🎓 How Much Cash Do You Really Need? Vanguard Says UK Savers Are Overholding by £17,000
Vanguard's UK research finds the average British saver holds around £17,000 more in cash than they actually need for emergencies. While cash provides a buffer for unexpected costs and short-term goals, Vanguard notes that excess cash loses purchasing power to inflation over time and historically underperforms equities over the long run. The firm recommends keeping the greater of £2,000 or half a month's expenses for one-off costs, plus 3-6 months' expenses for income shocks, then investing anything beyond that toward longer-term goals like retirement.
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