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When money’s tight, an unexpected cost can throw everything off course. In 2024, 60% of people said they were worried about the impact on an emergency cost would have on their finances.

If you can, it’s worth considering setting up a small emergency fund, which can help you stay in control when life takes an unexpected turn. Even a little bit saved can make a big difference.

What is an emergency fund?

An emergency fund is a savings pot for unexpected costs. It can be put aside just for emergencies – like:

  • A car repair
  • A broken boiler
  • An urgent home repair
  • Replacing a broken appliance

It’s not for day-to-day spending – it’s a ‘financial safety net’ when something urgent and unexpected happens.

Why should I start an emergency fund?

Lots of people turn to credit or loans when they don’t have savings – but that can make debt harder to manage long term.

Having even a small emergency fund can help you avoid taking on more debt and stay focussed on your long-term goals.

How much should I save?

Start with what you can manage – even a few pounds a week is a good start. Over time, you can aim to build on this.

How to start an emergency fund

  1. Start small – Set aside whatever you can afford, even if it’s just £1 a week.
  2. Put leftover money to work if you have it – Move spare change or end-of-month leftovers into savings.
  3. Cut back where you can – Cancelling a subscription you no longer need could mean extra money to put in your fund.
  4. Save unexpected money – Use bonuses, gifts or refunds to top up your pot.
  5. Keep it separate – A savings account can stop you dipping in for non-emergencies.

See if you can join the Help to Save scheme

If you’re claiming certain benefits, you could get extra support through the government’s Help to Save scheme is a government-run scheme that allows people with low incomes to open a savings account. You can save from £1 to £50 a month, and get bonus payments on your savings after two and four years.  

Check out if you’re eligible for the Help to Save scheme.

When should you use an emergency fund?

Before dipping in, ask yourself:

  1. Is this expense unexpected?
  2. Is it urgent?
  3. Is it essential?

If the answer to all three is yes, it’s likely the right time to use it.

Worried debt is stopping you saving?

If you’re worried that your debts are affecting how you may be able to plan for emergencies, we’re here to help. Call us on 0800 813 1833. We’re open from 8 am-8 pm Monday to Friday and 9 am-3 pm on Saturdays. Alternatively, you can visit our advice page to speak to us via Live Chat or for more information.