Emergency savings searches soar 950% as households look for a financial safety net

Searches for emergency savings have soared by 950% in the past year, as more people look for ways to deal with unexpected costs.

The sharp rise suggests more households are thinking about what would happen if an unexpected bill landed, whether that’s a broken boiler, a car repair, a large household expense or a sudden change in income.

Having money set aside can make it easier to deal with these costs. But for households already feeling the pressure of the cost of living, building an emergency fund can be easier said than done.

Why are people looking for emergency savings advice?

An emergency fund is money that’s been set aside to cover unexpected costs.

Without one, an unexpected £300 bill could mean using an overdraft, putting the cost on a credit card or borrowing money. With some savings behind you, the same bill may be much easier to manage.

The huge increase in searches for emergency savings suggests that people are increasingly thinking about how they would cope if something went wrong.

But there’s an important distinction between wanting to save and being able to save.

If your household budget is already stretched, there may not be much left at the end of the month to put away.

That doesn’t mean you shouldn’t save. It means your emergency fund needs to start with what is realistic for you.

How much should you have in an emergency fund?

There’s plenty of advice suggesting you should have several months of essential spending saved.

That can be a useful long-term goal, but it can also make emergency savings feel impossible if you’re starting from £0.

You don’t need thousands of pounds in the bank before your savings become useful.

Even £100 or £200 could help you deal with a smaller unexpected expense without immediately turning to credit.

If you can afford to save £10 a week, you could have more than £500 after a year. If £10 isn’t realistic, £5 a week still gives you £260 that you didn’t have before.

There’s no single emergency fund figure that works for everyone.

The right amount depends on your income, your essential spending and how much financial security you already have. Use our free online budgeting tool to help you see if and where you could free up cash to start to put into savings.

Don't save money you need for bills

One of the most important things to remember is that you shouldn’t put money into savings if you’re then going to have to borrow to cover your essential spending.

For example, if you put £50 into an emergency fund but then have to use your overdraft to pay for your food shop, you haven’t really improved your financial position.

Start by looking at your budget and working out what you genuinely have available after your regular costs. Our free online budgeting tool can help with this.

If there isn’t anything left, your priority may need to be reducing your regular spending or dealing with debts before trying to build a substantial savings pot.

Start small and build from there

If you’re starting from nothing, set a target that feels achievable.

Your first goal could be £100. Once you reach that, you could aim for £250 and increase it over time.

Breaking the target down makes it easier to see your progress.

You can also automate the process by setting up a regular transfer into a separate savings account shortly after payday. Even a small amount can build up without requiring you to make a decision every week.

The important thing is not to set a savings target that makes the rest of your budget unworkable.

Where should you keep emergency savings?

Emergency savings should be accessible when you need them.

An easy-access savings account can be a good option because you can get to the money without having to rely on credit or wait for a fixed-term account to mature.

It can also help to keep your emergency fund separate from your everyday spending account.

If your emergency money is sitting alongside your normal spending balance, it can be tempting to treat it as money you have available to spend.

The purpose of an emergency fund is to cover costs you haven’t budgeted for, rather than becoming another pot of spending money.

What actually counts as an emergency?

Not every unexpected expense is necessarily an emergency.

Some costs might feel unexpected when the bill arrives but are actually predictable.

Christmas, car insurance, an MOT, annual subscriptions and school costs are examples of expenses that can often be planned for.

You could create separate savings pots for these costs rather than relying on your emergency fund.

That means your emergency savings can be kept for things you genuinely couldn’t have planned for, such as an urgent repair or an unexpected loss of income.

The cost of living makes emergency savings harder

The 950% increase in searches is encouraging because it suggests people are thinking about how they would cope with an unexpected cost.

But it also highlights a problem.

It’s difficult to build savings when a large proportion of your income is already going towards essentials.

For some households, the priority isn’t going to be building a six-month emergency fund. It might simply be getting through the month without relying on credit.

That’s why emergency savings shouldn’t be treated as another financial target that everyone should be able to hit.

If you can save something, start with what you can afford.

If you can’t save right now, focus on understanding where your money is going and what could realistically change.