Emergency fund - reduce it or keep as is?

[JennaS90]

Emergency fund sits at c.£5k, monthly mortage/bills total c.£1200.

DH and I work for the same employer which has generous sick pay (covering about 9 months) and are long serving employees so redundancy would see each of us given the equivalent of 8/9 months salary.

Touch wood, any low level emergencies e.g stuff going wrong in the house has always been covered from money left over from our monthly pay, so we’ve not actually dipped into the emergency fund for years.

With the above in mind, AIBU to suggest reducing this pot to c.£3k and taking 2k out for other things (partly to invest in my S&S ISA)

Would you build up the 2k again over how many months or permanently leave at 3k? How much is a new boiler / new roof etc? Do you drive… what is your needed a new car or big repair bill on short notice? What other savings do you have?

if 5k is your only savings or is it your only easy access savings?

sorry too many questions!

Don’t see an issue with putting it in your ISA. You can just withdraw it again if you need it.

Voted yabu because if you're depleting savings for investment rather than just putting spare money into Stocks and Shares, its unclear to me how you will replenish the emergency fund I.e. you don't appear to have earmarked surplus monthly income for savings. I'd do that first.

3k seems very low.

I wouldn't. I would get it to six months expenses and then save regularly into a S&S ISA if that's what you want to prioritise.

Emergency funds should cover at least 3 months of full bills and ideally 6 months worth.

I'd be increasing it not depleting it at that level.

How easily could you access your ISA? I would say to keep the £5k. If your home has major maintenance requirements it could be eaten into very quickly.

Investing is for long term rather than short term savings, because its too volatile. Are you saving for anything else - replacing cars, house repairs etc? We've been quoted around £3k for a new boiler.

No you need at least 6 months expenses in your emergency fund, keep saving until you hit that target then you can divert your savings into isa etc.