest) titled “Immediates”. This I use for anything out of the blue and allow to grow to £10,000.
Anything above that £10,000 gets shifted around several other Online Banks: ZOPA 7 day & 95 day pots to name but one bank. 

ZeroSum

MichaelAP said:

I keep a NatWest Current Account float that must have £1000 left at the end of the month.
Anything leftover goes to a standby savings account on a pittance interest (thank you NOT NatWest) titled “Immediates”. This I use for anything out of the blue and allow to grow to £10,000.
Anything above that £10,000 gets shifted around several other Online Banks: ZOPA 7 day & 95 day pots to name but one bank. 

Again, like the other posters, why are you keeping £10k with natwest that pays pittance? There's any amount of better options that have instant access via faster payments.

You'd be better off getting a virgin current account, the £1000 float earns 2%, and the £10k in the linked savings earning 1.71%

kaMelo

That's the beauty of holding multiple Virgin's M+ accounts for emergency savings. Instant access, debit card payments, all earning 2% if you don't need it.

Nebulous2

We have not far off £100k in cash or near cash. Most of it in premium bonds. 

There are a variety of reasons for that:- 

We started with twice that over a year ago and had the classic issue we see on here, what do we do with a lump sum?  After consideration we invested half and kept half. That seemed less anxiety-provoking than investing 90% or so. Investments were well up in Dec 21, underwater in June 22 and are now about 6% up with the recent rises, so nothing to make me think we should have invested more. 

I'm in a period between drawing my pension and reaching state pension age and thought expenditure would be higher than income, requiring regular withdrawals. Pleasingly that hasn't happened in the 18 months since I retired, partly because of a part-time job. This is the first month we've withdrawn anything, and even that in my view doesn't count, as I've added considerably more to a SIPP since retiring than we've withdrawn this month. 

We've some vague and unknown plans for house alterations / renovations that could take a fair bit of money, but some of the costs will be shared with another property owner, who so far has been unable or unwilling to commit to the expenditure. Since we would like to do that part of the job first everything else has stalled. 

That's a long way of saying we are way off what many  people here would recommend, but I'm comfortable with where we are at...

MichaelAP

ZeroSum said:

MichaelAP said:

I keep a NatWest Current Account float that must have £1000 left at the end of the month.
Anything leftover goes to a standby savings account on a pittance interest (thank you NOT NatWest) titled “Immediates”. This I use for anything out of the blue and allow to grow to £10,000.
Anything above that £10,000 gets shifted around several other Online Banks: ZOPA 7 day & 95 day pots to name but one bank. 

Again, like the other posters, why are you keeping £10k with natwest that pays pittance? There's any amount of better options that have instant access via faster payments.

You'd be better off getting a virgin current account, the £1000 float earns 2%, and the £10k in the linked savings earning 1.71%

I know it pays a pittance…. I already said that. I also know of other places where that £10,000 is better off; as this is where well over 95% of my savings are already sent.
However, there is a specific reason why I have that £10k in that pittance savings account (again I say thank you NOT NatWest). There is a reason why it is called “Immediates”…. It is used for making large sum payments practically every month, so I don’t need to be recommended where to place it thank you.