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How much for a permanent 'Rainy Day' fund?

Discussion in 'Retirement' started by stopwatch, Sep 6, 2020.


How much for an emergency fund?

  1. Less than £5,000

    0 vote(s)
  2. Around £6,000 - £10,000

    5 vote(s)
  3. Around £15,000 - £20,000

    5 vote(s)
  4. Around £21,000 - £40,000

    7 vote(s)
  5. Around £41,000 - £60,000

    6 vote(s)
  6. Above £60,000

    7 vote(s)
  1. stopwatch

    stopwatch Lead commenter

    I am curious to know how much money people think is the minimum amount to keep indefinitely as a fund for major emergencies.

    We (Me and Mrs Stoppers) are 2 years into our retirement. We are unlikely to ever have monthly pension income which provides us with much spare income above general month to month bills and some spare for minor luxuries like a meal out or a weekend break.

    At the moment major holidays and purchases come from a cash fund which we accrued from our time overseas. We currently also use this to invest in small property purchases along with a couple of other people. This has provided us with an average £3,000 - £5,000 profit/income per year, but is not a guaranteed income for future years.
    Obviously, this means that our cash fund will gradually decrease over the coming years.

    We are trying to decide what kind of amount we would want to keep as a permanent crisis fund (ie when we would stop buying major purchases and leave the money alone!)

    What do people think? (I'm not necessarily asking you to divulge your personal private financial situation as I know that some people are sensitive about discussing their finances).

    jonnymarr likes this.
  2. lindenlea

    lindenlea Star commenter

    I would say £10,000 - £20,000 but how long is a piece of string?
    tall tales and Treacle3 like this.
  3. Newidentity

    Newidentity Occasional commenter

    I'd feel happy with about £10k.
  4. diddydave

    diddydave Lead commenter

    Food and shelter are the most basic needs.
    The latter of these is probably the one that has the greatest scope for an expensive 'disaster', so I look at the cost of replacing the roof as the minimum emergency I may have to cover - about £30k.
  5. ikon66

    ikon66 Occasional commenter

    £30k for a roof? Either you have a very large house or live in London. I’d say half that
    up116647 and tall tales like this.
  6. jonnymarr

    jonnymarr Occasional commenter

    Great question. I'm not there yet, but I'd always assumed multiple £10 000s were needed as a safety net, but I suppose I've never actually had the roof+car+boiler+++ ( unexpectedly / unforeseen ) go wrong at the same time, so now I'm thinking less might be ok. Potential care costs? Not a pleasant thought, but anyone factoring those in... or insuring against them? Could be £££££. If the worst happens, I suppose you sell the house, run down your assets and then let the state pick up the tab?
  7. Morninglover

    Morninglover Star commenter

    Many people probably have a lot less, but I wouldn't be happy with anything under 60K. At under 20K I'd start losing sleep I think. (I'm speaking as a retired person - when I was working we seldom had savings above 10K, but I had a pretty good, and reliable, income).
    plot71 likes this.
  8. diddydave

    diddydave Lead commenter

    Yes, but an old house in a conservation area...if the timbers go as well it's not a stretch for that amount. We had a lorry hit and rip off some of it off 2 years ago and that repair hit £5k
    ikon66 likes this.
  9. emerald52

    emerald52 Star commenter

    Surely you would be insured for that? I sweep any left over money in my current account into savings each month. Then car repairs etc can be paid out of savings if necessary. There are lots of ways to save money in retirement.
  10. heldon

    heldon Occasional commenter

    30K for us in ready cash
  11. stopwatch

    stopwatch Lead commenter

    I kind of think along similar lines (more like £20k+), but then I think ‘what if the emergency happens and I spend it all?’ what would I have for the next, possible emergency? I’m torn between playing it overly safe and ‘to the hell with it, I could always sell the house!’
    tall tales and lindenlea like this.
  12. foroff2233

    foroff2233 Occasional commenter

    The most you can put away, given the entropic state of markets in the so-called advanced economies. We have a global pandemic, a climate emergency. Maybe only 30 more harvests. The imponderables are far-reaching and frightening.
  13. Treacle3

    Treacle3 New commenter

    If the future is that bleak I doubt whether money will maintain great value. If that is what you think will happen I would suggest keeping a very small emergency fund and enjoying life now:)
    tall tales likes this.
  14. Spiritwalkerness

    Spiritwalkerness Star commenter

    I'd like to be able to have enough put by to buy another car if mine were to die in a way that insurance wouldn't cover it. So about £5000 max.

    I'd like to hope that anything else, like roof or boiler disasters, would be covered by insurance.
  15. wayside34

    wayside34 New commenter

    When I first started to work I always wanted to retire at 60, and made plans to facilitate this. I retired at 57 plus the added bonus of severance.I drew my T.P. at 60. This question has given some very interesting answers and we all see life, living and saving differently. I feel comfortable with several tens of thousands.

    During this pandemic my foreign travel plans like many of us have ceased the money I have not spent on travel I have managed to upgrade my car without using saving.The only good thing to come out of this pandemic...
  16. pauljoecoe

    pauljoecoe Occasional commenter

    Insurance is your friend.

    If you make sure you are insured for the big things then the contingency fund could be kept lower to cover excess and things that aren't worth insurance i.e. car repairs, washing machine. So I'd say 10K would be ok.
  17. Morninglover

    Morninglover Star commenter

    I always believed that...until I tried to claim. Then I discovered insurance companies exist primarily to take your money to pay their shareholders, and to find loopholes to avoid paying out when you claim.

    So although I still make sure I am insured, I don't rely on those policies as experience has taught me that they are unreliable.
  18. diddydave

    diddydave Lead commenter

    Oh yes, this is my 'real' emergency...one where for one reason or another the insurance company wheedle out of the claim.

    When the lorry hit the house we managed to claim against his insurance but only because, at midnight, I ran across two fields to get in front of him before he left the village to stop him legging it!
    emerald52 likes this.
  19. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Insurance for your house mostly only covers 'accidents', not wear and tear. It can pay if your roof gets blown off in a storm or a lorry drives into your house but not if it's just worn out and needs replacing. "Insurance isn't a maintenance contract" as we used to say when I was dealing with insurance claims!
    lizziescat likes this.
  20. EmanuelShadrack

    EmanuelShadrack Star commenter


    Fundamental Principle of Insurance:

    "Don't have insurance for anything you can afford to pay for".

    For example, I don't have insurance for my boiler. Any money that would be put into some policy goes towards keeping it serviced, so it doesn't break down in the first place. (And even if it did, I could cover it.) There's no middleman to take a (large) cut, and no fighting with insurance companies who, in case people aren't aware, have entire departments devoted to avoid paying out.
    emerald52 and Rott Weiler like this.

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