Emergency Fund Calculator
Set a target from what you actually have to pay each month, then see how long it takes to build at the rate you are saving — with interest handled properly rather than divided by twelve.
| Cover | Target | Still to find | Time |
|---|
What this calculator assumes
- The target is a multiple of your essential outgoings, not of your salary. In a genuine emergency you would cut discretionary spending, so there is no reason to fund it.
- Interest is applied monthly using the rate implied by the AER you enter, so an AER of 4.00% becomes a monthly rate of about 0.327%, not 0.333%.
- Contributions are assumed to arrive at the end of each month and to continue at the same amount until the target is reached.
- Interest is treated as tax-free, which holds inside a cash ISA and for most people under the personal savings allowance. Higher earners with large balances outside an ISA may pay tax on some of it.
- The rate is assumed to stay fixed for the whole period. Easy-access rates move, so treat the timeline as indicative rather than a schedule.
- Inflation is not modelled. A target set today buys less in three years, so it is worth revisiting the figure as your costs change.
- Nothing you type leaves your browser. There is no account, no sign-up and no data stored.
The three, six and twelve month targets follow the range in common use across UK money guidance, including the Money and Pensions Service. Which one fits you depends on your job security, income stability and who depends on you — the calculator shows all three so you can judge.
How big should an emergency fund be?
Three to six months of essential outgoings is the range most UK guidance settles on, and it is a reasonable default. The more useful question is which end of it you sit at, and that depends less on your salary than on how quickly you could replace it.
| Cover | Suits |
|---|---|
| Three months | Stable employment, no dependants, a second income in the household, and a role you could fill again reasonably quickly. This is the first milestone worth aiming at rather than a finishing line. |
| Six months | Sole earner, dependants, a specialised role that takes longer to replace, or a mortgage large enough that missing payments has consequences fast. |
| Twelve months | Self-employed or contracting with lumpy income, a sector going through redundancies, a health condition that could interrupt work, or anyone who would just sleep better for having it. |
Note that the target is a multiple of essential outgoings, not of your pay. Someone taking home £3,000 a month with £1,800 of essentials needs £5,400 for three months of cover, not £9,000. In a real emergency the discretionary spending stops on day one, so funding it is a waste of a scarce buffer.
A worked example
Take essential outgoings of £1,820 a month, £1,200 already saved, and £560 a month going in, held in an account paying 4.00% AER.
Without interest the same journey takes 8 months too — at this size and horizon, 4.00% AER contributes about £83 in total, which is real but not decisive. Interest matters far more once a balance is large and sitting still: the same £5,460 left alone for a year earns roughly £218 without you adding anything.
Stretching to six months of cover moves the target to £10,920 and pushes the date out to 17 months. Twelve months of cover means £21,840 and roughly three years. The jump is why three months is worth treating as a milestone rather than dismissing as inadequate — it is reachable inside a year for most people, and it already removes the scenario where a broken boiler becomes credit card debt.
Where to keep it
An emergency fund has one job, which is to be available on the day something goes wrong. That constrains where it can sensibly sit.
- Instant access, not notice. A 90-day notice account paying slightly more is the wrong instrument for money you may need on Tuesday. The extra interest is not worth the delay.
- Separate from your current account. Money that shares a balance with your spending money gets spent. A different account, ideally at a different bank, adds enough friction to matter.
- Not invested. Stocks and shares can fall 20% in exactly the kind of month you need the cash, which turns a temporary problem into a permanent loss. Investing is for money with a long horizon, which an emergency fund by definition does not have.
- Within FSCS limits. Deposits are protected up to £85,000 per person per authorised institution. Worth checking if you hold a large balance, and worth knowing that some brands share a banking licence.
A cash ISA keeps the interest free of tax. Outside one, the personal savings allowance covers £1,000 of interest for basic rate taxpayers and £500 for higher rate taxpayers, with nothing for additional rate taxpayers — enough that most people with a three to six month buffer will not pay tax on it either way.
Once the buffer is built, the money you were putting into it becomes available for other things. The savings goal calculator handles targets with a deadline, and the payday allocation calculator shows how the split shifts towards investing once a buffer is in place.
Frequently asked questions
Other calculators
The number that is hardest to get right is your essentials
Most people underestimate essential outgoings, because the small recurring ones are easy to forget and the annual ones are invisible for eleven months. earmarkIQ works the figure out from your actual bank transactions rather than memory, and updates the target as your costs move.