How much do you need to retire in the U.K.?

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I’ve recently started to hear about FIRE (Financially Independent retire early - started in the USA)

They basically say you can retire once you have 25x your annual spending saved - so for example I spend £20k a year - I can retire when I hit £500k.

Ive found forums on other sites where people say they need 2 million to retire?! Is my number really low or is it the super rich that are on these other forums?

If your happy to share - what would be your fire number? (And would that just be for you or partner too?)

I'm not sure it's wise to retire with just cash. Id say most people's UK worth is tied into their homes via a mortgage. So I'd pay that off first, try to get a way to have regular income and max out any tax free savings accounts. No point having a fixed amount and prices keep going up. At one point I thought having 200k was great and could retire, now schooling costs alone will exceed that leaving me with no savings for retirement.

@NordicwithTeen Definitely

although I forgot to note - for FIRE - this needs to be invested in the stock market

Depends what kind of lifestyle you want when you retire
https://www.which.co.uk/money/pensions-and-retirement/planning-your-retirement/how-much-will-you-need-to-retire-aNmlv7V7sVe9

How long is a piece of string? It all depends on what you feel you can live off and what sort of retirement you want. There are all of the fixed costs like essential bills, you may still need to pay rent or a mortgage, house maintenance. On top of that are the luxuries or 'want to have' rather than 'need to have' - cars, holidays, nicer clothes, more expensive haircuts, beauty etc. The state pension is about £11,500 a year now and payable currently from 67.

There are lots of articles that tell you what you need for a basic retirement, comfortable retirement and luxurious retirement. Maybe look up the Which one.

Your number is quite low.

Housing is often something that is left out of FIRE.

If you own your own house PLUS 500k plus are entitled to state pension maybe.

Otherwise you could easily be paying 12k minimum just in rent for a room in a shared house.

Rent on a family house near me (I'm east Anglia) would be about 1600 a month. That'd easily eat up most of your 20k a year.

Dh and I retired at 53 and 52. We worked overseas and the goal was to retire early. Net worth when we retired was above the top figure in your poll. We also had more money in cash as we still had four years of private school fees to pay.

What age are you hoping to retire at?

Most retirement advice gives a huge range of required income and hence a huge variation in how much you need to have saved. Read here regularly and you will see one persons luxury living is another persons near poverty

Other factors if retiring yipping - if you have full state pension or not, mortgage or not

If I recall correctly, the latest advice was something like £60,000 per year for a couple while owning your own home mortgage free. This was for the good life. I can’t recall for more frugal retirements.

Thankfully I’m on track for more than £60,000 per year in retirement (DB rather than DC). Plus state pension, plus my OH’s pension. We’ll be very well off.

In that case I'm a bit screwed...

I’m retired. I spend 25k per annum. Obviously this would be reduced when we get state pension. No mortgage.

See that sounds fine, but then if you have building works, you'd be screwed.
I am a single income household and could retire with no mortgage and appx £20pa in passive income, but last year the boiler went (£9k) and the year before that the electrics needed a full rewire (£19k). I fully expect the roof to need work in the next 20yrs, but who knows how much that will cost by then!?

I'd put aside at least £50k for house repairs.

*Not you personally would be screwed, I meant someone with an income of £30k, as a single home owner.

I’m budgeting on £2k a month , half for bills and food and half for disposable but will aim to spend less than that

How many years do people generally allow for?

I think retiring early is always going to have a certain amount of uncertainty about it. You could invest and the stock market could crash. As said before, it really depends what you want to do in your retirement. A relative retired early on a so called inflation proof pension, only to find out 10 years down the line that inflation was slowly eating away at it.
From the other side, for us, retiring a few years later has really benefited our finances.

3k a month is enough for me. I have a DB pension which will pay out 48k a year plus state pension, so am happy with that.

I'm going to aim for when any Grandchildren are 15/16, then, if I am still around I'll shuffle off to Dignitas in time to hopefully leave them and my DC something they can use to live a decent life with. If DC don't have any kids it might well be sooner as they may not marry and have a 2nd income to feel comfortable about their future. Kids almost lost me last year so I have put a depressing amount of thought into this!

Your 25 x annual spending (plus a paid off house) number is fairly mainstream, although you need to add the tax impact if it’s not primarily in ISAs. If you don’t own a home, most people increase the multiple to about 30 to take rent increases into account, although a secure tenancy would mean that’s not necessary.

But I certainly wouldn’t be comfortable retiring on $20k a year, as soon as anything unexpected came up you’d be screwed and there’d be very little scope for fun and adventure.

I retired at 57, DH at 60. We own our own home with no mortgage. Also a 7 bedroom holiday home in France with no mortgage. We own 11 btl properties. We We have ok pensions between us getting £38k from pension. At 67 we will also get a state pension of about £11,500 each per year. Mine in 3 years and DH in 6 1/2 years. In total with pension income and btl income we are getting close to £100k per annum. Btl are going up in value too. We obviously have some savings too. We don't spend anywhere near this each year. We could probably live quite well on half what we have. We still save a lot. We gift to DC every year. We help out my niece who is a student so does not get much money. We are thinking of buying another holiday home in the UK by the seaside we could use it more frequently. We worked hard all our working lives. I inherited from my Mum too. We have invested wisely and paid off our mortgage very early. It hasn't always been easy though. I was a full time teacher but also examined A level and tutored 3 evenings a week. DH worked a full time job then came home and did work on btl houses. We got by by skimping in the early days. We were lucky with low interest rates for many years. We often went without foreign holidays in the early days and always drove old bangers never had new cars until years later. It's been a mixture of hard work, wise investment and luck with interest rates low for many years.

I used to be crazy over the idea of early retirement until i realised for us we need far more now than when 55+, when we won't need much at all - suspect when kids grow and fly nest annual expenses will come down by over two-thirds (we'd also downsize, pension pot can be accessed etc).

This might be helpful, not sure if it's been posted already -

www.retirementlivingstandards.org.uk/

The FIRE numbers always forget inflation. You might be able to live on £20k now but that be worth half as much in 20 years.

So if you want to retire on £20k in 20 years, you will actually need around £900k.

It depends when you want to retire and what lifestyle that gives.

£1 million in today's money might give you a very comfortable retirement from age 60, or a more basic one from 50 etc etc.

As others have said, it depends hugely too on whether you already have a paid-off house by retirement - you would need more if not.

So that maths seems to be suggesting if you take 4% out a year, you hopefully won't need to use your capital.
But anything big (new car, roof, boiler) and I think you'd need to take from capital.

It's also not taking inflation into account.

I think you'll need more than half a mil.

I think it’s tricky. I hope to retire at 60. So downsize to small, easy to maintain ground floor flat somewhere I can walk to shops. Sell up family home give kids cash for deposits etc. Get lump sum from private pension. Start claiming private pension. Then state pension will kick in at wherever the goal posts move to.

I’d probably not retire completely and take on bits to keep going tbh. I’m pretty frugal and if it’s just me in a cheap to run property that I own then I could live on current state pension. I’m hoping that plus private pension and I’ll be comfortable,