How much cash for house emergency?

sheenas

I would say at least 3months wages is a good starting point.

ZeroSum

One option maybe instead of having a general cash savings, have pots for different things. Also if you want better returns (and yes its over complicating it but its MSE & loads to it) is rinse money through regular savers. Most do offer easy access these days.

poseidon1

I am retired, for the kind of emergency you are referring to I have multiple credit cards up to a total of £78k which I can deploy rather than having to raid the investment 'piggy bank '.

Alternatively my credit rating is such I could instead take out a personal loan (at decent rates) if the enormity of the expense warranted it.

The point is being invested in assets for the long term, access to easy borrowing means not having to access cash I may have tied up in fixed term savings or ISAs delivering valuable tax free income. I also have a mortgage in retirement so not at all aversed to borrowing generally.

In the meantime, £5,000 sits in interest bearing current account whilst a further £5000 in a convenient but linked low interest saving account as a float for discretionary spending.

subjecttocontract

• There are plenty of easy access accounts available at rates of 5%-6% (Spring, Cahoot, Santander).
• Flexible ISAs &/or Premium Bonds will ensure income is tax free whilst allowing easy access.

I've seen amounts ranging from 3 months to 1 year of income as a recommended emergency fund.

Linton

It is not just emergencies that need to be considered when deciding how much cash to hold. I would include any large expenditure likely to occur in the next year or more. For example you don’t want to be forced to pay the balance on an expensive holiday by selling equity at short notice.

Rich1976

we have 12k as a pure emergency fund but we also are saving for next years holiday and home improvements for the following year so in total about 16k in total .

There is also 10k in a fixed rate isa for 2 years which is for more medium term savings .

Some will say it is too much cash but it is what we are comfortable with and don’t want to expose ourselves to too much risk as we pay a good amount into our pensions .

Reg_Smeeton

As a rough rule of thumb I budget for 1% of the property value for home improvements and maintenance per year.

subjecttocontract

https://forums.moneysavingexpert.com/discussion/comment/82142322#Comment_82142322

I doubt many people, myself included, would budget 1%. Your post just confirms the fact that everyone has a different opinion. We all think what we do or how we handle it is right.......but it wouldn't be for others.

masonic

The trouble with basing maintenance costs on home value is the massive variation in property values. I doubt a £400k one bedroom apartment in West London would have four times the maintenance costs as a £100k three bedroom semi in North Yorkshire.

Reg_Smeeton

https://forums.moneysavingexpert.com/discussion/comment/82142372#Comment_82142372

point taken… having owned various properties in the North West I’ve found 1% has worked for me… it seems as good as any other guess on here ;)