Freedom Isn’t Free UK Personal Finance
FIRE
Calculating Your FIRE Number: The Rule of 25 Explained
Picking one FIRE number is how people end up trapped on the wrong side of it. The pair you actually need draws a line between surviving and living. Most plans confuse the two.
FIRE number by UK lifestyle tier (Rule of 25)
| Lifestyle | Annual spend | FIRE number (25x) | Safer (30x) |
|---|---|---|---|
| Minimalist | £18,000 | £450,000 | £540,000 |
| Median UK life | £30,000 | £750,000 | £900,000 |
| Comfortable | £40,000 | £1,000,000 | £1,200,000 |
| Sovereign | £50,000 | £1,250,000 | £1,500,000 |
25x is the 4% rule. 30x (3.3% withdrawal) is the safer rate for early retirees.
Key takeaways
1
Calculate your FI number using the Rule of 25 by multiplying your annual expenses by 25.
2
Consider two lifestyle targets: Lean FI (minimum survival costs) and Standard FI (current lifestyle).
3
Adjust your calculations for the UK context, aiming for a 3.3% withdrawal rate if planning to retire early.
4
Use tools like ISAs, SIPPs, and low-cost index funds to maximise your savings and reach your FI number faster.