What are you doing to build an 'emergency fund'?

The current news about the spread and impact of Covid-19, as well as the damage from climate change and more severe weather in the UK, makes thinking about our ability to cope with dramatic changes in our daily lives even more pressing.

The general advice is that we should each try to build an ‘emergency fund’ (or ‘nest egg’ if you are feeling more confident) that is roughly equal to 3 months of your basic expenses. The idea is that should you be unable to work, or need to pay urgent unexpected bills, then you have some cash to draw upon without needing to arrange credit.

To be useful it needs to be easy and quick to access, but also safe - and ideally not be losing value.

The point of this fund is that it is separate from the money you are investing for the future, and should not be earmarked for specific projects - this is for emergencies.

It is not easy to build such a fund, and may take some time, so the earlier you start, the better.

I’m curious (this won’t be scientific research, only for conversation) about how this community approaches this.

  • I have no specific emergency savings
  • I have started to save, but am far from my goal
  • I am saving, and confident I will have this amount soon
  • I already have a fund, and am now saving and investing for other goals
  • I don’t feel I need this fund. I use my savings in other ways as there will be other options if I ever need them

0 voters

For those who have, or are building, their emergency fund, where do you keep it?
(if it is cash under a mattress, please don’t mention this!)

How did you feel when you realised you had achieved this target?

It feels strange to think back as far as March and the beginning of the lockdown when these questions were only just starting to seem relevant.

I was just thinking about this issue again and remembered this poll. So (with a small number of votes) we had 90% who were confident of having or achieving their emergency fund. That’s pretty impressive, but maybe a sign of the confident Dozens customer.

All my adult life I’ve heard people tell me of the need to have such a fund, but rarely has this been more clearly demonstrated to us all than it is with our current crisis.

Many of us here seem convinced, but it was certainly not common in the UK. Do you think attitudes to having such a fund in future (once we get back to some kind of normal operation)? Will we save more just in case, or will we spend because we can?

There certainly will not be a shortage of businesses clamouring for our cash, and there’s certainly a need for jobs, but how will we balance looking after ourselves and looking after our communities?

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The psychology behind an emergency fund is interesting. If you have one, that’s a good first step, but when do you use it? It’s worth deciding the conditions to trigger using it, which can also actually help decide how much you want to put aside.


That’s a really great point. I have one, and I think I feel I will know when I need it, if that makes sense.

I guess the obvious one would be the unfortunate loss of a job


I think the risk is actually that you leave it too late, holding on to it to the point where it’s no longer going to help.

Not sure you can leave it too late (unless you have built up unaffordable debt in the interim I guess), but using it too early, when there might be other options, or economies you can make, could be an issue.

There’s not much point having too much held in this way ‘just in case’ if it will be losing value over time by not keeping up with inflation. On the other hand, too little in the pot will mean it doesn’t last long enough to get you back on your feet.

I think the point about working out your likely ‘triggers’ is a very good one, @Gaoler

What do you think this might involve?

I don’t have an emergency fund, I save regularly, however this has shown me that maybe I needed to branch out, expand, look at protecting my money elsewhere, so I opened a monthly saver with both Lloyds and Virgin Money, only 2% interest, but it’s only £250 a month in each, but will mean I will have saved an extra £6k a year.

I’m lucky this covid-19 didn’t affect me at all, in fact in increased my workload.

However there may be a time I’m not so lucky in the future, and I don’t want to be caught out.

At the end of the year I will invest that £6k somewhere as a lump sum, and start it all over again.


I find it fascinating how attitudes towards financial security differ between countries. Our attitudes in the UK are very different from those in most other European countries. But even within Europe, there are noticeable differences between Northern/Southern Europe and Eastern/Western Europe.
In the UK, there is little to encourage people to save. In fact, quite the opposite. Most recently, people with a modest emergency fund have been excluded from claiming UC, etc to help them through the COVID19 crisis because of the so-called “savings limit”. The way modest savings earn interest and their taxation treatment needs to change. People should be able to set aside money in an inflation-proofed emergency fund that is disregarded for taxation / benefits purposes. (Bear in mind that an ISA will give you the taxation protection but has to be declared on benefit claims).


What about Lifetime ISAs? They are a pretty generous encouragement to save, and tax free. They are in most cases poor pension replacements, but if you’re saving for a 1st home they’re great.

I’m sure there are a lot of people out there forced to live of these savings (and feel home ownership slipping into the distance) right now, which must be miserable.

Since Covid hit you can now withdraw money and only lose the government top-up amount (previously you’d loose 25% of the withdrawn amount, so in effect 6.25% of your money was taken on top of it).

If they kept that system, it would at least be a tax-free way of saving an emergency fund - eg to pay the mortgage if circumstances force you onto UC.

While its tempting to think ‘I won’t save anything, UC will cover me for Covid-21!’ that doesn’t help a lot of people. UC doesn’t pay your mortgage (just loans you the interest, and you have to wait a few months for that…). Since you are assessed as a household, if your partner is still working you may not be eligible either. If it needs both of your incomes to pay the mortgage and eat, better have some emergency fund, even if its getting very little interest…

Speaking of emergency savings vehicles… If only some bank somewhere offered nice 5% interest bonds you could sell back whenever you wanted :slight_smile:.