Emergency fund target.
Target emergency fund
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Still to build
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Your breakdown
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Why the number is months, not a round figure
A common mistake is to fix on a tidy target like ten thousand pounds for an emergency fund. The right size has nothing to do with round numbers and everything to do with your own cost of living. The question that matters is: if your income stopped tomorrow, how many months could the cash carry your essential bills? That is why this calculator builds the target from your monthly essential outgoings multiplied by a number of months chosen to match how secure and predictable your income is.
Be honest about what counts as essential. Rent or mortgage, council tax, utilities, food, insurance, transport to work, and the minimum payments on any debt all belong in the figure. The streaming subscriptions, restaurant meals, and holidays do not, because in a genuine emergency you would cut them. Sizing the fund against bare survival outgoings keeps the target realistic rather than terrifying.
Sizing a six-month buffer from scratch
Take someone with £2,000 a month of essential outgoings who is a salaried employee in stable work, so six months of cover is sensible, and who already has £5,000 set aside. The target is six times £2,000, which is £12,000. With £5,000 banked, they are 42 percent of the way there and have £7,000 still to build.
The progress bar below shows how far along the target this saver is. Filling the remaining £7,000 at, say, £350 a month would close the gap in roughly twenty months.
How many months is right for you
The honest UK guidance is a range, not a single rule. Three to six months suits a dual-income household in secure employment, where one salary can absorb a shock while the other recovers. Six to twelve months is wiser if you are self-employed with lumpy income, the sole earner for a family, or working in a sector prone to sudden layoffs. Mortgage holders should lean towards the upper end, because the consequences of missing a payment are far graver than missing rent. The selector in this tool maps those situations to a sensible number of months so you do not have to guess.
Where should I actually keep it?
The cardinal rule is instant access. An emergency fund that you cannot reach for 90 days is not an emergency fund. Use an easy-access savings account or a cash ISA paying a competitive variable rate. With the personal savings allowance giving basic-rate taxpayers £1,000 of tax-free interest a year, a modest fund usually generates no tax at all, but a cash ISA keeps it tidy if you are a higher earner whose allowance is only £500 or zero. Avoid locking the money in a fixed-term bond, and never invest your emergency fund in the stock market, because the moment you need it could be exactly when markets have fallen.
Should I build the fund before clearing debt?
Build a small starter buffer first, perhaps one month of outgoings, so a surprise bill does not push you back onto a credit card. Then throw spare cash at expensive debt such as credit cards or overdrafts, where the interest rate dwarfs anything a savings account pays. Once the costly debt is gone, return to building the full fund. Carrying 24 percent credit card debt while hoarding cash at 4 percent is a slow leak worth plugging.