r/FIREUK

I've been doing a lot of modelling of drawdown pension to see how much I need. The basic principle is fine: decide how confident you want to be based on historical data, run some simulations and pick something that gives you ~90->95% chance of success.

The fundamental problem is this: "Success" is defined as "Dying before the money runs out" - the "Success" cases include a number of cases where you almost ran out, but died "just in time". In reality I think this would be hard to actually experience your pot almost running-dry late in life.

The other possibility is "just buy an annuity" - which gives you peace-of-mind, but requires more money / working longer.

However, I've been wondering about a half-way house- buying an annuity later in life.

To put some hard-numbers out there for explanation. A single 60 year old person with a pot of £500,000 fully invested in global equities could drawdown (in real-terms) ~£19,400 a year (~3.8%) and have ~95% chance of "Success" - assuming ONS mortality rates.

The problem here is that if you actually lived to 110 (unlikely) there's "only" a 78% chance of having enough money. This is an extreme example, but the point is I don't want to be 90 and have £20K in the pension - even if I did die next year.

So, I tested the approach of using a slightly larger pot and then finding the optimum age to buy an annuity to cover the £19,400 indefinitely (the trade off is that the longer you wait to buy the annuity, the cheaper it will be).

This approach is gives a nice half-way house between buying an annuity at 60 (expensive) and running out of money late in life because of drawdown (longevity)

What my modeling said was interesting - for a 95% chance of "Success" - assuming that you live for ever! the optimal approach to give you the same £19,4000 a year is:

1. Increase the starting pot from £500,000 -> £555,000.
2. Buy an annuity at age 75.

Buying it earlier means that the annuity is more expensive, and (on average) your extra pot will have grown less. Buying it later increases the risk that the money will have run out altogether.

(usual caveats - I had to make assumptions about annuity rate being linked to interest rates, and used historical estimates built around how annuities are priced etc.)

I an 21 and just finished my first year of university on an allied health course. I fund my whole life via camming and other SW that I earn a lot of money from, for context I would probably earn more doing SW for a year than I would using my degree for 6 years.

I am not passionate about this degree and I am only doing it because people I speak to are insistent I have a safety net for the future considering the volatile nature and high burn out rate of SW

I know people say that you have a degree for life, but I am also concerned about taking on £40k worth of debt that will only continue to accrue interest after I graduate, and I will most certainly pay a good chunk back of considering my high income. The state of the job market for NHS work is also dismal and it is increasingly hard to get a newly qualified band 5 job. i don’t even want to work full time in the future, only part time. If i left uni now, I would gain an exit award and qualification that could allow me to work some lower paid small job in the future.

Is it a good plan to leave uni now and focus on my job, work fulltime, save as much money as possible and invest all the money into an ISA and premium bonds so that I have some kind of set up for my future? Or should I just stay in uni and continue the course even though I don’t enjoy it that much and I am losing out on learning significant money? I am so torn and scared of regret.

Can't really talk about this with anyone in real life, so posting here!

Early 40s, married, three young kids (6 and under). I own and run a small creative services company I founded years ago, no outside investment. Wife and I both work in the business.

Personal:

• My S&S Stocks ISA: £370k
• My SIPP (employer funded): £187k
• Wife's Stocks ISA: £274k
• Wife's pension (employer funded): £177k
• Junior ISAs for the kids: £28k combined

(Vanguard Target Retirement Fund 2050 mixed with S&P 500)

Property:

• House worth £1.7m to £2m, mortgage £750k at 3.7%, 30 years left

Company:

• Turnover roughly £1.2m to £1.5m a year, profit is around 40-50% depending on the year. Lumpy and heavily dependent on me personally, so I don't treat it as guaranteed
• Roughly £1.2m cash sitting in the business earning around 3.8%
• I need to keep around £300k as working capital and safety float, so realistically £700k to £1m is surplus
• I've deliberately left it in the company to avoid drawing it as income and getting hammered on tax

Current thinking:

Plan is to push a lot of the surplus company cash into pensions via employer contributions (using carry forward where possible) since that seems like the most tax efficient extraction route by far. We max ISAs where we can.

Questions:

1. If this were you, what would your route to FIRE look like? The business income is good but lumpy and depends heavily on me personally (I work wild, wild hours), so I don't treat it as guaranteed.
2. Is loading up pensions the right call when I'm 15+ years from access age, or would you prioritise bridge assets (ISA/GIA) given FIRE is the goal?
3. Would you touch the mortgage at 3.7%, or is a future downsize the more sensible lever given the equity?
4. Anything obvious I'm missing? Feels like I've accumulated reasonably well but without an actual plan or target number.

I know this is a fortunate position, I have worked my nuts off and skipped alot of fun over the last 20 years, so its well earnt. I just have no one I can sanity check this with and I'd rather hear from people who think about this stuff properly!

Yearly Outgoings 120-140k that is included mortgage, school fees, food etc.

Thanks everyone!

If I understand correctly, from next year we will be unable to transfer from S&S ISAs into cash ISAs.

My FIRE plan has a lot of flex but there is potential for me to hit my number at some point in the next few years. This would include having a sizable ISA bridge.

My aim had been to transfer 3 years' worth of expenses from my S&S ISA to a cash ISA upon retirement, to draw from during downturns in my S&S ISA. However, after next year these changes mean I won't be able to do that.

I'm considering moving 3 years expenses to a cash ISA right now. (Encouraged also by the market having boosted my S&S ISA significantly in the last two years.)

My question is whether this is worth considering, or is a cash ISA not actually that useful for bridging to SIPP access? Does it even matter that we can't transfer into cash ISAs after next year? Perhaps a bond ladder works just as well and can be kept inside the ISA wrapper even after next year. Or maybe cash ISA interest rates are not that competitive against other cash savings accounts, even after tax (I'm a higher rate taxpayer).

Any other general guidance or advice about the above is also welcome.

I’m looking to move to Edinburgh from London this or next year but slightly worried about its impact on my FI.

I’m 26M, work at a big 4 firm, used to do tax advisory work and pivoted into a transactions role within the same firm.

I earn around £60k plus bonus at the moment in London.

In my move to Edinburgh I’ll either be looking to move back to my old tax advisory team (new team doesn’t have a base there) or will be looking at a new role all together.

If I were to rejoin my old team I’d probably drop my salary down to £40k - a double whammy of regional pay and the fact that tax pays less than transactions. If I was promoted in that team this could rise to £60k (but would’ve been £80k or so in London). Speaking to recruiters (as I’m unsure if I should rejoin my old team) the trend from various calls I’ve had as been that £60k as an asking salary is too much.

So I’m initially worried about the first salary drop plus any further promotions will be 20% lower compared to if I stayed in London.

The move is primarily for my quality of life as I wouldn’t buy or raise children in London.

I’m currently in a good financial position at the moment of having a NW of c.£120k (£25k pension, £25k LISA, £55k S&S and residual cash) but I’m worried about the longer term impact especially when I decide to purchase a property and have kids. So I would value people’s opinions on whether this is the right move long term.

(Note: in case relevant, the move is also conflicted about how to get back to Edinburgh. I initially moved away from tax as I wanted a more mathematical (rather than legal role) but after a year in the transactions role am finding it too audit heavy and less enjoyable than tax. I fear that moving back to tax although would be an easy way to get to Edinburgh but would pigeonhole myself in tax. However the alternative is to find a whole new job perhaps in finance losing my old stable client base, nice hours and great team back in tax.)

Hey guys, I’ve been following FIREUK for a few years as I’ve always been interested in this concept / idea

Context:
I am currently 23 years old, just graduated from uni and going into my Grad Role while living at home with my parents. I wanted some thoughts on my current situation and whether I am in a good position / what else would you do?

I have been investing into my Stocks and Shares ISA since I was 18 years old. Over the years I have managed to build a portfolio of £55,000. (Portfolio ATH was £69,000 a few months ago!)

I have also been maximising my allowance for the Lifetime ISA for my first house. In this account I have £26,900. I live in the East Midlands so property prices here are much less than the 450k limit.

In terms of cash I have roughly £2,000 because I’ve been enjoying my graduation summer being on holiday etc! One thing I can take away from this subreddit is to make sure I’m experiencing life as well as investing for the future - maintaining a stable balance

Summary:
S&S ISA: £55,000
LISA: £26,900
Cash: £2,000
Pension: £5,000

I will be working from September as an engineer. Yearly Income of £36,000 and progresses every 2 years. Within 5 years I suspect I will be on £47,000

This is my salary breakdown:
£1,000 a month into my S&S ISA
£333 a month into LISA
Maximise pension contribution (5% from me will trigger 10% company contribution)
£200 to my parents
£500 to live off - may not need all of this, if so it’ll go towards my holiday money pot

Company gives a yearly bonus of 10% of the salary (+ department / individual performance multipliers)

My parents have always supported me and shown me love over the years. So whilst this isn’t the best financial decision, I would like to give mum and dad £100 each for either their own spending or towards their mortgage

I also tutor as a side hustle, used to bring me in a lot of money during uni but as of now it brings in £150 a month - enough money to pay for my monthly fuel allowance!

This is probably a lot to take in with a lot of unusual cases for example living at home etc so please feel free to ask any questions!

There’s a lot of tough thinking to do here but maybe you guys can help me out.
I can’t help to think that while I’m at home, I will be able to secure a good future / save and invest a lot

I plan to at least live at home for another 2 years while I’m on my grad scheme. After the grad scheme I will be on surplus £42,000 + 10% yearly bonus
In terms of my first property, i would like to avoid using my S&S ISA as I believe this compounding over the years will bring greater returns than using it for my first house

Any advice or guidance would be great. I’m aware that I’m young and have a lot to learn so I’m relying on this great subreddit to help me navigate what is the best way to secure FIRE :)

Hi all, just read a post about people constantly bragging in this subreddit so I’ll share my humble situation.

I’ll start with some details for context

Salary: £50k

Expected to raise to £66k next year and £85k 2 years after that ( very safe job, high probability of achieving those salaries as per development plan)

I have:
£10k in S&S ISA
£1000 savings
£3.5k pension
£4000 in Sharesave (SAYE)

£3.5k in CC debt (0% interest till 2027, paying off £500 a month so I finish it off before 0% interest promotional offer ends).

At the moment I’m putting in monthly £500 into the S&S ISA, £500 into CC debt and £250 into Sharesave. The rest goes on living expenses. My £1000 emergency fund is low but I’m happy to be risk taking due to my age and having less responsibilities, as well as I have a few safety nets I wouldn’t want to personally disclose here.

I just always thought i’d be further ahead (financially) by this age than I actually am. I only started working 2 years ago as I spent more time than expected in academia, during which I worked jobs and paid off student loans so I have 0 student loan debt.

Everyone around me is buying a house, has more in savings / investments and goes on holidays every few months (I’m not doing any of these). I don’t want to compare so this isn’t a plea in terms of “why is everyone doing better than me” but more “I feel so left behind, I thought I’d be ahead by now, by my own standards”.

Can someone help ground me and let me know how I’m doing?

Thanks

First time poster. I am a high earner (over £150k) but partner works part time so has low income. Age is 39. Starting quite late with this but starting to regularly contribute to a savings and investment ISA. Have regularly contributed to my work pension up to the maximum amount the employer will match my contribution.

I got approached about 18 months ago about transferring my pension into a SIPP. We decided not to at that stage but wondered how many people typically go down this route and is it worth it?

Hi All,

First time poster and I've asked similar questions before on other threads but get alot of hate because we invested in property.

Situation

M34 F28, both work in recruitment last 6-10 years.

Both worked hard earned about 150-200k a year in jobs before tax.

We saved and just kept buying properties.

Own 5 BTLs that we use for short term let. They have mortgages on them but we clear somewhere between 6-10k a month after mortgages and expenses. But only because they are on short term let.

If we switched them to long term rent we would only earn about 3k a month.

Next steps

Can't decide for next steps, because we earn well in jobs should we keep working to maybe buy a few more properties or should we quit and just live off property money.

Jobs are good but burnout is real and they are high stress so would value time off but don't want to give up careers if we have to end up working again in a few years.

I know we aren't quite FIRE but potentially have enough to never work again and just live on property income.

Anyone in a similar situation or who has done this in the past?

Would welcome any advice!

Thanks

Edit: SINK - Single income no kids

I (56m) have managed over the years to build up quite a large pension, its now just over £1 million.

However, most of it is in 2 funds:

1. 80% VWRP
2. 20% L&G Global Technology Index

Both have done amazingly for me over the last 20 years.

My issue is that being this heavily invested in equities is risky as I approach retirement and may need to start drawing money out to live in.

To be clear though, I do not have retirement planned yet but I do know that in the run up you should be moving some out of equities.

I consider myself financially literate but when it comes to making changes at this level, I feel I need some outside validation. Here's a few thing I have been thinking about:

1. 100% equities the day I start drawing from my pension is a bad idea
2. 100% equities when there is a downturn is painful
3. Having a mix of equities and bonds was gospel but in recent years has not been the hedge people thought it would be (inflation? Or was it Liz Truss?)
4. Some articles have talked about buying GILTS instead of bonds, as they are more predictable and can be used to provide an income at the time I need it (say the first 3 years of income from date managed GILTS I had bought in advance).

Any insight would be appreciated.

Hey all!

I’m feeling quite proud of myself, so I wanted to share my progress. If you have any advice, or suggestions, please go ahead!

DISCLAIMER: I am in a good position, I am very grateful for it. I hope that I can inspire instead of discourage. I also think I am addicted to saving which is why I’ve been able to save so aggressively.

NW breakdown:
HYSA: 84k (will all go on deposit)
Vanguard S&S ISA (maxed out last 3 years): 79k
Pension: 9k
Current Accounts: 10k
Total: 182k

In the process of buying a one bed maisonette in LDN (I want to live below my means, plus it’s 65m2 with a garden so can’t complain about it being a one bed!)

(Anticipated) FAQs:
Q: WTF is your job? A: SWE! Engineering degree straight into fintech, I work at a bank. 3 years full time experience at this point.

Q: How did you manage to save so much? A: living very frugally. Have lived with parents until now (I pay rent of about 500 a month incl. household expenses.) I don’t drink, smoke, eat out etc (which has saved me lots!) I travel, but travel cheaply. I stay with friends or in affordable accommodation (can’t wait to have them stay with me once I complete on my property!)

Q: Why are you doing this? A: growing up in financially unstable household made me terrified of not having money. It means I feel back when I spend - I’m trying to spend more on purpose as exposure therapy. Also, it might be nice to retire early.

Q: Did your parents give you money? A: I’m lucky they let me live with them until now, though I’m moving. Very grateful. I paid rent to them too & of course help around the house (cooking most dinners, cleaning, laundry, taking care of the pets etc.) + frequent gifts. I’m ready to leave the nest now. I however haven’t gotten any cash (anything trust fund, to pocket money, to any gifts past slippers for example) since I was around 15.

Thanks for reading! I’m hoping the peeps of FIRE UK will appreciate what I’m trying to do!

Hello. I’m 31 earning 113 in cash and about 40 in stock per year depending on stock performance. I do expect a promotion this year which may take me to 170 or higher total.

I’m considering whether I should lower my pension contribution and save money outside of ISA. Currently I have no savings outside of isa.

Current financials:

1. pension 125k ish and contributing 20% of base this includes my employers contribution
2. stocks isa 110k
3. cash isa 40k - this is kinda my free cash emergency fund
4. liability: mortgage with 500k (slightly less) remaining on it with mortgage payment 2.6k of which I pay half

I’m considering if it’s worth it to lower pension contribution to consider if I could retire earlier in the future

I currently don’t have kids but likely will.

Other than the 20 percent a year in the pension which is about 22k and 20k a year in the ISA im basically paycheck to paycheck otherwise

I do realise I’m spending a bit too much but life is also for living!

Advice welcome. Should I leave it as is, change pension or something else?

First-time investor looking for some advice before getting started.
I’ve been doing a fair bit of research into different platforms and ETFs, and at the moment I’m leaning towards using Trading 212 rather than investing directly through Vanguard.
My plan is to invest for the long term, starting with a lump sum and then making regular monthly contributions. From what I’ve read so far, VWRP seems like it could suit that approach well because of its global diversification.
I’ve also looked at Vanguard’s LifeStrategy funds, particularly the 60% and 80% equity options, but I understand these have a greater weighting towards the UK. I’m wondering whether there is much reason to favour one of those over something like VWRP for a long-term investor.
For those with more experience, does this seem like a reasonable approach? Is there anything important I should be considering before deciding?
Thanks in advance!

Looking for a sense-check on our finances and what people here would prioritise over the next few years.

About us

• Both early 30s
• Me: Started a new role on £110k base + bonus
• Partner: works in healthcare, currently earns around £70k–£80k, and earnings excepted to increase materially over next few years
• One young child, and likely to have another in the next few years
• Based in the North of England
• We'd like the option of retiring or working significantly less somewhere around our mid-50s rather than necessarily pursuing very early FIRE
• Retirement spending target: roughly £50k-£60k in today's money for the household. Once mortgage paid off and children no longer financially dependent.

Current position

• House worth roughly £475k
• Mortgage: around £345k, fixed at just under 4%
• Mortgage payment around £1,500/month
• My pension: roughly £200k, employer matches 10%
• Partner has an NHS DB pension
• S&S ISAs: roughly £66k between us
• Cash reserves currently fairly low at around £3k, although I also have roughly £17k in Premium Bonds from a recent bonus
• Small personal loan: roughly £1,700 at 6%
• No other significant debt

The £100k childcare issue

A big part of my planning at the moment is the UK £100k threshold for Tax-Free Childcare / funded childcare.

I'm making fairly large pension contributions/salary sacrifice to stay below £100k while we're eligible.

My intention is also to put most/all of my bonus into pension where possible.

As a result, my pension could grow quite quickly over the next few years, but I'm conscious that this potentially creates an imbalance between pension wealth and accessible ISA/cash wealth.

House

At some point in the next few years we may move to a more expensive house, potentially somewhere in the £650k–£750k range.

This is one reason I'm questioning how much cash to retain versus investing or overpaying the mortgage.

What I'm currently thinking

My rough priority order is:

1. Build a proper cash emergency fund – probably £15k–£20k
2. Use pension contributions aggressively while they give me the additional childcare/tax benefit
3. Continue building ISAs so we have meaningful accessible assets before pension age
4. Avoid aggressive mortgage overpayments for now, particularly while the mortgage rate is below 4%
5. Once childcare stops being relevant, reassess the pension/ISA/mortgage split

Questions for the FIRE crowd

Does this overall approach make sense?

In particular:

• Would you prioritise building the cash reserve before adding anything further to the S&S ISA?
• Am I right to prioritise pension heavily while the £100k childcare cliff exists, even though I already have ~£200k in my pension in my early 30s?
• Would you bother with mortgage overpayments at a sub-4% rate, given our age and likely future house move?
• How much emphasis would you put on ISA assets to create a bridge between stopping work and pension access?
• How should I think about my partner's NHS pension alongside my DC pension when planning for FIRE?
• Are there any obvious holes in our FIRE planning?
• Given our current numbers, does retiring or significantly reducing work in our mid-50s look reasonably achievable without living particularly frugally?

I'm not trying to maximise net worth at the expense of enjoying our 30s/40s – we still want holidays, a nice house, etc. I'm more interested in building enough financial independence that work becomes increasingly optional later on.

Interested in what people would do differently.

Situation
Turning 31, ~£60k/year gross, renting in Scotland (£750/month). No ties keeping me there - originally from NI. Targetting a pay jump (~£90-120k+) in the next year or two, which would likely mean moving to elsewhere or getting a remote role from London etc. I save £1.5k right now. I’m done with renting with others and always wanted my own place - if I rent on my own, it’ll be the same price as buying on my own.

Net worth

**•** Cash ISA: £10k
**•** Stocks & Shares ISA: £5k
**•** LISA: £24k
**•** Pension: £30k
**• Total: \~£70k**

The property
2-bed, 2-bath flat in Belfast, £210-220k. Deposit from the LISA. Mortgage would be ~£950/month. Would live in it 1-2 years, then rent it out via an agency once/if I relocate for work.

Monthly budget (worst case)

**•** Net pay: £3,365
**•** All-in housing (mortgage + service charge + council tax + insurance + bills): £1,367
**•** Investing: £1,500
**•** Left over: \~£500/month - this is fine.

What I want opinions on
- Using a LISA on a property I’ll only live in short-term before renting it out - does that sit right with people?
- Any real red flags, versus general “leverage is scary” comments?
- Should I continue renting and saving until I’m partnered up and we want to buy together?
- the rental market for the property I want to buy is strong and the area and building is in demand

I've been stressing for too long now that i'm with SJP and everyone on here, on other forums and generally everywhere hate the place. So, exactly 1 year ago - i transferred £50k from my workplace pension to Vanguard (VWRP).

Over the last month (after fees) VWRP is up 23.7% and SJP (Polaris4) is up 22.39%. That has come as a surprise to me, i was expecting my experiment to be the final nail in the coffin and i'd move. There were times during the past 12 months where they were almost the same % increase.

Other than the fact that 1 year isn't a long enough period of time, is there anything else i'm missing here? I pay around 1.64% (slightly less after the shake up of fees the other year), i don't feel like i get any advice that's worth it - we sit and chat about the growth, which i track online anyway.

Putting hatred of SJP to one side, should i move? I plan to retire in next 5 or so years, i do worry about whether i'd use my advisor as part of my retirement planning (you know, drawdown 'vs' annuity ... how much can i take comfortably each year, tax free usage etc..).

Thoughts?

Hi friends,

I (28M) know I'll get a lot of hate for this post since I'm arguably in an amazing position, but I'm just questioning why I'm doing what I'm doing.

NW £725K broken down into:

Apartment: 365k

SIPP: 115K

S&S ISA: 40k

GIA: 120k

Cash: 10k

Crypto & other dubious investments: £75k

I'm saving so aggressively and working 75 hour weeks. For what? I don't even spend money regardless. I don't understand why I'm killing myself. All for what? To retire? And do what after retiring? I don't have all these luxurious plans and activities like all of the people that have FIRED. I don't know what I need to feel whole, but it's obviously not more money. Sorry for the rant

My situation: 45M, married with two kids. £230k in ISA, savings, and cash. £210k in SIPP and at least another £100k in company pensions, both defined benefit and defined contribution.

I also have a good chunk of my house paid off and a partner who can cover all the bills with her salary. Our annual combined personal and household expenses are around £42k. My partner (40) has higher discretionary spending than me and only around £20k in her pension. She only started earning okay money around 5 years ago.

I paid more than half the value of the house and she is happy to take over the mortgage payments and household expenses. My personal annual expenses are around £14k but I don't have any loans, car leases or anything so I could bring this down.

I'm fortunate that I am in a position to not be forced to jump into accepting the first thing. I will likely receive some redundancy but am unsure what are present. I am also unsure how much I have to work moving forwards. I work in a field that is quite exploitative and if I could find a job that would be two days a week, you can guarantee it would really be three plus. I'm thinking of doing something else instead, but all these variables are confusing the hell out of me and I'm not sure how to figure out figuring out moving forward.

Edit: My question is how much do I need to earn in this situation? I looked at 4% drawdown strategies and it seems like I can take around £9k a year. Obviously I have the pensions and state pension too from 57 and 67 (I think), so could probably take a bit more. I would also be keen to hear from others in the situation of their partner picking up the slack. It feels weird to me and worries me a little to feel reliant on someone else financially. I don't really want to retire early yet as I would get isolated quite quickly I feel without work, but Barista FIRE I guess.