Emergency Fund Calculator
An emergency fund is the financial shock absorber that stops a redundancy or boiler failure becoming a credit-card spiral. Add up your essential monthly outgoings — rent or mortgage, Council Tax, utilities, food, transport, insurance — and the calculator works out a target buffer plus the monthly saving needed to get there.
How is this calculated?
Total essential monthly outgoings are multiplied by the target number of months (typically 3 to 6). Required monthly contributions are then calculated using the future value of an annuity formula at the chosen savings rate, accounting for any starting balance. The fund should sit in an instant-access account — typically an easy-access savings account or Cash ISA — where capital is protected by the FSCS up to £85,000 per banking group and is available within hours, not days.
Frequently Asked Questions
How many months should my fund cover?
Three months for a dual-income household with stable employment and no dependants; six months if you're single-income, self-employed, or in a sector with a long average job-search time. Twelve months is sensible for contractors or anyone with a non-standard income pattern.
Where should I keep the fund?
Easy-access savings or a Cash ISA at a bank covered by FSCS protection. The priority is liquidity and capital security, not yield — when you need this money you really need it. Avoid notice accounts, fixed bonds, or anything market-linked for the core emergency buffer.
Should I pay down debt first or build the fund?
Build a starter fund of £1,000–£2,000 first, then attack expensive debt (anything over 8%–10%), then return to fully funding the emergency pot. Without any buffer, every unexpected expense lands on a credit card and undoes your debt progress.
What counts as an essential outgoing?
Rent or mortgage, Council Tax, utilities, food, basic transport, insurance premiums, minimum debt repayments, childcare, and any contractual subscriptions. Exclude Netflix, eating out, holidays, and gym memberships — in a real emergency these are the first things you'd cut.
Last updated: May 2026 · Rates sourced from HMRC