The typical argument for investing early is compelling: time in the market, compound growth, the cost of waiting. All of it is true. And yet — put money in a Stocks and Shares ISA before you have an emergency fund and you've created a problem.
A job loss, a car breakdown, a boiler failure, an unexpected medical bill. Life produces expensive surprises at irregular intervals. Without cash available, these become debt — you put £1,200 on a credit card at 24.9% APR and now you're paying it off for two years. Or you sell investments at exactly the wrong time because you have no other option.
With three to six months of essential expenses in an easy-access account, the same event is an inconvenience. You cover it, replenish the fund over the following months, and move on.
Markets fall — sometimes by 30 or 40 percent. Without an emergency fund, a job loss during a market downturn forces you to sell investments at a loss to cover bills. With one, you leave the investments alone and wait for recovery. The emergency fund is what allows a long-term investing strategy to stay long-term.
Rent or mortgage, food, utilities, travel to work. Not holidays, meals out or subscriptions. The fund covers survival, not lifestyle. Three months is the minimum. Six is the target for most people.
Keep it in an easy-access savings account paying a decent rate — not in a current account where it'll get spent, and not in the market where it'll fluctuate. Start with £1,000 if six months feels overwhelming. Something beats nothing. Once the fund is in place, you can invest knowing you won't be forced to sell at the worst moment.