We recommend 3 to 6 months worth of living expenses in an emergency fund. When you’re working out what this figure is for you, it’s worth including only your basic living costs like your mortgage or rent, utility bills and groceries.
If you were to lose your job for some reason, this gives you a buffer to continue to meet your day to day living expenses while you sort things out. It also tends to work out as a reasonable amount for one-off ad hoc expenses that might come up.
For example, if your basic living costs are £6,000 per month this means you should aim to have between £18,000 and £36,000 in cash in a bank account as your emergency fund. There aren’t many true emergencies that are likely to cost you more than that.