Poll

What's your UK FIRE amount?

<£500k
44 (21.8%)
£500k-£750k
44 (21.8%)
£750k-£1m
51 (25.2%)
£1m-1.25m
20 (9.9%)
£1.25m-£1.5m
8 (4%)
£1.5m-£1.75m
10 (5%)
£1.75m-£2m
3 (1.5%)
£2m-2.5m
12 (5.9%)
£2.5m-£3.0m
2 (1%)
£3.0m-£4.0m
5 (2.5%)
£4.0m-£5.0m
1 (0.5%)
£5m+
2 (1%)

Total Members Voted: 201

Author Topic: What's your UK fire amount?  (Read 81556 times)

vand

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Re: What's your UK fire amount?
« Reply #150 on: July 25, 2020, 06:09:06 AM »
And you can't just stuff money into your pension at a random later date; you can only contribute up to your taxable salary in a single year. So if you have FIREd and no longer have a taxable income you can't just liquidate 30k and put it into a pension.

helloyou

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Re: What's your UK fire amount?
« Reply #151 on: July 25, 2020, 06:56:04 AM »

I do think that's a little uncalled for. I still think helloyou's maths is wrong because they are not understanding the "two pots" system, but there's no need to name call.

I'm jusr saying that pension investing is not the right strategy if you plan to FIRE in your 30's because it'd be 20+ years away!

It can become a burden if you were to need that cash in 10 or so years before it gets available.

The idea is that you save for two different retirements. You save in the pension for 57+ and you save in the ISA for 30-57. You save enough in the ISA that you don't need the pension money until 57, so it isn't a burden but rather a separate pot of money that the government gives you extra money for, you pay less tax on, etc etc, and has 27 years to sit there growing. In a perfectly planned world, you get to £0 in your ISA on your 57th birthday and then start spending the pension money. This is unlikely to happen so you save a bit more in the ISA, but fundamentally the ISA only funds 27 years of your retirement and the pension funds the rest in a way that gets you more total money.

My stock ISA is fully topped every year because it's flexible.

But it's more the pension the issue. I opened it last year so potentially I could pop £80k there. I could save potentially 20% on tax there because I haven't filled my tax year yet. But that would be ££ locked for 20+ year so it's a bit fearsome.

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Re: What's your UK fire amount?
« Reply #152 on: July 25, 2020, 07:12:49 AM »
Yes but we can only play the game according to the rules of the day and adjust accordingly when new information becomes apparent. ISA rules could change significantly over the next 20 years. Anyone not spread over both buckets could then be adversely impacted if they were ISA heavy. Donít let fear drive your decision making. Instead look to be as efficient as possible based on the pros and cons of the tax wrappers as they stand today.

If you donít think youíll retire in the UK then obviously look into the various investment vehicles and ensure you know the rules of how moving country would impact that. Weíre confusing two different things here though. If pensions arenít correct for you because of your future relocation plans then that is fine. However that canít then be applied to a general comment about a £150k earner taking ages to get to FIRE because they donít bother to utilise the tax advantages of a pension. A £150k earner should be able to get to £1M far faster than 19 years.

I remember linking you a couple of really useful Monevator articles on Pensions versus ISA. Did you take a look at these?

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Re: What's your UK fire amount?
« Reply #153 on: July 25, 2020, 07:19:22 AM »
The key question is this:

"Is the size of stash you need to see you through until death the same size as the size of stash to see you through until 57 / 58?"

If you are retiring by 30 then the answer to that is probably yes and pensions have little utility (though I'd still be tempted to put in enough to get any employer match as a hedge against your plan failing).

If you are retiring in your late thirties then the answer is almost certainly 'no' and the difference between the two sums should be put into a pension at the point at which you can get maximum tax relief on it.

helloyou

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Re: What's your UK fire amount?
« Reply #154 on: July 25, 2020, 07:31:09 AM »
Yes but we can only play the game according to the rules of the day and adjust accordingly when new information becomes apparent. ISA rules could change significantly over the next 20 years. Anyone not spread over both buckets could then be adversely impacted if they were ISA heavy. Donít let fear drive your decision making. Instead look to be as efficient as possible based on the pros and cons of the tax wrappers as they stand today.

If you donít think youíll retire in the UK then obviously look into the various investment vehicles and ensure you know the rules of how moving country would impact that. Weíre confusing two different things here though. If pensions arenít correct for you because of your future relocation plans then that is fine. However that canít then be applied to a general comment about a £150k earner taking ages to get to FIRE because they donít bother to utilise the tax advantages of a pension. A £150k earner should be able to get to £1M far faster than 19 years.

I remember linking you a couple of really useful Monevator articles on Pensions versus ISA. Did you take a look at these?

Let say you a 20 year old earning £100k/year plan to retires in 10 years time with £2k/month to spend. He can save £4k/month:
Case 1: No investment in pension:
- He saves £4k/month with 5% grow will get him to £600k in exactly 10 years. So at 30 year old he can enjoy about £2k/month of free spending theoritically indefinitely.

Case 2: He invest half of the saving in pension:
- He saves £2k/month in his normal ISA / investment account
- Puts the other £2k/month in his pension which will be topped up by 20% by the gov (I take 20% because the 40% rate only applies for PAYE people and not contractors). So he invest about £2.4k/month in his pension.
- So in 10 years he would have saved £300k in his normal account and £360k in his pension account. For a higher total of £660k.

So how is he going to retire with only £300k in his normal invested account? He'll have to withdraw gradually in his normal account every year even though his pension makes his total portfolio higher.

PhilB

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Re: What's your UK fire amount?
« Reply #155 on: July 25, 2020, 07:42:32 AM »
Ö I take 20% because the 40% rate only applies for PAYE people and not contractors ...

Would you care to explain the logic behind that?  How is the contractor earning £100k managing to get income that would otherwise have gone into the pension out only paying 20% tax?  Are you thinking a limited company with all the profits remaining in the company (after 19% corporation tax) until you FIRE and then paid out slowly over the years to stay with the PA or what?

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Re: What's your UK fire amount?
« Reply #156 on: July 25, 2020, 07:45:48 AM »
Yes your case 2 follows a strategy that isnít aligned with their goals. So of course that doesnít work. If someone can earn £100k at the age of 20 then great go for it! Extremely early retirement awaits! I think they would have at least £2.5k going in their pension though. Iím not sure the Tax maths is correct in your example.

For the vast majority of people though retiring from say 40 onwards a pension has a vital role.

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Re: What's your UK fire amount?
« Reply #157 on: July 25, 2020, 07:48:31 AM »
Ö I take 20% because the 40% rate only applies for PAYE people and not contractors ...

Would you care to explain the logic behind that?  How is the contractor earning £100k managing to get income that would otherwise have gone into the pension out only paying 20% tax?  Are you thinking a limited company with all the profits remaining in the company (after 19% corporation tax) until you FIRE and then paid out slowly over the years to stay with the PA or what?

Yes that's exactly what I'm doing. It has load of tax advantage:
- Giving yearly salary below £8k contribute to basic pension but doesn't have to pay national insurance
- No income tax until £16k revenu
- And on top of that if you invest your company money and you receive dividend from another UK company it's not taxed.
- And of course you can expense various things (phone, internet, etc.)

helloyou

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Re: What's your UK fire amount?
« Reply #158 on: July 25, 2020, 07:50:51 AM »
Yes your case 2 follows a strategy that isnít aligned with their goals. So of course that doesnít work. If someone can earn £100k at the age of 20 then great go for it! Extremely early retirement awaits! I think they would have at least £2.5k going in their pension though. Iím not sure the Tax maths is correct in your example.

For the vast majority of people though retiring from say 40 onwards a pension has a vital role.

Yes the closer your age is to the pension date, the more important it is. When I'll turn 45 I pretty much plan to put as much as I can into it if I make any money then.

The tax and math are approximative. And tax could be correct if you are contractor in the UK. Not PAYE

BookLoverL

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Re: What's your UK fire amount?
« Reply #159 on: July 25, 2020, 07:55:02 AM »
Personally I'm 26 and given the general state of the world I'm not convinced pensions will still be available to withdraw by the time I get to 57, so I've been preferring to save elsewhere. But if you do believe that you'll be able to withdraw from the pension at the stated age then I think it's worth it.

vand

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Re: What's your UK fire amount?
« Reply #160 on: July 25, 2020, 08:02:42 AM »
Pension detractors are always using the argument that the rules keep changing, but you know what? They can and do change in our favour, too. It was not very long ago that you were forced to just buy an annuity with your pension. Now we have much more flexibility in how we can manage our funds.

helloyou

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Re: What's your UK fire amount?
« Reply #161 on: July 25, 2020, 08:19:54 AM »
By the way, most people I know earning high income want to change to being contractor for its tax advantages. That's why HMRC is implementing IR35 rules....

But in a nutshell:
- Let say you receive £100k/year revenu that goes first to your LTD company. You pay yourself just below the higher income tax bracket (£50k) to only pay about 20-25% tax (19% corporation tax + 0% income tax on £8k + 7.5% dividend tax for the rest)
- That's why if you put this amount into pension you can't save that much.
- The retained earning stays in the company and can be invested and then when I stop working I can gradually pay myself with the same strategy.

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Re: What's your UK fire amount?
« Reply #162 on: July 25, 2020, 08:20:39 AM »
Yes. They canít increase the pension age too much. There would be loads of unemployed people unable to access their pension but needing money to live!

ISAís have an absolutely vital role too for an early retirement but for the majority of people itís not an Ďeither, orí situation. They are both really useful vehicles.

Monevator has the best articles Iíve seen on how to blend the two in order to optimise an individuals approach. Iím conscious that this thread is a place for people to log UK FIRE numbers so I wonít post anymore away from that core topic.

Sea_saw started a really useful thread on the UK Tax board on ISAís and SIPPís.

skip207

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Re: What's your UK fire amount?
« Reply #163 on: July 29, 2020, 09:29:14 AM »
I plan to FIRE (if things even slightly go to plan with current world events) at 42-43.  I have a SIPP and its always been part of my planning.

Its roughly 20-25% of my TNW.  I have slowly bee building it over the last 20 ish years.  My idea is to stop paying into the SIPP from FIRE and then let it hopefully grow from say 43 to my late 50s.  Then the plan is to try and avoid touching it for as long as possible, until basically I really need too, or it becomes a matter of convenience i.e oh look I have that money to use there now vs money I *have* to use.

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Re: What's your UK fire amount?
« Reply #164 on: August 11, 2020, 04:08:02 PM »
I voted 500k - 750k, along with 30 others.  There are quite a lot in the "up to 500k" range but a greater number above 750k, which is kinda what I would expect. 

I don't exactly know where in the range I would be aiming - I'm still working on robustly assessing my annual expenses.  The good news is my net worth is already in the lower half of that range - I've been on a pretty good salary for the last few years, including some time working overseas with location uplifts and stuff like that, plus being single with no dependents has helped me to put a decent bit away.  A fair bit is in DC pension pots, so access age and tax have to be considered.   

I'm rambling.  So, hi, I guess.  I've actually been a very occasional poster, mostly lurking, here for a while but I thought I might try and engage more, get some encouragement from you all and maybe even offer some encouragement back! 

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Re: What's your UK fire amount?
« Reply #165 on: August 11, 2020, 11:46:52 PM »
Hi shackleford. Yes and I think house value skews the results for a lot of people. I would drop down a category if I didnít have a property in the south east of England.

You sound as though youíre in a great position. Good luck with your journey.

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Re: What's your UK fire amount?
« Reply #166 on: August 12, 2020, 01:56:16 AM »
Hi @shackleford - I'm in a similar position with the need to balance pensions and ISAs etc. I'm so envious of the options the US folk have to access their pension funds early (but not their health insurance costs).

Are you working on assessing your total expenses at the moment or your estimated spending in retirement? I found it quite easy to identify the costs that will go away in retirement (I doubt I'll be buying so many peak train tickets to the office) but more of a struggle to think about the areas that I hope to spend more on. Best of luck and hope to hear more from you.

vand

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Re: What's your UK fire amount?
« Reply #167 on: August 12, 2020, 02:51:42 AM »
My daily expense tracking spreadsheet that I have been fastidiously maintaining this year tell me that my total expenditure is on track for somewhere between £19k-20k in 2020.

However this also includes almost £8k in nursery fees, and hopefully this expense is only going to go down over the next couple of years as she eventually get to pre-school and school age.

OK, granted that 2020 is turning out to be a bit of an outlier in a lot of ways, but reckon my 12.5k lean-FI figure estimate was pretty close to the mark, and my pot is pretty nearly there now. Nonetheless I don't feel anywhere near ready for pulling the plug - partly because our financial situtation will soon be changing with the house move and we'll be taking a considerable amount of mortgage debt, but also I just don't feel at all ready to be giving up work until my pot is substantially bigger. 

There's no chance that I'm taking my foot off the gas right now... I don't need to look very far to see some friends who are having to deal with redunduncy from covid fallout, and realise that I'm fortunate to have been able to work throughout and still have my job. Continue to make hay while the sun shines, I say.




cerat0n1a

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Re: What's your UK fire amount?
« Reply #168 on: August 12, 2020, 03:06:33 AM »
My daily expense tracking spreadsheet that I have been fastidiously maintaining this year tell me that my total expenditure is on track for somewhere between £19k-20k in 2020.

However this also includes almost £8k in nursery fees, and hopefully this expense is only going to go down over the next couple of years as she eventually get to pre-school and school age.

I imagine she'll be a teenager in a decade or so. I wouldn't be taking that £8k spend out of your budget just yet.

shackleford

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Re: What's your UK fire amount?
« Reply #169 on: August 12, 2020, 11:32:50 AM »
Hi shackleford. Yes and I think house value skews the results for a lot of people. I would drop down a category if I didnít have a property in the south east of England.

You sound as though youíre in a great position. Good luck with your journey.

Thanks!  Yes, that is a good point.  Up here in the Land of Semi-Affordable Housing, our FIRE amounts might look a bit thin to you guys....

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Re: What's your UK fire amount?
« Reply #170 on: August 12, 2020, 11:46:53 AM »

Are you working on assessing your total expenses at the moment or your estimated spending in retirement? I found it quite easy to identify the costs that will go away in retirement (I doubt I'll be buying so many peak train tickets to the office) but more of a struggle to think about the areas that I hope to spend more on. Best of luck and hope to hear more from you.

Thanks!  Well, back in April I moved back to Scotland from Norway where I was working for the last three years.  So I've been adjusting to cheapo UK prices again, while also living lockdown life, so although I'm collecting data I need to think about how my spending might increase when the pubs are open.  As for costs in retirement, its easy enough to work out which of my current costs go away, but what I find more uncertain is this - what if personal circumstances changing significantly?  If, for example, I managed to persuade/trick an actual real-life woman into settling down with me, some new costs might appear and some existing costs might change.  So aye, that's the kind of stuff I'm mulling over. 

I should really figure out how to multi-quote....

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Re: What's your UK fire amount?
« Reply #171 on: August 12, 2020, 01:54:35 PM »
Hi shackleford. Yes and I think house value skews the results for a lot of people. I would drop down a category if I didnít have a property in the south east of England.

You sound as though youíre in a great position. Good luck with your journey.

Thanks!  Yes, that is a good point.  Up here in the Land of Semi-Affordable Housing, our FIRE amounts might look a bit thin to you guys....

Shh, don't tell everyone about our semi affordable housing!

But I had to chuckle at this because it's so true. Not being mortgaged up to your ears in itself is a source of financial freedom and one I take advantage of.

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Re: What's your UK fire amount?
« Reply #172 on: August 13, 2020, 03:43:43 AM »
I should really figure out how to multi-quote....

From the reply window, scroll down until you find the bit you want to quote. In the top right corner there is an "Insert Quote" button. It'll add the quote where the cursor is. Hit "Preview" before posting to check that the formatting hasn't gone awry!

Norway to Scotland will definitely change your expenses. I was horrified the first time I got a Norwegian bar bill.

shackleford

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Re: What's your UK fire amount?
« Reply #173 on: August 14, 2020, 12:19:14 PM »


From the reply window, scroll down until you find the bit you want to quote. In the top right corner there is an "Insert Quote" button.

Thanks!



 It'll add the quote where the cursor is. Hit "Preview" before posting to check that the formatting hasn't gone awry!


Very useful! 

LightTripper

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Re: What's your UK fire amount?
« Reply #174 on: September 03, 2020, 03:24:45 AM »
I've only ever visited Norway (though I was visiting a friend who moved there from the UK and I know she found it expensive other than childcare: which kind of cancelled out the higher food and drink costs)  Beautiful place though!

We've found with kids the only real bump to expenses is childcare.  We've been able to get most of the "stuff" as hand-me-downs or second hand.  The money we spend on top-up clothes and nappies is easily cancelled out by going out less and buying less stuff for ourselves.  However, I do suspect they will get more expensive as they get older (already things like holidays are getting more expensive as we have to go in school holidays and buy them their own plane/train seats).  I think we will do more UK holidays though, so it's not necessarily the case that we'll spend more - rather that we'll do things differently for a bit.

The one I worry about (not massively - but it's on my radar) is wealth tax.  They get talked about so often, I feel like the country is kind of "primed" for it, so it wouldn't be a massive scandal if brought in.   I suspect they'd do it pretty gradually though (first only on very high NW and then reducing the threshold, and probably excluding pensions and maybe even your home below a certain value).  It's interesting that several countries seem to have got rid of their wealth taxes in recent years, so maybe I'm wrong about the politics of it.

I was trying to look into how much is typical for a wealth tax and it seems to be anywhere between 0.2% and 1.0% generally (thanks Wikipedia!).  In some countries (e.g. Netherlands) it seems to be presented as effectively a tax on income from assets ... so I wonder if it might be paired with less tax on dividends or interest? 

Anyway, I guess it just goes in the bucket of "known unknowns" when setting a FIRE number, as you can't really quantify it, but it definitely steered me towards a slightly higher FIRE number, and unknowns like that are one of the reasons I may keep my hand in with a little bit of work after I retire (if I can bear it!) or maybe try to find a new avenue that would pay me a small income if I needed it to cover wealth taxes and stop my stache being eroded too fast.

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Re: What's your UK fire amount?
« Reply #175 on: September 03, 2020, 04:21:43 AM »
Wealth taxes are an interesting one LightTripper. The ďknown unknownsĒ are certainly a tricky one to deal with. Potential health care costs and old age care are other examples in this category for me. Itís interesting your solution to the wealth tax is to aim for a higher FIRE number. I think the prospect of a wealth tax would make me want to potentially lower my FIRE number to ensure I was under any likely threshold.

According to this poll more than half are looking for a FIRE figure of less than a million. Given property prices in London and the South East I cant see a wealth tax ever including those in that category for example. Itís too low a number I would have thought.

I do wonder what the next couple of budgets will bring given the world we are now living in, and as a result how it will impact the early retiree and the way we have all voted in this poll.

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Re: What's your UK fire amount?
« Reply #176 on: September 03, 2020, 06:40:44 AM »
Think-tanks associated with both of the main UK political parties have floated some kind of wealth tax as a possibility; both of them have explicitly excluded personal residence & pension from it. Consider my elderly neighbour, with a £700 000 house and a £8.5k annual income - she's already hugely impacted by community charge. While it might be desirable in general terms to force people not to occupy more house than they need, it's politically a disaster to force little old ladies to sell up a house they might have lived in for decades to pay an annual tax. You can't sell part of a house, or in many cases access the value stored in a pension fund. I suppose there could be a mechanism by which part of the value of somebody's estate could be reserved by the government as a delayed wealth tax payment and taken as part of inheritance tax. There are politically easier targets I would think - reducing the tax relief on pension contributions for higher rate tax payers, or increasing taxation on holiday homes, for example.

I would hope that the government introduces some kind of social/elderly care package. It's pretty much a lottery whether you need expensive care that uses up the value of your house and savings in old age or not. Most people don't need it (or only for a very short period), but for the ones who do need it, it wipes everything out. That's the perfect scenario for some kind of insurance type mechanism to pool risks - and it should be government/ taxation funded.

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Re: What's your UK fire amount?
« Reply #177 on: September 03, 2020, 08:05:44 AM »
We live in this bizarre world though, where a 'primary residence' is totally tax free. It really (really really) shouldn't be. You can have people claiming benefits and whatnot (and no I am NOT in the "oh the scroungers are what's wrecking the country" camp, not at all) because of low income but living in these massively valuable houses.

Little old ladies in too much house bloody well should be encouraged to sell, and they should be taxed; as should your average Bob and Sharon if the value of their house has doubled in the last 5 years. Now, perhaps there should be some ability to defer that tax if you are using the money to buy a different home of similar value, because of course you don't want the opposite to happen - people NOT moving because the tax would be too much.

Just because something is a 'home' shouldn't mean it isn't taxable - it is unfair to renters. We need to make it easy to move (the UK is bonkers in that the buyer can back out with no penalty before exchange), and encourage it so that people who need 3 bedrooms can get them. An adjustment to council tax based on "bums in beds" or something.

Don't get me wrong I have nothing in principle against HMOs, nor people having the right to own property, but it is the job of government to encourage and promote certain behaviour. Parking in the south-east is just mental at the best of times, and not getting better.

Hmm. Well. There's a lot more here than just wealth tax. AFAIK I read something saying wealth tax generally doesn't work so well as people who are truly wealthy just bugger off. You want the wealthy (and yes of course you want them to pay their fair share), it's a fine line.

BookLoverL

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Re: What's your UK fire amount?
« Reply #178 on: September 03, 2020, 08:35:40 AM »
I believe they already reduce housing benefit paid to people claiming welfare with spare bedrooms, which was the "bedroom tax" that was in the news a few years back, and was considered unpopular because it didn't account enough for disabled people who might need the extra room. (Googling tells me that if you're disabled and receive regular overnight care you're allowed an additional bedroom, as it currently stands, but I don't know if this was always the case or if this would cover all disabled people's needs. Also, it says that two same-gender children under 16 are expected to share and two children under 10 are expected to share regardless.)

I do think that single old ladies living alone in big houses is causing some of the issues younger people have getting on the housing ladder, but it really is quite harsh to force them out of a place they've lived their whole lives. Perhaps there should be some sort of scheme to encourage them to take on a younger family as lodgers or something, I don't know.

There is also, of course, the issue of all the second homes that are completely unoccupied for most of the year. Free some of these up, and maybe getting on the housing ladder in the first place will become more achievable.

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Re: What's your UK fire amount?
« Reply #179 on: September 03, 2020, 09:00:07 AM »
Little old ladies in too much house bloody well should be encouraged to sell, and they should be taxed;

"Should" and what politicians feel they can do don't always line up though. 64% of the over-65s voted Conservative, 17% voted Labour. They're the biggest age cohort, and the most likely to vote. While we live in a quasi-gerontocracy, I can't see any politician being willing to do things like this. Same argument applies to free tv licenses, bus passes etc. - effectively a subsidy from the poorest people in society to the richest (in asset terms, not income) but that's not how it's seen.

Quote
Hmm. Well. There's a lot more here than just wealth tax. AFAIK I read something saying wealth tax generally doesn't work so well as people who are truly wealthy just bugger off. You want the wealthy (and yes of course you want them to pay their fair share), it's a fine line.

Yes, like inheritance tax, it hits people who're wealthy, but not wealthy enough to take tax avoidance measures. A significant proportion of the farms around where I live are owned (and run) by people who were previously in the city, partners in law firms etc. You get to 65 or so and buy a farm so that you can pass your wealth on without inheritance tax and without fiddling about with trusts etc.

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Re: What's your UK fire amount?
« Reply #180 on: September 04, 2020, 12:23:26 AM »
Little old ladies in too much house bloody well should be encouraged to sell, and they should be taxed;

"Should" and what politicians feel they can do don't always line up though. 64% of the over-65s voted Conservative, 17% voted Labour. They're the biggest age cohort, and the most likely to vote. While we live in a quasi-gerontocracy, I can't see any politician being willing to do things like this. Same argument applies to free tv licenses, bus passes etc. - effectively a subsidy from the poorest people in society to the richest (in asset terms, not income) but that's not how it's seen.
...

Free TV licences are being restricted to those on Pension Credit. I agree with your point generally.

What saddens me about the desire to keep the little old lady in the house she has lived in for fifty years (and raised children and memories and such) is that often these houses are not suitable for people who need significant care or have mobility problems. It's so much harder to move to a physically suitable property once you need to, so some people live tiny housebound lives limited to a couple of downstairs rooms scared of their own front steps. Or people move after their memory is impaired and really struggle to adapt to how the new stove works or how to get back from the shop.

Even if we are trying to do the very best thing for an aging population, keeping them in massive, inaccessible houses until they have to go into a care home isn't it. It would be kinder (IMO) to incentivise downsizing into aging-proofed homes while people still have the ability to cope with a move. [Noted that there are plenty of mobile older people with excellent memories who blast up and down stairs and never lose their keys.]

cerat0n1a

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Re: What's your UK fire amount?
« Reply #181 on: September 04, 2020, 12:57:10 AM »
It should be noted though, that it's perfectly possible for elderly people to be living in houses worth well over half a million pounds without it being particularly large or out of the ordinary, in many parts of south-east England. In which case, you're not necessarily talking about people simply downsizing from a two-bedroom home to something smaller, you need people to move out of premium locations. Someone who has lived in a terraced house in central Oxford or Cambridge all of their lives and has the ability to walk to friends & family, longstanding relationship with GP, local shops where they are known etc. might find it quite hard to move a couple of miles into the suburbs, because the area around them has gentrified in the last couple of decades.

In any case, it seems unlikely that if we do get a wealth tax, it would take into account the value of pensions or primary personal residence. What voters want is a wealth tax that *other people* have to pay. So I don't think it should be a serious consideration when working out a target FIRE amount. (And frankly, those of us who have RE'd with large sums sheltered in ISAs and pensions pay hardly any tax as it is, so can hardly complain.)

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Re: What's your UK fire amount?
« Reply #182 on: September 04, 2020, 01:55:08 AM »
It should be noted though, that it's perfectly possible for elderly people to be living in houses worth well over half a million pounds without it being particularly large or out of the ordinary, in many parts of south-east England. In which case, you're not necessarily talking about people simply downsizing from a two-bedroom home to something smaller, you need people to move out of premium locations. Someone who has lived in a terraced house in central Oxford or Cambridge all of their lives and has the ability to walk to friends & family, longstanding relationship with GP, local shops where they are known etc. might find it quite hard to move a couple of miles into the suburbs, because the area around them has gentrified in the last couple of decades.

In any case, it seems unlikely that if we do get a wealth tax, it would take into account the value of pensions or primary personal residence. What voters want is a wealth tax that *other people* have to pay. So I don't think it should be a serious consideration when working out a target FIRE amount. (And frankly, those of us who have RE'd with large sums sheltered in ISAs and pensions pay hardly any tax as it is, so can hardly complain.)

Absolutely, some allowance has to be made for this - but the counter argument is that if prices are high because that's where work is, it's much better to force (er, encourage!) the old people to go to a town with facilities but fewer jobs, so that people can live closer to where they work (I mean, we should all be doing that... unless remote working of course).

The UK is faaaar too generous. Oh hi, I'm earning a decent amount but I can salary sacrifice into a SIPP down to minimum wage, not pay back any student loan, still get 20k a year tax shelter... it's madness. Of course the more money you have the easier it is to do this (ie if you're supporting a family, or living alone in a HCOL area, chances are you need more than minimum wage so can't shelter as much...).

We're all too selfish, that's the problem. Malaise of the West.

LightTripper

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Re: What's your UK fire amount?
« Reply #183 on: September 04, 2020, 02:21:02 AM »
Oh yes, I certainly will not be complaining about a wealth tax (well, I am human - I will try very hard not to!)

I agree that current incentives for rich people to save in pensions are far too strong (and for everyone else to save in pensions too weak) - that's a reform that is long overdue, but given I'm probably pretty much done filling my pension it does feel a bit like pulling up the drawbridge after me to make too much fuss about it. 

Instability of the tax system (whether for good or ill) does certainly make it harder to plan though: makes sense to think (not panic) about these things a bit.  Similarly I worry about the NHS - but again I guess that any dismantling will be piecemeal and may not impact me that much (assuming there will always be some free provision for old people, as there is even in the US I believe). 

Certainly the prospect of FIRE may look more difficult for the next generation I suspect (but of course, economies targetting growth will hardly want to make it easy for people to retire early and stop owing much tax).

vand

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Re: What's your UK fire amount?
« Reply #184 on: September 04, 2020, 02:33:36 AM »
Soak the rich doesn't work. Wealth taxes and policies aimed at driving little old ladies out of their million pound homes isn't the answer to anything. If tax history shows us anything it is that when you try to squeeze tax from any particular group, then that group devotes all its brainpower and resources into finding every loophole and workaround in order simply to avoid the tax - resources that could othewise have gone into other more productive ventures, and society as a whole is worse off.

It is this sort of thinking that has created a spaghetti tax code which has expanded over 500% in volume over the last couple of decades, again creating an army of tax accountants and lawyers who specialise in tax avoidance at the expense of society rather than to its benefit.

Homes today are overpriced for the following reasons:

- We artificially supress interest rates
- We restrict new housing supply
- We have social policies which guarantee a minimum income for large swathes of the rental market to private landlords

. The simple, more elegant answer is to adopt sound money and embrace more free markets. This will result in assets, including homes, being priced more according to the demands of society as a whole, rather than just for those who benefit the most from it (people with a large investment in property).
« Last Edit: September 04, 2020, 02:37:10 AM by vand »

daverobev

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Re: What's your UK fire amount?
« Reply #185 on: September 04, 2020, 03:41:35 AM »
Soak the rich doesn't work. Wealth taxes and policies aimed at driving little old ladies out of their million pound homes isn't the answer to anything. If tax history shows us anything it is that when you try to squeeze tax from any particular group, then that group devotes all its brainpower and resources into finding every loophole and workaround in order simply to avoid the tax - resources that could othewise have gone into other more productive ventures, and society as a whole is worse off.

It is this sort of thinking that has created a spaghetti tax code which has expanded over 500% in volume over the last couple of decades, again creating an army of tax accountants and lawyers who specialise in tax avoidance at the expense of society rather than to its benefit.

Homes today are overpriced for the following reasons:

- We artificially supress interest rates
- We restrict new housing supply
- We have social policies which guarantee a minimum income for large swathes of the rental market to private landlords

. The simple, more elegant answer is to adopt sound money and embrace more free markets. This will result in assets, including homes, being priced more according to the demands of society as a whole, rather than just for those who benefit the most from it (people with a large investment in property).

The law of unintended consequences, yes. And that you can't stop people being stupid. But... while I totally agree that tax code simplification generally is a good thing, you can go too far - strip back too much and you end up with near slavery. Min wage is... ah it's hard isn't it. Min wage is a good thing but too high of a min wage is counterproductive.

It *is* the job of govt to encourage and discourage certain behaviour. People are stupid - without rules, parking in some towns and cities just devolves into madness. Businesses don't generally care about an individual's problems.

I do sometimes wonder about starting a political party.

vand

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Re: What's your UK fire amount?
« Reply #186 on: September 04, 2020, 04:48:05 AM »
Soak the rich doesn't work. Wealth taxes and policies aimed at driving little old ladies out of their million pound homes isn't the answer to anything. If tax history shows us anything it is that when you try to squeeze tax from any particular group, then that group devotes all its brainpower and resources into finding every loophole and workaround in order simply to avoid the tax - resources that could othewise have gone into other more productive ventures, and society as a whole is worse off.

It is this sort of thinking that has created a spaghetti tax code which has expanded over 500% in volume over the last couple of decades, again creating an army of tax accountants and lawyers who specialise in tax avoidance at the expense of society rather than to its benefit.

Homes today are overpriced for the following reasons:

- We artificially supress interest rates
- We restrict new housing supply
- We have social policies which guarantee a minimum income for large swathes of the rental market to private landlords

. The simple, more elegant answer is to adopt sound money and embrace more free markets. This will result in assets, including homes, being priced more according to the demands of society as a whole, rather than just for those who benefit the most from it (people with a large investment in property).

The law of unintended consequences, yes. And that you can't stop people being stupid. But... while I totally agree that tax code simplification generally is a good thing, you can go too far - strip back too much and you end up with near slavery. Min wage is... ah it's hard isn't it. Min wage is a good thing but too high of a min wage is counterproductive.

It *is* the job of govt to encourage and discourage certain behaviour. People are stupid - without rules, parking in some towns and cities just devolves into madness. Businesses don't generally care about an individual's problems.

I do sometimes wonder about starting a political party.

The flipside of a free society is personal responsibility.  You are free to do what you want but you also have to accept the consequences of that.  My view is that governments do more far more to encourage irresponsible risktaking and moral hazard by their distortion of markets than individuals would left to themselves.


shelivesthedream

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Re: What's your UK fire amount?
« Reply #187 on: September 04, 2020, 05:27:15 AM »
I'm probably bordering on being a bit of a crank about this, but in re housing crisis, I am pretty narked that Barratts can plonk an estate of anti-Mustachian, environmentally-shoddy four bedroom detached houses in a field more easily than I can build my own personal house to personally live in.

skip207

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Re: What's your UK fire amount?
« Reply #188 on: March 31, 2021, 03:10:19 PM »
Unless something very strange happens globally you don't need to go under 3% SWR.

Well something strange happened.... ffs me and my big mouth.

Anyway, thought I would update.
850k was my number.
Now at 830k so closing in.

So thats a positive.

However investments still need to be topped up about 150k short, still on track for end 2022 though.

The extra has come from SIPP and property gains.

Another +ve since I last posted we paid off the mortgage too.  So housing costs reduced quite a bit.

Now set budget of 28k PA.

never give up

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Re: What's your UK fire amount?
« Reply #189 on: April 05, 2021, 02:31:46 AM »
I went for £750k to £1M. Enough to cover about £22k of expenses a year and a paid for house.
Naive fool!

This was posted right back at the start of me finding FIRE. Iím basing my FIRE number on £16k now, although Iíve been living on approximately £10k since this first post, as I attempt to play catch up with my investments after years of mortgage overpaying.

Ironically this doesnít change my poll category because the house price keeps going up.

Manchester

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Re: What's your UK fire amount?
« Reply #190 on: April 06, 2021, 10:27:10 AM »
Unless something very strange happens globally you don't need to go under 3% SWR.

Well something strange happened.... ffs me and my big mouth.

Anyway, thought I would update.
850k was my number.
Now at 830k so closing in.

So thats a positive.

However investments still need to be topped up about 150k short, still on track for end 2022 though.

The extra has come from SIPP and property gains.

Another +ve since I last posted we paid off the mortgage too.  So housing costs reduced quite a bit.

Now set budget of 28k PA.

Nice, looks like you're pretty close!   I reckon you'll be able to FIRE before the end of '22...

Manchester

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Re: What's your UK fire amount?
« Reply #191 on: April 06, 2021, 10:29:05 AM »
I went for £750k to £1M. Enough to cover about £22k of expenses a year and a paid for house.
Naive fool!

This was posted right back at the start of me finding FIRE. Iím basing my FIRE number on £16k now, although Iíve been living on approximately £10k since this first post, as I attempt to play catch up with my investments after years of mortgage overpaying.

Ironically this doesnít change my poll category because the house price keeps going up.

Well, with figures like that you must be a lot closer to FIRE than you were in 2017.

How time flies...

Manchester

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Re: What's your UK fire amount?
« Reply #192 on: April 06, 2021, 10:32:21 AM »
I think £900,000 should be more than enough for me.  That would give me £27,000/£36,000 per year.

Lol,

I reckon I can shave about £200k off this nowadays.

I'm going to use this as evidence that I'm £200k closer to FIRE than I was in 2017. :)

never give up

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Re: What's your UK fire amount?
« Reply #193 on: April 06, 2021, 10:47:18 AM »
Ha yes itís funny Manchester how having more years of data allows us to assess our needs a bit more accurately. Well done for knocking off £200k from your total. Thatís a huge chunk to take off.

Well, with figures like that you must be a lot closer to FIRE than you were in 2017.

How time flies...
Yes progress has most certainly been made. Time is drifting past at an alarming rate though.

skip207

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Re: What's your UK fire amount?
« Reply #194 on: April 06, 2021, 02:16:38 PM »
Unless something very strange happens globally you don't need to go under 3% SWR.

Well something strange happened.... ffs me and my big mouth.

Anyway, thought I would update.
850k was my number.
Now at 830k so closing in.

So thats a positive.

However investments still need to be topped up about 150k short, still on track for end 2022 though.

The extra has come from SIPP and property gains.

Another +ve since I last posted we paid off the mortgage too.  So housing costs reduced quite a bit.

Now set budget of 28k PA.

Nice, looks like you're pretty close!   I reckon you'll be able to FIRE before the end of '22...

Hoping for sometime around the end of 2022.  So close.. yet still so far away LOL

skip207

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Re: What's your UK fire amount?
« Reply #195 on: April 16, 2021, 02:47:29 PM »
Well, today, I hit 850k.

Thats "my number".  Well, it was a few years ago.
I am still c.£150k short as of today. (ISAs)
So that puts me nicely at a square 1MM.

Still, I am amazed that I am actually here at this number given exactly a year ago I was at 625.

The power of compounding I guess plus a massive bull market!

We are going to get the next 5-6 months of work out of the way and then its serious sit down time and plan our RETIREMENT.

Roll on winter 2022.

bownyboy

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Re: What's your UK fire amount?
« Reply #196 on: April 17, 2021, 08:12:13 AM »
Congrats! Skip207. Thatís a huge yearly increase!

For a while we were at similar numbers but youíve pulled well ahead. Weíre currently at £720k with a target of £800k by September.

What are you invested in? Weíre 75/25 Vanguard FTSE Global All Cap and Total Bonds.

never give up

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Re: What's your UK fire amount?
« Reply #197 on: April 17, 2021, 01:10:21 PM »
Well done skip207. Thatís crazy progress. Good luck with your plans.

skip207

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Re: What's your UK fire amount?
« Reply #198 on: April 17, 2021, 01:36:53 PM »
Cheers still a little way to go but almost not feeling real.

BB, I am mostly in VLS100, VWRL and some other single stocks.  The biggest hitter for me though has been Vanguard Global Emerging Markets. YoY its up over 55%!!!
Very high risk though and I plan to de-risk very soon back into VWRL/100.  Might leave the profits in VGEM.

My wifes SIPP is with another firm, and I dont really pay a great deal of attention but hers has also done very well this last 12 months.

The other boost has been business actually did well during the pandemic so we were able to pump some money into the SIPPs.  About 40k we were not expecting.

The main issue is that most of the net worth is tied up in the SIPP which of course we cant access right now so thats why we need to get the ISAs up a bit higher then we are ok for FIRE. 

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Re: What's your UK fire amount?
« Reply #199 on: November 16, 2021, 04:07:06 AM »
Is there any way to change the poll results as I changed my FIRE amount?

Looking at the results:
- £500k set you in the bottom 25%
- £750k set you in in the average FIRE amount at 50%
- £1M set you in the top 20%
- £1.75M set you in the top 10%
- £3M set you in the top 1%

It looks like a chunk of us are aiming for FAT fire!

 

Wow, a phone plan for fifteen bucks!