Emergency Fund Calculator

How this calculator works

An emergency fund is money set aside for an unplanned cost or a drop in income, so that you do not have to borrow at short notice. This calculator multiplies your essential monthly spending by the number of months of cover you choose and shows the target balance.

The figure that matters is essential spending: the costs you would still have to pay if your income stopped. That normally includes rent or mortgage, council tax, energy, water, basic food, insurance, essential travel, phone and broadband, and minimum debt repayments. Leave out spending you could pause, such as holidays, eating out or new subscriptions.

The easiest way to find the number is to look at the last three months of bank statements and take an average, because bills vary from month to month.

Worked examples

Each target below was produced by this calculator.

Example 1: a first target of 3 months

Essential spending of £1,800 a month and 3 months of cover gives a target of £5,400. Some people start with a smaller first milestone, such as one month, and build from there.

Example 2: a longer buffer of 6 months

The same £1,800 of essential spending with 6 months of cover gives £10,800. A longer buffer can suit a household with one income, variable or self-employed earnings, or dependants.

Example 3: a couple with higher fixed costs

A household with £2,400 of essential monthly spending choosing 4 months of cover needs £9,600. If they save £300 a month, it would take 32 months to build that from nothing, so a stepped plan, for example one month's cover first, may be more realistic. You can use the savings goal calculator to test monthly amounts.

Assumptions and what this calculator does not cover

• No single right answer: the number of months is your choice. The calculator does not assess job security, health, sick pay, insurance or access to benefits, all of which affect how much you might need.
• Fixed spending: it assumes essential costs stay the same each month. Annual bills such as car insurance or the TV licence may need to be added as a monthly average.
• Where to keep it: it does not recommend an account. An emergency fund is usually kept in easy-access cash rather than investments, so that it is available quickly and its value does not fall.
• Inflation and interest: neither is included. Review the target when your bills change.
• Debt: it does not tell you whether to save or pay off debt first. That depends on interest rates and your circumstances.

Building the fund step by step

A target of several thousand pounds can feel out of reach, so it helps to break it down. Decide on a first milestone, such as £500 or one month of essential spending, and set up a standing order on payday so the money moves before it can be spent. When you reach the first milestone, set the next one.

Keep the fund separate from your everyday account, so it is less tempting to dip into it for non-emergencies. If you do need to use it, that is what it is for: plan to rebuild it afterwards, even slowly.

It is also worth checking what other support you would have if your income stopped, such as statutory or employer sick pay, redundancy pay, insurance policies, or benefits. These do not replace a cash buffer, but they can affect how many months of cover feel right for you. Recalculate your target whenever your rent, mortgage or major bills change.

Frequently asked questions

How many months of spending should I save?

There is no fixed rule. Three to six months of essential spending is a common planning range, but a smaller first target is still useful, and people with less secure income often aim higher.

Should I count my partner's income?

Base the target on the essential costs of the whole household and think about what would happen if one income stopped. If you share costs, it helps to agree who covers what.

Where should I keep an emergency fund?

Usually in an easy-access savings account or cash ISA, so you can reach the money quickly without it falling in value. Interest is a bonus; access matters more.

Will interest on my emergency fund be taxed?

Most people can earn some interest tax-free under the Personal Savings Allowance, and interest in a cash ISA is tax-free. Larger balances held outside an ISA may produce taxable interest.

What counts as an emergency?

Something unplanned and necessary, such as a boiler repair, an urgent car repair or a fall in income. Regular annual bills and planned purchases are better covered by separate savings.

Sources

• GOV.UK: Tax on savings interest – how much tax-free interest you get
• GOV.UK: Individual Savings Accounts (ISAs)
• ONS: Household expenditure
• GOV.UK: Council Tax

Rates for tax year 2026/27, last reviewed October 2026.

Results are estimates for planning, not financial or tax advice. See our terms and methodology.