What Is Coast FIRE? The UK Number, Properly Calculated

Coast FIRE is the point at which you have invested enough that, without adding another penny, compound growth alone will carry you to full financial independence by your target retirement age.

It is the most useful milestone in the whole FIRE family, because it is the first one that is actually reachable in your thirties. Full financial independence might be twenty-five years away. Coast FIRE might be next year.

It is also the milestone most often calculated wrongly in the UK, for one specific reason: nearly every Coast FIRE calculator and article you will find is American, and Americans do not have the State Pension. Ignoring it inflates a typical UK Coast number by around 30 per cent, which is roughly six years of saving that you may not actually need to do.

The Coast FIRE formula

Your Coast FIRE number = FIRE Target ÷ (1 + r)ⁿ

• FIRE Target = your annual spending in retirement × 25 (the 4% rule)
• r = expected real annual return, after inflation, typically 5–7%
• n = years until your target retirement age

The standard worked example: you want £40,000 a year in retirement, so your FIRE target is £1,000,000. You are 35 and want to retire at 60, so n = 25. At 6% real:

£1,000,000 ÷ 1.06²⁵ = £233,000

Hit £233,000 by 35, never contribute again, and you reach £1m by 60. That much is arithmetically correct. The problem is the £1,000,000.

The State Pension is the biggest asset most UK plans forget

The full rate of the new State Pension is £241.30 a week in the 2026/27 tax year, which is £12,547.60 a year. You start receiving it at State Pension age, currently 67 for anyone planning an early retirement today.

Apply the same 25× convention that produced the £1,000,000 target and the State Pension is the equivalent of a £313,690 pot that you already own and that most calculators pretend does not exist. It is inflation-linked, it does not run out, and it carries no sequence-of-returns risk. On those terms it is a better asset than anything in your ISA.

Redo the example properly. You retire at 60 and need £40,000 a year. That splits into two phases:

• Age 60 to 67 (seven years): your pot funds the full £40,000 a year. Discounted at 6%, with withdrawals at the start of each year, that costs £236,693 at age 60.
• Age 67 onwards: the State Pension covers £12,547.60, so your pot only has to produce £27,452.40. At 25× that is a pot of £686,310 needed at 67, which discounted back seven years to age 60 is £456,435.

Total needed at 60: £693,128, not £1,000,000. That is 30.7% lower.

Run that through the Coast formula:

£71,501 is about six years of saving at £1,000 a month. That is the cost of using an American formula on a British retirement.

Two honest caveats. You only get the full rate with 35 qualifying National Insurance years, and if you actually stop working in your fifties you may fall short, so check your forecast rather than assuming. And if you genuinely distrust the State Pension surviving in its current form for thirty years, the standard number is your conservative case. What you should not do is ignore it without deciding to.

The age-57 trap

Hitting your Coast number means you can stop saving. It does not mean you can stop working. Those are different dates, and in the UK the gap between them is enforced by law.

The normal minimum pension age rises from 55 to 57 on 6 April 2028. Before that date you cannot draw a personal pension or SIPP without an unauthorised payment tax charge, unless you are retiring on ill-health grounds, hold a protected pension age, or are in the firefighters, police or armed forces schemes. So a coaster whose money is mostly in a pension cannot retire at 52 no matter how large the pot is.

This changes the number, because the target age changes:

All three assume the £1,000,000 target and 6% real. Three years of extra coasting is worth £78,806 off the number you have to reach now.

The ISA bridge

If you want to stop working before 57, you need a pot outside the pension to carry you to the date the pension unlocks. Assuming £40,000 a year of spending and 6% real growth, here is what that bridge costs on the day you stop:

This is the practical reason UK coasters split contributions between a pension and a Stocks and Shares ISA rather than pushing everything into the pension for the tax relief. The pension is more tax-efficient going in. The ISA is the only thing that lets you leave early.

The ISA allowance is £20,000 across all ISAs in 2026/27. One announced change is worth planning around: from April 2027 the Cash ISA allowance falls to £12,000 for under-65s, while the Stocks and Shares allowance stays at £20,000. For a Coast FIRE bridge, which should be invested rather than in cash over a horizon this long, that reform is close to neutral.

Your return assumption matters more than your savings rate

Everything above rests on 6% real, and that assumption is doing more work than any other input. Same £1,000,000 target, same 25 years, different returns:

Moving from 6% to 5% adds £62,304 to the number. That single percentage point is worth more than five years of maximum ISA contributions, and nobody knows which figure is right. The sensible response is not to find the correct rate, because there isn't one. It is to calculate your number at 4%, 5% and 6% and treat the spread as the actual answer.

Why the milestone still matters

Once you have hit your Coast number, every pound you earn only has to cover this year's living costs. Nothing has to go towards retirement any more. That is what makes it a genuine decision point rather than a spreadsheet curiosity: it is the moment going part-time, taking the lower-paid job you actually want, or starting something of your own stops being a sacrifice of your retirement and becomes merely a cut in current income.

Most people reach it earlier than they expect, and a good number of UK savers in their late thirties are already past it once the State Pension is counted properly.

Method and assumptions

• State Pension figure of £241.30 a week is the full new State Pension rate for 2026/27, taken from GOV.UK. The annual figure is that rate × 52.
• The normal minimum pension age of 57 from 6 April 2028 is HMRC policy, confirmed on GOV.UK. Protected pension ages and the emergency-services exemptions are real and are not modelled here.
• 25× spending, the 4% rule, is a convention rather than a published rate. It derives from US research on US market history. UK evidence generally supports a slightly lower safe withdrawal rate, so treat the targets above as optimistic rather than safe.
• All returns are real, that is after inflation. Bridge figures assume withdrawals at the start of each year and growth on the remaining balance.
• Figures are gross. Income tax on pension withdrawals above the personal allowance, and the 25% tax-free element, are not modelled and will move your real number.
• Every figure on this page was computed rather than transcribed, and rounded only at the point of display.

Frequently asked questions

Work out your own figure with the Coast FIRE calculator, then read Coast FIRE vs Barista FIRE for what to do once you are past the line, or how much you need to retire early in the UK for the spending side of the equation.