How to save for an emergency fund – and keep it safe


An emergency fund is all to do with planning ahead. It’s not there to make you money – but to protect the money you already have.

The idea is to get a supply of easily accessible cash together to help you pay unexpected bills. 

It’s hard to get ahead if you’re constantly playing catch-up, so having your emergency fund will help stop you slipping into debt if things go wrong.

These are some steps you can take to protect you from a nasty surprise spending forcing you to dig into your longer term savings.
  1. Track your spending – create a spreadsheet or buy a notebook to see what you spend and what’s left over;
  2. Pay off debt first;
  3. Set a realistic monthly or weekly savings goal, or you’ll be dipping into the emergency fund for essentials;
  4. Treat your emergency fund differently to other pots of money: This is a safety net that’s supposed to be there in your time of need to protect you when something goes wrong;
  5. It should be easily accessible but in a separate account where you won’t be tempted to spend it;
  6. Keep it safe (from the stock market) and in an account protected by Financial Services Compensation Scheme;
  7. Aim to collect between three and six months’ take home pay. It’ll be hard work but will cover a multitude of unexpected expenses; 
  8. If you don’t have savings, getting some together can be daunting – target a month of take-home pay as a first goal and watch the buffer grow;
  9. If you ARE struggling with debt, get advice from the Money Advice Service.
And it’s easy to start saving – as little as £3 per day can set you on the right track. You can open one of our savings accounts with as little as £1 by visiting one of our branches.

Your saved cash could pay for a broken boiler, lost phone, car repairs, new washing machine, or cover a period of unemployment or sickness.

Saver Nicola Johnson, from Hucknall, said: “We try to keep an emergency fund topped up. We have a goal. It’s about £5,000 and luckily we’ve not had to use it so far. 

“It’s in an account where if we dip into it for anything we are alerted to top it up again to get it back to where it should be.”

A survey showed that half of all younger households wouldn’t be able to cover an unexpected bill and would have to borrow to pay it, something which could be avoided with an emergency fund in place.

Assistant product manager at The Nottingham, Jamie Hyland, said: “You never know when you’re going to need emergency funds, so by starting with £1 and putting away as much as you can, as regularly as you can, you’re much more prepared when unexpected bills come through and less likely to need to borrow money from other sources.

“Something like a regular saver account is perfect for encouraging this on a month by month basis, particularly if you remember to deposit some money as soon as you’ve got some spare. 

“Some regular saver accounts also limit the number of withdrawals you can make, which reduces the temptation to use the funds.”

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