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date: 2026-07-23 19:00
type: blog
title: Coasting to FIRE in the UK
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---

The concept of coast FIRE is having the ability to cruise along until retirement date. Like riding a bike down a hill, there is no need to pedal. FIRE stands for financial independence retire early. Such that there is enough growth and income from one's financial situation that there is no obligation to continue to work and retiring early is generally considered before access to pensions, so anytime before 55 would be considered early.

For people in the UK this might mean having enough money in their pensions at age 40, that compound growth alone, when measured against historical averages, would see the sum rise to meet the costs of their desired lifestyle in retirement at a certain age e.g. 58. This assumes the funds are in a pension and pensions will be accessible at 58 for most people. However, retiring earlier is an option if other means were available.

Working backwards, then, there are a few vehicles and wrappers that help.

A Defined Benefit (DB) pension is a guaranteed annual sum paid for every year of retirement, often with a tax-free lump sum to go with it. Contributions are made by your employer and invested in exchange for a fixed amount in retirement. This, in addition to a state pension, might equate to the required living standards in retirement.

DB schemes are less common these days, and if the amount is not enough to cover retirement living then using a defined contribution scheme (DC) is the next vehicle. This is where the contributions made by employee and employer are invested to realise growth in the long term and that funds retirement.

SIPPs similarly are self-invested personal pensions where your own contributions are used to build that future income. Both DC and SIPPs come with tax benefits and can be available from age 57/58 for most people.

Individual Savings Accounts (ISA) are a tax-free wrapper, such that any growth, interest or capital gains inside the wrapper are free from tax. There are annual contribution limits dependent on the type of wrapper (LISA, Cash, Stocks and Shares to name a few). Stocks and Shares, for example, has a £20k per year contribution limit.

Using a combination of these vehicles to bridge the gap between planned retirement age and one's death allows someone to retire early, for example living off the ISA aged 50-58, then accessing SIPP and other pensions from 58 onwards and supported by a DB pension and a state pension at 68 onwards if applicable.

I am fortunate enough to have all of these vehicles in play and as such I have already achieved coast FIRE, as my state pension and DB pension scheme are, given today's value, sufficient to cover today's living costs. Given all three of these are subject to inflation (both pensions, and my expenses), we can just ignore the inflationary effects. My spouse also has a state pension and a modest pension due, so that is just bonus money for our family.

My SIPP and workplace pension have a combined £175k invested and will continue to grow from today (43) until 58 when I intend to use this to bridge the gap to 68 when the DB and state pension are available.

My ISA has £145k invested too, and that is my bridge from retirement to 58. All my investments are broadly in the same funds and simply a cheap whole-of-world index fund. I have no individual stocks, bonds, or Real Estate Investment Trusts (REITs).

For compounding growth I assume a modest 4% return after inflation of 2.5%, so if my investments rise by 6.5% per year on average I am on track. Historical markets show this is pessimistic but that should leave enough room for error, a down market crisis when I want the money out, and fees. This will likely give me a little more spending power in retirement.

The only calculation I need to consider now is how much money is in my ISA and how many years of living expenses can it sustain. At the moment it appears to be about 9 years, so this would put my retirement at 49.

**_I've run this through a simulation of historical events and market returns and it's successful in that I don't run out of money in 93% of 311 scenarios with a pessimistic outlook. I end up with a surplus in low, median and high outlooks, in which I earn more from investment growth than I need to spend. For the high level the surplus was in the millions but in reality, this would likely be reflected in an increased level of discretionary spending and gifting._**

So, what's this **Coast** thing about then?

Well, given my investments and the time in the market before I need to draw down some to spend, I have no need to contribute further to my pensions. I therefore don't need to have surplus income from my salary to pay into my vehicles, so I can coast in my career and find a role that pays enough to cover today's costs, hopefully a role that means less stress or pressure and fewer hours to enjoy life with the family.

In reality, though, my intention would be to keep that surplus and use that to fill my ISA and other liquid vehicles such as premium bonds and savings accounts to bring forward that retirement date where 49 can become 48, 47 etc.

There are several variations of this FIRE theme. Barista FIRE is a subset where the only income needed is by an effective low-paid job in a coffee shop or garden centre - providing enough to cover some spending whilst the investments are already doing the heavy lifting. Fat FIRE, as it sounds, is the fat cat of retirement where the funds are far more than are needed and would lead to a high level of discretionary spending. Lean FIRE is the opposite and would be a very modest retirement lifestyle.

**_I am not a financial advisor and this is not financial advice. I am simply sharing my own personal journey and experience. Please seek professional advice before making any financial decisions. This documents the currently known rules, dates, ages, and could be subject to change in the future._**