Is it really worth having so much in emergency savings when you have good job security?

[Bluetoybox]

I work for the NHS and my job is secure.... Not a 100% guarantee of course, but about as secure as it gets. I've also worked long enough that I have full sick pay entitlement (6 months full pay, 6 months half pay) and in the unlikely event that I was made redundant I'd receive over a year's salary in a redundancy package. I'm not planning on doing anything to get me fired and of course as many who know the NHS will know, you have to pretty much murder someone for that to actually happen so again, not really something I am anticipating being an issue.
I've finally cleared all debt apart from Mortgage and am now building an emergency fund. I have about 3 months living expenses if I lived off beans on toast and pulled DD out of nursery. There are things I'd really like to do though especially to my house which could do with a lot of TLC to make it a nicer home for us. AIBU to think, especially with the interest rate as it is, it's not really worth plummeting lots of money into savings when I could be using it to make my home nicer and increase its value which in a true financial emergency would probably help me more anyway as I could sell my house if I absolutely had to.
I know this year has taught everyone we need to be more financially smart but does that alwaysean having money just sat there doing nothing?

@CaptainVanesHair Do you have an employer pension scheme? If not, you could put some of your savings into a SIPP and you get the income tax back on it - a good way to build up additional pension provision.. I'm sure there are other useful schemes too (LISA?) but don't know very much about them.
Look at Money to the Masses?

I keep a level of emergency living costs should the worst happen but really we could afford to live on one of our salaries if push came to shove so we would both have to be out of work at the same time to need it

If emergency repairs are needed we would probably put on a credit card to pay off as convenient

Credit cards are empty but have around £10k available credit on each should any emergencies happen.

We recently saved enough to cover costs of 1 years maternity but haven’t needed it so dipped into that to do some home improvements - we’ve added a garden room and spent money on new blinds and decent cookware

We could just keep saving and saving but I have to remind myself to enjoy it too as I can get a bit carried away with saving and COVID hasn’t helped the anxiety of needing a safety net at all times no matter what

This thread is full of self-selecting posters all vying to be crowned savings queen of mumsnet and stealth bragging about how much money they have. In reality most people in this country have little to no savings not tied up in their property.

It depends on your attitude to risk. The OP seems to be in a pretty secure position and will get a cushion of money from her employer in most eventualities. Planning for a situation where the government is bankrupt and refuses to pay nurses salaries as a previous poster suggested seems to be catastrophising to the nth degree.

Keep the savings, put some in to a stocks and shares ISA if you’re worried about inflation.

Always have savings, you never know if you’ll get too ill to work or if you’ll have an emergency. Keep several months cash saved, and then save up for the things you want to do for your house.

Similar position.

We have 6 months’ expenses in combination of current account and cash ISA accounts (London mortgage so big monthly expenses).

Then separate savings in premium bonds to cover childcare and school fees for a year.

Then stocks and shares ISAs - both trackers and managed funds.

My family are middling earners but have always been financially astute. I grew up in India where there’s no welfare state and where you couldn’t even obtain a mortgage in living memory, so savings are a way of life for us. Other than visiting family in India (so flight expenses only) we haven’t been on holidays in a decade. We have one rubbish car. Despite us both earning a lot we shop at Morrisons and Primark. It is not how we plan to live forever so it’s easy to accept.

Personally given my personal experience I would keep any savings. Bullying in the NHS is endemic. All it takes is for there to be a reshuffle and you end up with the manager from hell. In my Trust they never make anyone redundant. When they need to make savings they just bully the non-favourites until the break or leave to get the numbers down.

The way we look at it is that the mortgage % is higher than savings so makes more sense to plough money into paying that down.

We tend to keep a £10k float so we can buy a new second hand car if we need to, boiler, emergency accommodation, private health care (Something we never ever want to use but if we NEEDED to we could).

@Snookie00 people's attitude to risk is fascinating. It was kind of a relief to me when DH's kids were earning and through university which felt like we didn't have to be worrying about them.

So if we both lose our jobs (unlikely) we'll downsize, reduce our outgoings ... but it'll be OK. So I'm happy spending our savings on an extension and garden that'll really make our house nice to live in.

Just to add for everyone reading this thread, please do make sure you have critical health insurance if you can and don't make the mistake we did.

In our early 30s, child free, and having saved every penny for a deposit for our recently bought first house purchase, it wasn't something our husband and I thought about.

I kicked myself about this in hindsight, but am fortunate in that my salary and my husband's disability benefits are enough for us to afford our mortgage and bills. However I had to use savings when he was on SSP till we got benefits sorted - which we are extremely grateful for but obviously are less than what he earned working. You never know what's around the corner.

The things that really destroy people’s finances in India are illness and disability. I know we have the NHS here in the UK but there are plenty of illnesses that can take you out for more than a year, cancer, TB (not impossible as a nurse), mental health etc so would not be covered by sick pay towards the end. Then God forbid a child becomes ill and needs full time care from a parent.

I’m so sorry, I don’t want to depress anyone but I just remembered my father’s advice, which is “Beware two bad things happening at once.” It’s when you have a run of bad luck that things really go wrong for you, and it happens to all of us. We have certainly been there.

What sort of safety net do you have with your parents and extended family?

Never put your emergency fund into a stocks & shares ISA.
Cash ISA, yes. Your emergency fund needs to be somewhere safe and easily, quickly accessible.
Make sure your 3 months emergency money is realistic and based on honest calculations. Don't kid yourself it's ok to budget for beans on toast. Then put it into a cash ISA and forget it for a year (then you review it, make sure it's still realistic, add to it for a couple of months if nec).
By all means then prioritise the house, it's your biggest investment for the future.
But put aside a little, even £50 a month into savings for the long term (5 yrs plus) and a little for hols and days out and presents etc.

I have 6 months of bills tucked away just in case. I do worry about the future so I like to know I have that if it’s needed. I have critical illness cover via work.

@NoIDontWatchLoveIsland

DH and I are on v high income and have good job security, lots of equity in our home etc. We always have 6m costs in savings. Always.

We are pretty risk averse though, generally.

Yes similar here. No mortgage and plenty of savings, but I save 1/3 of my net income a month and DH saves a lot too.

However, I think working for the NHS is a bit different. It really is secure, even if you lost the job you have now there would be another one elsewhere in the system. In your shoes I'd get 4 months comfortable living (not beans on toast) in the bank (so maybe add about 50% to your current savings) and then start saving for the things you want to do to the house.

We had a load of significant expenses pile up that blew threw our emergency fund once right as we were finishing significant home renovation- newish car broke completely so we had to replace it (not a warranty fault or insured, just unlucky), major appliance (think boiler) failed) and I was on maternity leave. We ended up with no savings and a small personal loan. We are still building it back up. Don't get rid

Lots of reasons why you may not stay in your job other than redundancy.

You may have an accident or contract an illness that means you can no longer work in the same role, or in any role, or need to reduce your hours etc.

Or, you may suddenly find yourself working with people you can't work with, i.e. either lazy, idiots or bullies, etc.

Or, you may just get fed up and fancy doing something different, i.e. a different career or a lifestyle business, etc.

Having lots of savings gives you the freedom to make life choices. Without savings, you're basically a "wage slave" and would have to put up with your job whatever happens.

I don't understand why the tax payer should fund you a whole years salary if you get made redundant

I live month to month and have no savings to speak of. Any amount I can save goes on small home improvements, cheap UK holidays etc. It would take me so long to build up 3 months or 6 months worth of living costs as savings it would mean years of going without.
I also have an NHS job. If I lost my job and couldn't find a new one I'd be back to living on benefits until I found a new one. Not ideal, but not devastation.
Caveat to say, I have parental support to draw on if needed.
I would say OP that 3 months of expenses is fine. Like you say, when do you stop? Enjoy your money.

@Girlsblouse17

I don't understand why the tax payer should fund you a whole years salary if you get made redundant

Your post annoyed me. It’s one month’s salary for every continuous year worked in the NHS. Is’s the Employment Rights Act 1996. I have never heard of a nurse being made redundant, have you?!!!!

buddhaatsea - It is way way more than statutory redundancy pay which is 1 WEEK for every year of employment, not 1 MONTH!

And it's capped at 508GBP a week!

But good redundancy entitlement, not that it's used that often, is part of the package offered by the NHS.

Despite job security, excellent redundancy and pension entitlements, the large staff shortage suggests that it's not enough to make up for poor pay and working conditions.

I have 12month of wages in emergency savings.

I stopped adding to it at 12m worth.

I then have children’s savings and housing savings.

.

Keep money in the pot and from now on, save towards home projects and a little bit towards the pot.