MSE Forum poll: Do you keep an emergency fund?

itsthelittlethings

No

I know my mum can just about manage to lend me £1000 if something terrible happened (what?!).

Therefore I have not managed to save an emergency fund.

twopenny

Large(£2k+)

I have no one to support me. Haven't for most of my life so it's always been important.

Not having it could have let me sink into debt and years of trying to break even when life's emergencies come along.

But I was bought up by a grandparent who was a savey business woman in her time and she started me off with saving and budgeting at an early age.

BridgetTheCat

Different funds for different types of emergency.

1. About 2K in easy access savings for unexpected expenses like a car or boiler breakdown
2. About a year’s salary in less accessible savings in case of redundancy

Although since I’m now over 55 and have paid off the mortgage the second one isn’t so much of a threat any longer - my pensions would give me enough to live on if I took early retirement.

kimwp

https://forums.moneysavingexpert.com/discussion/comment/81948203#Comment_81948203

Pretty much the same:

• A year's essential spend in case of job loss plus
• £5k for unexpected white goods/car breakdown, plus if relevant:
• Unexpected expense pot for larger house jobs- eg if having my bathroom done, I'd save a couple of k additionally to the expected cost before starting.

I aim to keep the second two and some of the first in instant access and all three in cash (Vs stocks). It's a mental ring fence though, rather than keeping the money in a specific bank account.

Agree with exodi that the bands are a little off for this forum - I've seen people on here discuss whether 3 or 5 years of cash was better.

HampshireH

Have £6k in emergency in an easy access ISA.

Try not to let it go below £5k as that's what the boiler would cost us.

Glad I saw this as prompted me to review my various saver accounts and interest rates, shuffle my lower balances around and out of non earning pots. Been so lax lately & really need to hit the saving road again. Feels like life is an open cheque book at the moment

Jami74

Odd things Emergency Funds.

That time in our lives when we shopped for yellow sticker foods and buying petrol before payday would put us into overdraft, basically those cash flow problem days, was when an emergency fund would have been a sensible thing to have. But we couldn't afford one. Please don't judge people who don't have one, my lack of one wasn't purely down to overspending.

Now that our income is more than our living costs and money is redirected each month into pensions, savings and ISAs, yeah, I've got an account with £5k in earning interest that I think of as an emergency fund. But in reality if I had a big cost I would find a way to cover it, like a 0% credit card, before using interest earning cash.

Dizzycap

Large(£2k+)

https://forums.moneysavingexpert.com/discussion/comment/81947467#Comment_81947467

I agree with the bands being off, especially in this day and age of costs. I'd say small 1k, medium 5k, and large 10k+. The cost of a good replacement boiler is approx £3-4k and would fit into medium band which is always a good starting point. Although, I suspect that the replacement price will be going up considerably within the next few months.

I've always held a 10k emergency pot in the form of cash for a number of years; although somewhat anemic in today's terms. I also have a large sum available on a credit card and always use it to pay for repairs / replacements and then pay off the full balance before the end of the month so that I have protection against faulty / shoddy goods / workmanship.

tim123456789

Large(£2k+)

I have money in:

1. Long term cash bonds, which I can't access in a hurry.
2. ISAs, which I can, in theory, access within days, but which I can't put back into the tax free wrapper when a bond matures.
3. Premium bonds, which I can access in days, but also I can put back cash into this tax free wrapper when funds are available.

I agree that the levels are too low. I work with a float of more than 2K in my current account. Not to use for emergencies, but so that I don't have to check my balance week by week to make sure that I don't go overdrawn when a slightly larger than normal credit card bill coms in

vacheron

Large(£2k+)

I don't have anything I have called an "emergency fund" or money I have specifically allocated as such, I just have savings and investments, a percentage of which is in instant access bank accounts, savings accounts, cash ISAs, and I also have credit cards and an offset mortgage which offsetting accounts which I can draw from. Added together, these would exceed the figures given by a couple of orders of magnitude.

Based on the figures given, I think the question would be more informative if it was asked purely to those who would otherwise not have any savings already set aside to access in an emergency, with an additional option of "I have other unallocated savings that I could use".

aussie_in_wales

Large(£2k+)

The only specific 'emergency fund' I have is what I pay into a regular saver in lieu of pet insurance for my cat. The insurer's wanted £50/month so instead of lining their pockets I've £150 into regular savers for the last 4 years so he has a little over £7k in case of emergency vet bills.

I have a separate account which I always keep in a return plane fare to Australia in case of family emergencies, this gets reviewed every 6 months or so as ticket prices change and added to if needed.

Other than that ISA's, Premium Bonds and other regular savers for general things which may pop up.