The short answer
- The classic target is 25 times your yearly spending, which is the same as withdrawing 4% a year.
- Spending £30,000 a year, that is £750,000 without the State Pension.
- Counting the full new State Pension (£12,547.60 a year from 67), the target in our example falls to about £529,599.
- Saving £1,000 a month from £50,000 at 35, with a 4% real return, gets there at 58.
What FIRE means
Financial independence means you have enough money invested that you no longer need to work for income. Retiring early is optional: many people who reach financial independence keep working, but part-time, in a lower-paid job they enjoy, or on their own terms.
The approach usually combines three things: a high savings rate, low-cost investing, and spending that is planned and controlled. The calculator brings these together to show the age at which your savings could support your spending.
Your FI number
Your FI number is the size of pot that can pay for your spending each year without running out. With a 4% withdrawal rate, divide your yearly spending by 0.04, or multiply it by 25.
| Withdrawal rate | Multiple of spending | Pot needed |
|---|---|---|
| 4% | 25× | £750,000 |
| 3.5% | 28.6× | £857,143 |
| 3% | 33.3× | £1,000,000 |
Use your spending in today’s money, after tax. The calculator works entirely in today’s money, using a return above inflation, so the target is something you can picture now.
The safe withdrawal rate
The 4% rule comes from US research in the 1990s, often called the Trinity Study. It found that, historically, withdrawing 4% of a mixed share and bond portfolio in the first year, then raising the amount with inflation, usually lasted at least 30 years.
- Length
- Early retirements can last 40 to 50 years, not 30
- Markets
- UK and global returns have often been lower than US returns
- Charges
- Fund and platform fees come out of the return
- Flexibility
- Cutting spending after bad years helps a lot
- State Pension
- Reduces what the pot must pay from your late 60s
- Other income
- Part-time work or a partner's income
Many UK planners use 3% to 3.5% for a long early retirement. Try several rates in the calculator’s “More options”.
A worked example
- Spending not covered by the State Pension: £30,000 − £12,548£17,452
- Pot for that, at 4%: £17,452 × 25£436,300
- Plus a bridge to cover the State Pension for 9 years until 67£93,299
- Target at age 58£529,599
This assumes a 4% real return, a 4% withdrawal rate and the full new State Pension from 67. Without counting the State Pension, the target is £750,000 and it takes 28 years, to age 63.
How the State Pension helps
The full new State Pension is £241.30 a week (£12,547.60 a year) in 2026/27, and it rises each April under the triple lock. It is paid from State Pension age, currently 66, rising to 67 between 2026 and 2028 and to 68 later.
Because it covers part of your spending for life, it cuts the pot you need. But if you stop work long before State Pension age, the pot must also cover the full spending until it starts. The calculator adds this “bridge”: the further you are from State Pension age, the bigger it is.
Check your forecast
You need 35 qualifying years of National Insurance for the full new State Pension and at least 10 for any. If you stop working early, you may need to pay voluntary contributions to fill gaps. Check your forecast on GOV.UK. The State Pension age calculator shows your date.
What makes the biggest difference
Saving more brings the date forward, but each extra pound helps a little less, because the target also rises as you retire further from State Pension age. The return and withdrawal rate matter too:
| Change from the example | FI age |
|---|---|
| As in the example | 58 |
| 3% real return | 60 |
| 5% real return | 56 |
| 3.5% withdrawal rate | 59 |
| 3% withdrawal rate | 61 |
| 4.5% withdrawal rate | 56 |
Spending is the strongest lever
Cutting spending works twice: you save more now, and you need a smaller pot later.
| Spending a year | Target | FI age |
|---|---|---|
| £20,000 | £332,513 | 51 |
| £25,000 | £436,600 | 54 |
| £30,000 | £529,599 | 58 |
| £40,000 | £731,848 | 63 |
Housing is the biggest cost for most people. Paying off a mortgage before you stop work can cut the spending you need to cover, and with it your target.
What return to assume
The calculator uses a real return, meaning after inflation and charges. Over long periods, a global share fund has historically returned roughly 4% to 5% a year above inflation, while a mix of shares and bonds has returned less. These figures are not guaranteed and vary a lot from decade to decade. A 4% real return is a common middle assumption; test 3% to see a cautious case.
At 4% real, £50,000 grows to about £109,556 in today’s money over 20 years with nothing added.
When you can reach your money
- Any ageISAs and general investment accounts
You can withdraw at any time.
- 60Lifetime ISA
Withdraw without the 25% charge from 60, or earlier for a first home.
- 55, or 57 from April 2028Private and workplace pensions
The normal minimum pension age rises to 57 on 6 April 2028.
- 66 to 68State Pension
Depends on your date of birth.
Pensions, ISAs and the bridge
Pensions give tax relief on the way in, and employers often add to them, which makes them powerful. But you cannot touch them until the minimum pension age. ISAs give no relief on the way in, but are tax-free and accessible at any time.
A common FIRE plan uses both: pensions for life after 57, and ISAs to bridge the years from stopping work to that age. If you plan to stop at 50, your ISAs and other savings need to cover seven years of spending, plus any gap until the State Pension. The pension tax relief calculator shows how much relief you get.
Tax in early retirement
- Withdrawals from ISAs are tax-free.
- Usually 25% of a pension can be taken tax-free, up to £268,275 in total. The rest is taxed as income.
- The Personal Allowance (£12,570) means a modest pension income can be taxed lightly, especially before the State Pension starts.
- Gains and dividends outside an ISA or pension are taxed above the £3,000 and £500 allowances.
The calculator does not model tax. Enter your spending after tax, and remember that pension withdrawals above your allowances will need a little extra to cover the tax.
Coast FI and other flavours
Coast FI is the pot that, with no more saving, would grow to cover your retirement at State Pension age. In our example it is £124,371 at 35. Once you pass it, you only need to earn enough to cover today’s spending.
- Lean FIRE: a lower spending target, for a simple lifestyle.
- Fat FIRE: a higher target, with more room for travel and treats.
- Barista FIRE: part-time work covers some spending, so the pot can be smaller.
Risks to plan for
- Sequence of returns: a market fall in the first few years of withdrawals does lasting damage. Some people hold one to two years of spending in cash.
- Inflation: a burst of high inflation raises your spending faster than expected.
- Rule changes: pension ages, tax allowances and the State Pension can all change.
- Health and care costs: later life can bring costs that are hard to predict.
- Lost work options: returning to work after a long break can be harder than expected.
Getting started
- Track your spending for a few months to find your real yearly figure.
- Clear expensive debt and build an emergency fund.
- Take any employer pension match in full.
- Use your £20,000 ISA allowance for money you may need before 57.
- Invest in low-cost, diversified funds and keep charges low.
- Recheck your plan every year with this calculator.
Your savings rate
The share of your take-home pay that you save is the single best guide to how long FIRE will take. It matters more than your income, because a higher savings rate means both more going in and less spending to replace.
| Savings rate | Years to FI |
|---|---|
| 10% | 59 |
| 20% | 41 |
| 30% | 31 |
| 50% | 18 |
| 70% | 9 |
The table holds for any income, because it compares spending with saving. Going from 20% to 30% saves about ten years; going from 30% to 50% saves another thirteen. Even small rises, such as saving half of every pay rise, add up.
Drawing an income
Once you reach your number, you need a plan for turning the pot into income. The simplest is to take your withdrawal rate from the pot in the first year, then raise that amount with inflation each year. More flexible plans adjust the amount to how markets have done.
- Fixed real withdrawals: steady and easy to budget, but they ignore how markets are doing.
- Guardrails: cut spending by, say, 10% after a bad year and raise it after a good one. This makes the pot last much longer.
- Cash buffer: hold a year or two of spending in cash, so you are not forced to sell after a fall.
- Annuity later: some people buy a guaranteed income for life with part of the pot in their 70s.
Take free, impartial guidance from Pension Wise before you take money from a defined contribution pension, especially the first time.
Common mistakes
- Underestimating spending. Include irregular costs such as car replacement, home repairs and holidays.
- Mixing today’s money and future pounds. Use a real return if you enter spending in today’s prices.
- Forgetting the pension access age. Money locked in a pension cannot fund your fifties.
- Assuming a full State Pension. Stopping work early may leave gaps in your National Insurance record.
- Ignoring charges. A 1% yearly charge can take a fifth or more of a pot over 25 years.