Emergency Fund Calculator 2026/27
Work out a practical emergency fund target based on your risk level and monthly essentials. Then split your reserve across cash equivalents like money market funds and premium bonds.
Quick estimate
Recommended fund
£12,000
Months covered
6
Emergency Fund Plan
Estimate how much to keep in cash or cash equivalents for unexpected costs such as job loss, illness, major home repairs or urgent travel.
Recommended emergency fund
£12,000
6 months of essentials at £2,000 per month.
Suggested cash-equivalent split
Money market funds
£7,200
Premium bonds
£2,400
Premium bonds are capped at £50,000.
Cash
£2,400
Remaining allocation stays in instant-access cash.
What is an emergency fund?
An emergency fund is a dedicated cash reserve for unexpected but essential costs. The aim is to avoid expensive debt or forced investment sales when life events happen.
How much should you keep?
There is no single correct number. A cautious approach might hold 12 to 18 months of essentials, while someone with stable income and low fixed costs may choose 2 to 6 months.
Where should it be held?
Emergency funds are usually best held in cash or cash equivalents so money is available quickly. Popular choices are easy-access savings, money market funds and premium bonds.
What are money market funds?
Money market funds are low-volatility funds that invest in short- term, high-quality cash-like instruments. They aim to preserve capital while offering better interest than some current accounts. Learn more in our guide: What are money market funds?.
What are premium bonds?
Premium bonds are an NS&I savings product backed by the UK government where returns come from monthly prize draws instead of regular interest. You can withdraw money when needed, but returns are not guaranteed because they depend on prize wins.
Pros and cons
- Pros: financial resilience, less stress, and fewer high-interest borrowing decisions.
- Cons: lower long-term returns compared with investing and potential inflation drag.