MSE Forum poll: Do you keep an emergency fund?

MSE_Stephen

An emergency fund can be a real financial safety net, whether it’s there for a broken boiler, an unexpected bill or a sudden loss of income, but not everyone is in the same position when it comes to building one up.

We’d love to hear how you approach it

Exodi

Large(£2k+)

I think the bands might be off, I suspect most on this forum will be large. Personally I think the bands should be Small <£1k, Medium £1k-£5k, Large £5k+.

I don't think 'Medium' even really covers the cost of a replacement boiler now unfortunately.

El_Torro

Large(£2k+)

You have a point Exodi, though the figures might be based on the median savings that a Brit has. According to a quick search I just did 39% of Brits have less than £1,000 in savings.

The average MSEer probably has a much bigger emergency fund than the average Brit (with each specific MSE sub forum varying wildly as well).

flaneurs_lobster

Does having a credit card with a substantial unused credit limit count?

Or is the definition being used here that of "(near) instantly available cash"?

Exodi

Large(£2k+)

https://forums.moneysavingexpert.com/discussion/comment/81947498#Comment_81947498

I was going to ask but then I guess you can really go down the rabbit hole.

Would premium bonds count as an emergency fund? What about regular savers? Investments? How about cash held in ISA's?

Likewise with credit, does having a credit card count? How about an overdraft facility? What if you didn't have a credit card, but knew you would get approved for one if you needed?

I just interpreted the question as meaning to have a pot of money in an instant access account that is specifically earmarked for emergencies.

flaneurs_lobster

I just interpreted the question as meaning to have a pot of money in an instant access account that is specifically earmarked for emergencies.

"pot of money in an instant access account" - yes

"specifically earmarked for emergencies" - no

DiamondLil

Medium(£500-2k)

https://forums.moneysavingexpert.com/discussion/comment/81947498#Comment_81947498

My credit card acts as the emergency fund for large expenses e.g. new boiler.

I keep a "medium" emergency fund in cash for smaller, unexpected expenses.

Jemma01

Large(£2k+)

I would think a large one would be 10K, if an emergency fund is less than 5K, that's on the lower end. A new boiler is probably 2.5/3K. If god forbid I need a new heat pump (7K?) or a new water cylinder, I don't even know how much that would be.

My emergency fund is currently 3K, which needs to hit 10K, but that's because I'm targeting my purchase debt.

Exodi

Large(£2k+)

https://forums.moneysavingexpert.com/discussion/comment/81947539#Comment_81947539

I think my own definition might be too narrow, as I think my answers would be the same as yours! We have a large pot of money that we use for emergencies, but also to cover other large expenses (e.g. holidays, maintenance, etc), which we top up from our regular savers maturing.

Maybe 'a pot of money in an instant access account that could be used in an emergency' is better?

Ainmhidh

No

https://forums.moneysavingexpert.com/discussion/comment/81947539#Comment_81947539

I interpreted that in the same way - I am fortunate to have some money in an easily accessible account that isn't my monthly spending account, but it isn't certainly isn't earmarked for emergencies.

YorksLass

Large(£2k+)

Mine stands at £3.5k so it would be large on these criteria but I'd class it as medium. It's what I call my Rainy Day fund (easily accessible if needed) and yes, it is for emergencies and/or unexpected bills. Any other expenses eg holidays, decorating etc are budgeted for on an ongoing basis and I also have a credit card I could fall back on if need be.