What next?
A buffer is the first thing to build and the easiest to skip. These decide how big it has to be, and what happens to the money above it.
What your result means
Months of cover is the number this tool exists to produce: how long your household could pay its essential bills with no income arriving. It starts at three months and moves with your circumstances, so it is your number rather than a range. Your target is that figure multiplied by your essentials — not your whole budget, because in a genuine emergency the holidays and subscriptions stop. Cover you have today is the same measure applied to what is already saved, which is usually more encouraging than the cash figure looks.
Why this one is different
Instead of repeating "three to six months", this derives your own months-of-cover target from job security, notice period, dependants, income protection and whether the household has one income or two — and the page states which of those moved your number and by how much.
The same buffer is reckless for one household and excessive for another
Two incomes on permanent contracts with six months of employer sick pay behind them can survive a shock that would sink a single freelancer with two children and statutory cover only. A single range cannot describe both, so the usual advice is either frightening or useless depending on who reads it.
What actually drives the number is how likely the income is to stop, how long it would take to replace, and how many people are relying on it. This tool scores those four things explicitly and shows you the arithmetic, so you can disagree with an assumption rather than the total. If expensive balances are what stand between you and the target, the debt snowball vs avalanche calculator shows which one to clear first. Money above that target is not an emergency fund any more; that is when a savings goal or an investment starts making sense.
How it works
The tool starts from a three-month base and adjusts it. One income instead of two adds a month, because there is no second wage to fall back on. Job security moves it most: very secure work takes half a month off, variable income adds a month and a half, and precarious income adds three. Each dependant adds half a month, capped at a month and a half. Sick pay works in the other direction — an income protection policy takes a month off, employer sick pay half a month, statutory-only cover adds half a month and no cover at all adds a full month. The result is clamped between 1.5 and 12 months, rounded to the nearest half month, and multiplied by your essential outgoings.
How to use this calculator
- Add up your essential outgoings — housing, utilities, food, transport, insurance and minimum debt payments. Leave out anything you would cancel in week one.
- Say whether the household runs on one income or two, and how secure that income is. Be honest about redundancy signals; the point of the fund is the case you would rather not think about.
- Count the people who depend on the income, not counting the earners.
- Pick the sick pay that would actually apply to you. Many people assume they have employer cover and find out otherwise at the worst moment.
- Enter what you have saved and what you can add each month to see the time to get there — then aim at one month of essentials first, not the full target.
Formula
Every term is months of cover added to or taken off a three-month base. Stability runs very secure → secure → variable → precarious; cover runs income protection policy → employer sick pay → statutory only → none. The clamp keeps the answer inside the range that any cash buffer can sensibly hold: below 1.5 months a fund does not absorb a real shock, and above 12 months the money is better working elsewhere.
Example calculation
A single freelancer with two children, no sick pay, and £1,800 of essential outgoings a month:
One income: +1 → 4
Precarious income: +3 → 7
Two dependants: +1 (2 × 0.5, under the 1.5 cap) → 8
No sick pay at all: +1 → 9 months
Target = 9 × 1,800 = £16,200
With £4,000 saved that is 2.2 months of cover and £12,200 to go — 41 months at £300 a month
Frequently asked questions
Should the fund be in cash when inflation eats it?＋
Yes, and yes it does lose value slowly. That is the price of the thing being there on the day you need it. An emergency fund is insurance, not an investment: it is judged on whether it can be spent this week without selling anything at a loss. Keep it in the highest-paying instant-access account you can find, accept that it will lag inflation, and invest the money above your target instead.
Do I pay off debt first or build the fund first?＋
Build one month of essentials first, then attack expensive debt, then come back and finish the fund. Without any buffer the next unexpected bill goes straight back onto the card you are trying to clear, which is how people spend years paying interest on the same £1,000. One month is enough to break that loop; the rest can wait behind a 25% APR balance.
Does a credit card or overdraft count as cover?＋
No. Credit is not a buffer against the events that empty a buffer, because the same shock that costs you your income is when lenders reduce limits and refuse applications. Overdrafts can be withdrawn at short notice, and a card converts a temporary problem into a permanent interest cost. Count only money you already hold.
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Assumptions & limitations
Every figure here comes from a simplified model. Keep these limits in mind when reading your result:
- This is a structured rule of thumb, not advice or an actuarial calculation. The adjustments are a transparent scoring model, published in full above so you can disagree with any one of them.
- Essentials are assumed to continue unchanged through the emergency. In practice some costs fall and others — childcare cover, travel to interviews — rise.
- No investment return or interest is applied to the fund, and no inflation is applied to the target. Both are small over the year or two most funds take to build.
- State support is ignored entirely. Statutory sick pay and contribution-based benefits are paid at a flat rate far below most salaries and for a limited period, and eligibility varies — check the current rules before counting on them.
- The model does not know about a partner’s redundancy terms, a notice period, a mortgage payment-protection policy or family who would help. Any of those legitimately reduces the number.
- Above roughly twelve months of cover, more cash stops buying much security. The clamp reflects that, not a claim that nobody needs more.