Emergency Fund
An emergency fund is money set aside to cover unexpected costs, such as a broken boiler, car repairs or losing your job.
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What it means
An emergency fund is money set aside to cover unexpected costs, such as a broken boiler, car repairs or losing your job. It should be easy to access when you need it.
Example
Your washing machine breaks and costs £450 to replace. You pay using your emergency fund instead of a credit card.
Why it matters
It can help you avoid borrowing when unexpected expenses arise.
Many people aim to build several months' worth of essential living expenses, although the right amount varies.
Where should I keep my emergency fund?
Many people choose an easy access savings account.