Life Events — emergency fund
There are two types of emergency fund :
the one that you should have now, its readily available and would cover an unexpected disaster. Most of us need to keep this type of fund just in case and the best place is in a bank, national savings or building society instant access account. A mini cash ISA is ideal as its tax free, as long as it is instantly available without penalty. The amount you need to keep varies but it is difficult to imagine any emergency that needs you to keep more than £1,000 available.
The other type of emergency fund is more long term. Its for those unexpected life events that may stop you earning for a few months. You need to spend more thought on how to build this fund but check out our item on building a financial cushion
Things you may need to know:
- Building a financial cushion
- About life assurance
- Paying bills when you are too sick to work
- Clearing debts when you are seriously ill or disabled
- Pension sharing in divorce
- Minimising the Inheritance Tax bill
- Paying for personal care or nursing for an older family member
- Read our client's stories
