How much should your emergency fund be? A UK guide with examples

An emergency fund exists to keep the essentials paid while your income stops or a big bill lands. So the starting point is your monthly essential spending: the costs you would still have to pay if you cut everything optional. Holidays, takeaways, gym memberships and savings contributions are not included, because you would pause them in an emergency.

Go through your last two or three months of bank statements and add up the following. The budget planner can do the sums for you.

Once you know your essential monthly figure, multiply it by a number of months that reflects your risk. Three months is a sensible floor for most people. Move up the scale for each of these that applies to you:

These examples use illustrative essential costs. Swap in your own figures; the method is what matters.

A couple with two stable incomes can often hold a smaller fund than the figure suggests, because losing one job does not stop all income. A single-income family needs the larger number because there is no backstop. If you are self-employed, keep money set aside for your tax bill separately; it is not part of your emergency fund.

The emergency fund calculator lets you test different monthly costs and timescales.

Before settling on a target, check what else would cover you. Some employees get enhanced sick pay or redundancy pay above the statutory minimum; your contract or staff handbook will say. Income protection insurance can replace part of your income after a waiting period, and a longer waiting period is cheaper if your savings can bridge the gap. If you lost your job, you might be entitled to Universal Credit or New Style Jobseeker's Allowance, but the first Universal Credit payment usually takes about five weeks to arrive.

Bear in mind that for Universal Credit, savings over £6,000 reduce your award and savings over £16,000 mean you cannot claim at all. That is not a reason to avoid saving, but it does mean a large fund is the main safety net rather than a supplement to benefits.

A six-month target of £15,000 or more can feel out of reach. Break it into milestones so you can see progress and so the most likely emergencies are covered first.

If you have expensive debts such as credit cards, many people build stage 1 first, then focus on clearing the debt, then return to stages 2 to 4. On a tight budget, our guide to building an emergency fund on a low income covers smaller first steps. A savings challenge app such as SYM can help by telling you how much to put aside each day and keeping a streak going.

On a tight budget the full target can feel impossible, so start tiny: £10 a week is £520 in a year. If you get Universal Credit and have some earnings, look at Help to Save: you can pay in up to £50 a month and the government adds 50p for every £1 you save, up to £1,200 in bonuses over four years. (Working Tax Credit used to qualify too, but tax credits ended in April 2025.) See our Help to Save eligibility guide.

Selling things you no longer use and sending windfalls such as tax refunds, bonuses or birthday money straight to the fund can get the first stage done faster. One thing not to cut: keep paying enough into your workplace pension to get the full employer contribution.

Keep your emergency fund in an easy-access savings account or easy-access Cash ISA, separate from your current account, with a provider covered by the FSCS (up to £120,000 per person per authorised firm). You want the money available within a day, so avoid fixed-term bonds and investments for this pot. Compare rates on the savings rates tool and see our guide to where to keep your emergency fund.

Before dipping in, ask three questions: is it unexpected, is it urgent, and is it necessary? If the answer to all three is yes, use the fund; that is what it is for.

• Use it for: job loss, illness, essential home repairs such as a boiler or a roof leak, a car you need for work breaking down, emergency travel for a family crisis.
• Do not use it for: Christmas, holidays, a new phone, sales, or planned costs you forgot to save for. A sinking fund for predictable irregular bills keeps your emergency fund intact.

After you use it, make rebuilding it your top priority before restarting other savings goals.

Your target should change when your life does. Recalculate it when you move home, have a child, change jobs, start working for yourself or take on a mortgage. After you use the fund, rebuild it before restarting other savings goals. If you are unsure whether three months is enough, our post on why some people need six months goes into the trade-offs.