How much should I have in emergency savings?
One in five have less than £1,000 in emergency savings, leaving them vulnerable to unexpected costs. How much should you have in your rainy day fund?
A rainy day fund provides a crucial fallback if you lose your job, need to cover a medical bill or urgent car repairs, but one in five Brits has less than £1,000 stashed away for emergencies.
So, how much should you hold in an emergency savings pot? Should your emergency fund be separate to money held for other savings goals? And which are the best savings accounts to keep your emergency fund in?
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Those in later life need more, as they generally have lower earnings – retirees need a pot big enough to cover one to three years’ worth of essential spending.
How much should I have in emergency savings?
According to MoneySuperMarket's Monthly Household Money Index, the average monthly household spend is £1,455 for February 2026. But according to latest available data from the Office for National Statistics (ONS), weekly household spend for the financial year ending 2024 was around £623, equating to £2,492 a month.
Based on these figures, savers should aim to have the following amounts in their emergency pots:
Period of essentials to cover | Amount of savings you need |
Three months | £7,476 |
Six months | £14,952 |
One year | £29,904 |
Three years | £89,712 |
Investment platform AJ Bell suggests plenty of Brits are nowhere near these figures.
According the platform, one in five (19%) have less than £1,000 saved in an emergency cash pot.
Younger people are worse at having a rainy day fund than older people – 21% of over-55s have £20,000 or more nestled away, while 37% of 18 to 34-year-olds have less than £2,000 in emergency savings.
Laura Suter, director of personal finance at AJ Bell, says: “The most important thing people can do is start saving as early as possible, even if it’s just a small amount of money.”
Separate figures from the Financial Conduct Authority (FCA) paint a bleaker picture.
The City regulator’s most recent Financial Lives survey revealed one in 10 people have no cash savings at all, while another 21% have less than £1,000 to draw on.
One in four people in the UK are classed as having ‘low financial resilience’, meaning they’ve missed payments, are struggling to keep up with payments or have no savings.
How to calculate your specific requirements
The above figures are just a ballpark guide. Your specific requirements will vary depending on your lifestyle. To arrive at a more customised figure, look at your bank statements and work out how much you spend on essentials in the average month. This could include:
- Housing costs (mortgage payments, rental costs, home insurance, service charge)
- Council tax
- Energy bill
- Water bill
- Internet bill
- Phone bill
- Car insurance
- Food costs
- Transport costs (petrol, train tickets)
If you have people who are financially dependent on you, you should factor their costs in too. Again, your requirements will vary considerably depending on your lifestyle. For example, those with children in private school may wish to consider what a shock redundancy could mean for their child’s education. If you want your emergency pot to cover something like school fees, it will need to be considerably bigger.
When to use an emergency fund
An emergency fund is just that – for emergencies. However tempting it might be to dip into it to fund a holiday or a new purchase, it is a bad idea. The pot should be kept for shock life events like redundancies, car breakdowns or unexpected home repairs that need immediate attention.
It's also important to note that a credit card is not for emergencies, this is debt you still need to pay – and can come at a high costs when you miss payments,
If you are making a big purchase like buying a house, don’t be tempted to use your emergency pot to boost your deposit. Often, big life events like this come with unexpected costs – for example a boiler that suddenly needs replacing. As such, it can actually be a sensible time to boost your emergency savings.
Where to put your emergency savings
There are two main things to consider when choosing an account for emergency savings - the rate of interest, and how quickly you can get hold of your money.
It's important to keep this account separate from your current account to avoid using it.
Easy-access savings accounts are generally best-suited – just make sure there are no withdrawal restrictions so you can take out cash at any time.
You’ll next want to choose the right type of easy-access savings account. Make sure you opt for one that is protected by the Financial Services Compensation Scheme (FSCS).
Funds held in an account protected by the scheme are eligible for compensation of up to £120,000 if a financial firm like a bank fails.
When choosing an account, it could make sense to opt for a normal savings account rather than an easy-access cash ISA. This means you won’t erode your annual ISA allowance by putting money into the tax-free account that you later need to access (although a flexible ISA could help you get around this). That way, you can preserve your ISA allowance for other savings goals, provided you are able to contribute to other pots at the same time as your emergency fund.
Just bear in mind, the cash ISA annual allowance is set to be reduced from £20,000 to £12,000 from April 2027.
These are the top easy-access savings accounts on the market at the moment, according to Moneyfacts (all FSCS-protected):
Account | Rate (AER) | Notes |
Chase Saver (boosted rate) | 4.5% | You can earn a 4.5% boosted rate within your first 31 days of opening a Chase saver. It includes an extra 2.25% AER boost for 12 months on top of the standard variable rate. |
Mansfield BS Triple Access Bonus Saver | 4.25% | This account from Mansfield BS pays 4.25% if you save between £1 and £400,000 (only £120,000 is eligible for FSCS protection). The interest rate includes a 1% bonus, fixed for the first 12 months, after which it reverts to 3.25%. |
Vida SAvings Double Access Saver Issue | 4.16% | You can earn 4.16% interest on deposits from £500 to £500,000. Interest is paid annually and you can withdraw money from this account two times a year without incurring a lower interest rate. |
Virgin Money | 4.16% | OPen the account with £1. Only sole accounts are allowed, and you can save up to £250,000.. Only two withdrawals can be made per calendar year. |
Manchester BS Rainy Day Saver | 4.15% | Save between £1 and £1 million.. You’re allowed one penalty-free withdrawal each year, after which your rate will drop to 1.7%. |
Top tips to boost your emergency pot
Follow these three tips for getting your finances in order.
Round up savings
It can take time to build your emergency fund, but setting aside a set amount each to shift into a savings account can help. Work out what is affordable for you.
You can also use an account that rounds up your spending to give you a savings boost. These are small amounts, but they can add up over time. Accounts such as Monzo, Starling and NatWest fare some banks offer this tool. So, if you for example spend £3.20 on a sandwich, 80p is automatically shifted into a savings pot.
Slash costs
When you take a look at your spending, it is worth considering if there are things you can cut back on. If you don't need something or need to strip back on some spending, you can stash the extra cash towards your emergency savings pot.
Review your bills
Take a look at your bill such as broadband and mobile, and see if there are better deals available. If you are coming out of a contract, switching to another provider can save you hundreds. If you are still in contract, it might be worth waiting before you switch to avoid any exit penalties.
