Your FIRE Number: How to Calculate It

Published 29 March 2026 • 8 min read

Your FIRE number is the total amount of invested assets you need to sustain your desired lifestyle without working. Getting this number right is the most important step in any FIRE journey. Too high and you will work longer than necessary. Too low and you risk running out of money. Here is how to calculate yours accurately for the UK.

The basic formula: Annual spending × 25 = your FIRE number. This is based on the 4% withdrawal rule, which suggests a 4% annual withdrawal rate gives your portfolio a high probability of lasting 30+ years.

Step 1: Calculate Your Annual Spending

This is the foundation. Track every penny you spend for at least 3 months, then annualise it. Include everything:

Housing (mortgage/rent, council tax, insurance, maintenance)
Utilities (gas, electric, water, broadband, mobile)
Food and household supplies
Transport (car costs, fuel, public transport)
Insurance (life, health, car, home)
Leisure, holidays, subscriptions
Clothing and personal care
One-off and irregular expenses (car replacement fund, home repairs)

Common mistake: Many people underestimate their spending by 20–30%. Use actual bank and credit card statements rather than guessing. Include lumpy expenses like car replacement, boiler repair, and dental work.

Step 2: Apply the Multiplier

Withdrawal Rate	Multiplier	Best For
4.0%	25x spending	Traditional FIRE (30-year horizon)
3.5%	28.5x spending	Conservative / early retirees (40+ years)
3.25%	30.8x spending	Very conservative / retiring before 45

If you are retiring in your 40s, a more conservative 3.5% rate gives extra safety margin. Those retiring closer to 55–60 can use the standard 4% more confidently.

Step 3: Factor In the State Pension

The State Pension is worth £11,502/year (2025/26) and begins at age 67. This reduces the amount your portfolio needs to provide from that age:

Annual Spending	FIRE Number (No State Pension)	FIRE Number (With State Pension from 67)
£20,000	£500,000	£212,500*
£25,000	£625,000	£337,500*
£30,000	£750,000	£462,500*
£35,000	£875,000	£587,500*

*Post-67 FIRE number based on (spending minus State Pension) × 25. Before 67, you need the full FIRE number or an ISA bridge.

Step 4: Account for Tax

Not all withdrawals are equal. Your FIRE number should account for the tax efficiency of each wrapper:

ISA withdrawals — completely tax-free, no impact on your Personal Allowance
Pension withdrawals — 25% tax-free lump sum, remainder taxed as income. The first £12,570 is within the Personal Allowance
GIA withdrawals — subject to Capital Gains Tax (CGT) above the £3,000 annual allowance

Tax-smart withdrawal order: Draw from ISAs first (tax-free), then pension within the Personal Allowance, and use your 25% tax-free lump sum strategically. A good tax plan can save thousands per year.

Example FIRE Number Calculations

Profile	Annual Spending	FIRE Type	FIRE Number
Single, frugal, owns home	£15,000	Lean FIRE	£375,000
Single, moderate lifestyle	£25,000	Regular FIRE	£625,000
Couple, comfortable	£35,000	Regular FIRE	£875,000
Single, part-time work £10k	£25,000	Barista FIRE	£375,000

Key Takeaways

Your FIRE number = annual spending × 25 (or 28.5 for a conservative approach)
Track actual spending — most people underestimate by 20–30%
The UK State Pension significantly reduces your post-67 FIRE number
Tax-efficient withdrawal order matters — ISAs first, then pension within the Personal Allowance
Consider a pension calculator to model different scenarios