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As has been said by others I have seen many a reckless contractor in my 10 years in the contract market.
Met one guy, who spent it all and didn't have a pension pot set up. He said something about how his home will be his mortgage.
Many folks don't know how to cut their cloth accordingly. A friend of mine sweats at renewal time due to a big mortgage, new car and a wife that doesn't work. My outgoings are moderate but this is subjective right (childcare + school + mortgage + decent pension contribution) however we prioritised school over mortgage, so we don't live in a particularly flashy house. Got our pre-marital flats on the rental market so should be covered there.
I am on a rate abut 60% higher than when I started out 10 years ago and my war chest is OK. I haven't calculated precisely but I'm pretty sure I could go 18 months + but I'd stop (or lower) the pension contributions after a few months.
0.5% from HMRC.
0.65% from nationwide instant access savings.
you can get more than 1% with a 3 month notice account.... On £20k CT the difference is between £75 and £150. I'll just pay early.
If you have more money washing around then a savings account is worthwhile assuming it's not a pain in the arse to setup.
EDIT: Zopa does 5% but it's harder to get out and not guaranteed safe. Although in the past 7 years I've used them I've not lost s single penny to bad debt.
Aldermore is 1% with payments taking 2 hours on weekdays.
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