How much should you have in an emergency fund?

An emergency fund is money you keep for the unexpected: a broken boiler, a vet bill or a gap between jobs. It's what stops a bad week turning into debt.

How much

The common rule is three to six months of essential spending. Not your full salary: just the bills and costs you'd still have to pay.

• Nearer three months if you have a stable job, a partner's income too, or few dependants
• Nearer six months or more if you're self-employed, a single earner, or in an unpredictable industry

Start smaller

Six months can feel impossible. Start with £500 to £1,000, which covers most one-off emergencies, then build up.

Where to keep it

Somewhere you can reach quickly but won't dip into by accident: an easy-access savings account or easy-access cash ISA, separate from your current account. Don't invest it in shares, because its value could drop just when you need it.

Emergency fund or paying off debt?

If you have expensive debt like credit cards, it often makes sense to build a small starter fund first, then focus on the debt, then grow the fund. Without any buffer, the next emergency goes straight back on the card.

What counts as an emergency

Unexpected, necessary and urgent. Christmas and car insurance renewals aren't emergencies, because you know they're coming. Save for those separately.