Which? How to prepare for a financial disaster
Jul 3, 2025
Sam Richardson, Deputy Editor at Which? Money, and Sarah Cole, Head of Personal Finance at Hargreaves Lansdown, delve into essential financial preparedness strategies. They discuss the vital role of emergency funds in navigating unexpected events like job loss or car troubles. The conversation highlights misconceptions about financial security, stresses the significance of diversified retirement planning, and underscores the pitfalls of panic selling during market volatility. They also provide insights on critical insurance coverage and the need for wills to secure your financial future.
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Emergency Fund Essentials
- Aim to have three months' worth of expenses saved in an emergency fund, not income.
- Keep the fund separate and accessible to protect your credit rating and avoid disrupting investments.
Retirement Savings Cushion
- In retirement, keep one to three years of essential spending in savings to avoid selling investments during downturns.
- This cushion helps you ride out market shocks without permanently losing value.
Mortgage Timing Strategy
- If you have a mortgage deal ending, talk to a broker early to understand options before rates change.
- Lock in remortgage deals a few months early to hedge against rate rises or fall back if rates drop.