UK FIRE Calculator
What is FIRE?
FIRE stands for Financial Independence, Retire Early. It is a movement centred on aggressive saving and investing — often 40–70% of income — to build a portfolio large enough to live off investment returns indefinitely, without needing to work.
The core principle is simple: if you have a portfolio worth 25 times your annual expenses and withdraw no more than 4% per year, historical data suggests your money will last 30+ years. This is the famous 4% Safe Withdrawal Rate, derived from the Trinity Study.
In the UK, FIRE is adapted for our specific tax wrappers (ISAs and SIPPs), the state pension system, and UK market conditions. The UK FIRE community — active on forums like Reddit's r/FIREUK and Monevator blog — has developed strategies tailored to British investors.
Lean FIRE
Bare minimum lifestyle. ~£15,000–£20,000/year expenses. Requires discipline and frugality.
Fat FIRE
Luxurious retirement with large buffer. 150%+ of normal expenses. Greater peace of mind.
The 4% Rule and UK Adjustments
The 4% rule was developed by financial planner William Bengen in 1994 and later validated by the Trinity Study (1998). It states that retirees can withdraw 4% of their portfolio in the first year of retirement, adjust withdrawals for inflation annually, and have a very high probability of not running out of money over 30 years.
UK-Specific Considerations
- Sequence of returns risk: Early bad years in retirement are devastating. UK FIRE practitioners often hold 1–3 years of expenses in cash/bonds as a buffer.
- State pension: The UK state pension (£11,502/year in 2025/26) significantly reduces withdrawal needs from age 67. This can support a higher effective withdrawal rate in early years.
- Valuation-adjusted rates: Some UK FIRE planners use 3.25–3.5% withdrawal rates for very early retirement (before 50) to account for longer time horizons.
- Geographic portfolio: The original Trinity Study used US market returns. UK-focused investors should use globally diversified portfolios (e.g. Vanguard FTSE All-World) rather than UK-only funds.
| Withdrawal Rate | FIRE Multiple | 30yr Success Rate | 40yr Success Rate |
|---|---|---|---|
| 3.0% | 33x expenses | ~99% | ~97% |
| 3.5% | 28.6x expenses | ~98% | ~93% |
| 4.0% | 25x expenses | ~95% | ~85% |
| 4.5% | 22x expenses | ~88% | ~75% |
| 5.0% | 20x expenses | ~78% | ~60% |
UK Tax Wrappers for FIRE
Stocks and Shares ISA (Most Important for FIRE)
The Stocks and Shares ISA is the cornerstone of UK FIRE strategy. You can invest up to £20,000 per year (2025/26 allowance). All growth, dividends, and withdrawals are completely tax-free — forever. There is no minimum access age, making ISAs essential for bridging the gap between FIRE and age 57 (SIPP minimum access age).
Many UK FIRE investors fill their ISA allowance every year before investing in any other vehicle. Over 20 years, a couple can shelter up to £800,000 in ISAs (20 years × £20,000 × 2 people).
Self-Invested Personal Pension (SIPP)
SIPPs offer powerful tax relief on contributions but cannot be accessed until age 57 (rising from 55 in April 2028). Basic-rate taxpayers receive 20% relief (government adds 25% on contributions). Higher-rate taxpayers can claim an additional 20–25% via self-assessment.
The optimal FIRE strategy typically involves maximising ISA contributions first, then adding to a SIPP up to annual allowance (£60,000 or 100% of earnings, whichever is lower). SIPPs are drawn down from age 57, with the first 25% (up to £268,275 lifetime) available tax-free.
Withdrawal Sequencing for UK FIRE
- Pre-57 (FIRE to 57): Draw from ISA holdings (tax-free, no restrictions)
- Age 57–67 (SIPP access to state pension): Mix ISA and SIPP withdrawals, managing income within personal allowance (£12,570) and basic rate band
- Age 67+ (State pension): State pension provides £11,502/year, reducing SIPP/ISA withdrawals needed
Savings Rate and FIRE Timeline
The most important variable in reaching FIRE is not investment returns — it is your savings rate. A higher savings rate does two things simultaneously: it grows your portfolio faster and it reduces your expenses (meaning your FIRE number is lower).
| Savings Rate | Years to FIRE (7% return, 2.5% inflation) | Starting from zero |
|---|---|---|
| 10% | ~43 years | From age 25: FIRE at 68 |
| 20% | ~37 years | From age 25: FIRE at 62 |
| 30% | ~28 years | From age 25: FIRE at 53 |
| 40% | ~22 years | From age 25: FIRE at 47 |
| 50% | ~17 years | From age 25: FIRE at 42 |
| 60% | ~12 years | From age 25: FIRE at 37 |
| 70% | ~8 years | From age 25: FIRE at 33 |
ISA Allowance Maximisation Strategy
The £20,000 ISA allowance is the most tax-efficient investment vehicle available to UK investors. For couples, that's £40,000 per year sheltered from all future taxes. Over a 15-year FIRE journey, a dual-income couple could amass up to £600,000 in ISA assets before their portfolio growth is even counted.
ISA Contribution Examples
| Scenario | Annual ISA Contribution | 10-Year ISA Pot (7% return) |
|---|---|---|
| Single person, full ISA | £20,000 | ~£276,000 |
| Couple, both max ISAs | £40,000 | ~£553,000 |
| Single person, half ISA | £10,000 | ~£138,000 |
State Pension and FIRE
The UK State Pension is £221.20 per week (£11,502 per year) for the full new State Pension in 2025/26. You need 35 qualifying National Insurance years for the full amount and at least 10 years for any pension at all.
For UK FIRE planners, the state pension is a powerful late-stage income boost. From age 67, the state pension alone covers a significant portion of typical retirement expenses. For someone with £25,000/year expenses, the state pension covers 46% — meaning the portfolio only needs to provide £13,498/year from age 67.