What this calculator works out
The standard answer to ‘how much?’ is three to six months of essential outgoings, held in an instant-access account — that is the guidance from MoneyHelper, the free service run by the government-backed Money and Pensions Service. Where you sit in that range depends on how likely your income is to stop and how quickly it would come back.
The method, in full
It starts at three months — the bottom of the standard range — and adds months for the things that make a loss of income more likely, or its consequences worse. The adjustments are these:
- Employed, permanent, feels secure — no addition.
- Employed but fixed-term, on probation or at risk — add one month.
- Self-employed, or income that varies month to month — add one and a half months. Variable income means the buffer is doing two jobs: covering emergencies and smoothing the lean months.
- You are the only earner in the household — add half a month.
- One other person depends on your income — add half a month; two or more — add one month.
The total is capped at six months, the top of the standard range. Multiply the months by your monthly survival number and that is the target. Divide the cash you already hold by the survival number and that is the cover you have now. The difference is the gap; the gap divided by what you can save each month is how long it takes.
The three-to-six-month range is established guidance and is cited above. The step-by-step adjustment within that range is a Buzz Money Coach rule of thumb, not an official figure, so the calculator shows every step on screen. If your job is safer or shakier than the categories suggest, override it.
Assumptions
- Months are of survival spending, not full spending. In an emergency you would cut back to essentials.
- No interest is added. The calculator does not assume any growth on your savings.
- No inflation is applied. Both the target and your saving are in today's money.
- Cash means cash you can reach this week. Money in a fixed-term bond, a pension, or investments does not count.
- Your figures stay in your browser. Nothing is sent to a server.
Start with £500
Aim at £500 first. It covers many small emergencies, such as a tyre, a vet bill or an emergency plumber. The calculator shows £500, one month, three months and six months as separate milestones.
Set a standing order for the day after payday, into an account at a different bank from your current account. Add one-offs too, such as a tax refund, a bonus or birthday money.
Where it should sit
It should be separate from your current account so you do not spend it without noticing, and instant-access so you can reach it in an emergency. An easy-access savings account or a cash ISA both do the job. We cannot tell you which account or provider to use — that would be a regulated recommendation and we are not authorised to make one.
The free Financial Freedom Score takes about seven minutes and gives you one next step. Or start with the survival budget calculator if you have not worked out the number this one runs on.