Financial Crisis Simulator: How Long Will Your Savings Last?
A job loss, business failure, or unexpected medical bill can drain savings fast. The financial crisis simulator answers one question: given your current savings and monthly outgoings, how many months can you survive without income? The maths is straightforward — but most people have never run the numbers.
The Core Formula
Survival runway is determined by two variables: liquid savings and net monthly burn rate.
Runway (months) = Liquid Savings ÷ Monthly Burn Rate Monthly Burn Rate = Essential Expenses − Passive/Reduced Income
What Counts as Liquid Savings?
- Current accounts and instant-access savings
- Premium Bonds (accessible within days)
- Easy-access ISAs
- Not: pension funds (before age 55/57), fixed-term bonds with penalty, property equity
What Counts as Essential Monthly Burn?
| Category | Example Monthly Cost | Reducible? |
|---|---|---|
| Rent / mortgage | £1,200 | Partially (mortgage holidays) |
| Utilities + council tax | £280 | Slightly |
| Food | £350 | Yes — down to ~£200 |
| Transport | £180 | Yes |
| Insurance (health, home) | £90 | Minimal |
| Debt minimums | £150 | No |
| Total | £2,250 |
What-If Scenarios
Scenario 1: Typical UK household
Savings: £8,000 | Monthly burn: £2,250 | Universal Credit: £700/month
Net burn: £1,550/month → Runway: 5.2 months
Scenario 2: Aggressive cost-cutter
Same savings, but reduces burn to £1,400 (cuts subscriptions, food, transport)
Net burn: £700/month → Runway: 11.4 months
Lesson: reducing monthly outgoings has a bigger impact than increasing savings when time is short.
Scenario 3: High earner, low savings
Savings: £3,000 | Burn: £4,200/month | No benefits eligible
Runway: 0.7 months — under 3 weeks. Common profile: high income, lifestyle inflation, no buffer.
The 3-6-9 Month Framework
| Runway | Risk Level | Recommended Action |
|---|---|---|
| Under 1 month | Critical | Immediate cost cuts + seek income urgently |
| 1–3 months | High | Cut discretionary spend, activate benefits |
| 3–6 months | Moderate | Job search runway is adequate for most roles |
| 6–12 months | Comfortable | Time to be selective; rebuild while searching |
| 12+ months | Resilient | Can weather most crisis scenarios |
Building Your Buffer
The standard advice is 3–6 months of expenses in liquid savings. For freelancers, contractors, or anyone with variable income, 6–12 months is more appropriate. The simulator helps you find your specific number — not a rule of thumb.
Frequently Asked Questions
→ Run your crisis simulation with the Financial Crisis Calculator
Indicative only. Does not account for all benefit entitlements, tax implications, or individual circumstances. Consult a financial adviser for personal guidance.