Every retirement plan looks different because we all have unique circumstances and aspirations in life. You will have to decide what you want your lifestyle to look like, what your priorities are, and when you want to stop working.
For a certain group referred to as the FIRE (financial independence, retire early) movement, the question of when to retire is key.
Those who follow the FIRE methodology aim to finish working as early as possible, even if this means making significant short-term sacrifices.
Read on to learn more about the FIRE movement and how it compares to traditional financial planning methods.
Those who follow the FIRE movement aim to retire much earlier than the average person
Most savers can access their private and workplace pensions from the normal minimum pension age (NMPA) of 55. This is rising to 57 in April 2028. You will also be able to access your State Pension at 66 (gradually rising to 67 by April 2028).
Many people opt to retire once they can access their pensions, as they are the primary source of income to fund their lifestyles. Unless you have significant savings outside your pensions, it is challenging to retire and afford to live before you reach the NMPA.
However, this is precisely what the FIRE movement aims to achieve.
By building their pension savings as much as possible, as well as maximising contributions to ISAs and other investments, those who follow FIRE hope to retire much earlier than the average person – often in their 40s.
They will often use non-pension savings to bridge the gap until they reach the NMPA and then access their pension pots to supplement their income for the rest of their lives.
The strategy is very attractive because it allows you to achieve financial freedom early in life and spend more of your time pursuing your passions.
FIRE encourages extreme frugality to build your savings as much as possible
To build enough savings to retire decades before the average person, you will likely need to increase your contributions to pensions, ISAs, and general investment accounts (GIAs).
To achieve this, followers of FIRE make extreme cutbacks to their short-term spending. According to Sky News (29 May 2026), some put as much as 70% of their income into savings and investments each month.
This typically means living a very basic lifestyle and forgoing luxuries including:
- Dining out and socialising
- Streaming services
- Gym memberships
- Expensive clothes
- Holidays
- Cars
All the additional income they save by giving these things up goes into building their savings and investments as quickly as possible.
There are important parallels between FIRE and holistic financial planning
Although FIRE involves extreme budgeting, there are vital financial planning lessons we can take from the movement.
Focus on long-term goals and planning for retirement early
Even if you don’t aim to stop working at 40, it’s always beneficial to consider your long-term ambitions and plan for retirement from a young age.
That way, you’re more likely to achieve your goals.
Be intentional about your spending
Without a budget, your spending can quickly get out of control, meaning you don’t have enough left to make adequate contributions to your savings and investments.
The FIRE movement teaches the importance of being intentional and knowing where every penny is going and why. Even if you don’t go to the extreme lengths they do, finding areas to cut short-term spending so you can save more is usually a good thing.
Take a long-term approach to investing
The FIRE movement focuses heavily on investing early and holding those investments for a long period to generate sustained growth, before eventually retiring.
This may be a more reliable strategy than trying to trade in and out of the market regularly for short-term gains.
Find a way to use your assets to create financial freedom
The ultimate aims of the FIRE movement and holistic financial planning are similar – to use various assets to achieve financial freedom.
Although you may not focus so heavily on retiring early, we will discuss what you want your life to look like while you’re working and afterwards, and then consider how to help you achieve this.
It’s important to balance short-term enjoyment of life with careful long-term planning
For those who are successful, the FIRE movement offers financial independence earlier in life, so they can enjoy more years of retirement.
However, there is a danger that it could be too restrictive in the short term.
You might forgo holidays, days out with the family, or social occasions with friends for 20 or 30 years to achieve an early retirement. This is all time you can’t get back, and you might miss opportunities to create valuable memories.
It’s also worth remembering that life is unpredictable. While you may not want to consider it, you or your loved ones could contract a serious illness or experience a fatal injury before you can reap the rewards of the frugal FIRE lifestyle.
That doesn’t mean you should spend frivolously. Instead, it’s important to strike a balance between short-term enjoyment and long-term planning.
A robust financial plan allows you to spend on things that are important now, such as creating memories with your family, while also building wealth for the future so you could work towards your dream retirement.
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Please note:
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.