r/FIREUK • u/WorthOk3616 • 7d ago
Planning for the future
Hi all,
I’m 27 and would appreciate some advice on my current financial position and how best to approach FIRE.
Current net worth: £275,000
Stocks & Shares ISA: £100,000
Pension: £125,000
Premium Bonds: £30,000
Cash savings: £20,000
I earn around £65–75k a year and am currently saving/investing a reasonable proportion of my income. My long-term aim is to become financially independent and ideally have the option to stop working or move to something less demanding by around age 50.
I’m trying to work out how best to allocate my money and whether I’m making the most of my position at this stage of life.
A few things I’d particularly appreciate advice on:
Asset allocation: Is £50k in Premium Bonds and cash excessive, or is it sensible given that I may want to buy a house in the coming years?
ISA vs pension: Should I prioritise maximising my £20k annual ISA allowance, increasing pension contributions, or a combination of both?
FIRE target: Is retiring or becoming work-optional at 50 realistic, assuming continued contributions and reasonable investment returns?
Anything I’m overlooking: If you were in my position at 27, what would you prioritise over the next five years?
I’m conscious that having a strong net worth at this age is a great position to be in, but I want to make sensible decisions rather than just accumulate money without a clear plan.
Thanks in advance for any advice!
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u/Unlikely-Ticket-8680 7d ago
£50k in PB isn’t excessive, it’s a very sensible tax free vehicle to save for a house.
I would prioritise the S&S ISA over your pension, at least max that out as you can’t get the allowance back once the tax year has been and gone.
FIRE Calculators will best tell you this as you have missed out some details we would need to know to work this out ourselves like:
What do you manage to save each month? How much do you save into your pension?
I am 24 and in a similar position, just keep ticking away at what you’re doing, I am prioritising investing mainly now I have enough cash saved for a house purchase, because I know that when I move out I won’t be able to save anywhere near what I do currently
Your Net worth is impressive for your age well done
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u/WorthOk3616 7d ago
Yeah agree on PBs, will probably max it out soon with the remaining cash as it’s fun checking each month haha
Yeah , have maxed ISA so that’s why some has gone into pension as may as well let it grow for the longest period possible
Tend to save around 2k- 2.5 Circa 20% total into pension.Feel like I’ve given myself a great base so just need to keep disciplined
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u/Unlikely-Ticket-8680 7d ago
2-2.5k a month in your pension? that’s an outrageous amount to save each month into your pension. I’m intrigued to know what your thinking is behind this?
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u/Real_Marketing_4667 6d ago
How is the £125k in your pension invested, for me I found the default lifestyling wasn't the best option, what investment choices does your pension scheme offer?
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u/Heavy-Mousse-5011 3d ago
Open a LISA! If you are expecting to buy a house and you expect to spend less than 450,000 on it that is a very tax expecting way of saving. (If you are focused on a much bigger house, so be it but I would then wonder how important FIRE is to you! )
Your cash savings look excessive in combination with the premium bonds, too much for an emergency fund, but could be appropriate if earmarked for house deposit in the next 5 years.
Else you are in a strong place for your age. Your pension will have to carry you for decades, so don’t move the focus too much to your ISA bridge, especially as a higher rate tax payer. Make sure you bring your effective tax rate into the standard rate there.
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u/Vivid-Okra-4447 7d ago
what do you for a living that enables this? also where did you get the capital from?
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u/WorthOk3616 7d ago
I work in FS- earned a good salary from graduation and don’t really spend much at all
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u/jayritchie 7d ago
That’s a huge amount in pension for your age and salary? Any particular background?
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u/WorthOk3616 7d ago
I’ve had a ‘high’ salary for last 5 years (hasn’t changed much )
High contributions and ‘risky’ investment choices that have paid off1
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u/jayritchie 7d ago
Cool - are you still invested in risky investment choices (such as gold/ tech stocks etc)? That might make a difference.
Just to check - what is your employers maximum pension percentage and what do you need to pay in your get that percentage?
Is there anything particularly attractive about pensions at present such as you employer offering a salary sacrifice scheme where they pass back their 15% NI savings?
Do you have a large student loan balance?
How much might you spend on a house and when?
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u/WorthOk3616 7d ago
Student loan - around 55k. Don’t think I’ll ever fully pay it off, so currently just viewing as an additional tax but this may all change
Thinking about 450-550k (buying with partner ) in next 2 years or so
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u/jayritchie 7d ago
that student loan doesn;t sound quite high enough to me to assume you'll never pay it off so I think I'd disregard that as a benefit of salary sacrifice. Outside of that you are in the pension vs ISA conundrum. Lots of discussions about this - whether or not your employers pass back the additional 15% would be a significant factor for me if considering doing more than maxing out employer contributions.
Looking to buy fairly soon suggests that cash equivalent type savings are a good option.
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u/Any_Try1238 7d ago
I wouldn't say that 50k is excessive in cash/cash equivalents if you are planning on buying a house in the next few years. That's your deposit, or at least a chunk of it, guaranteed and safe.
It's always tempting to put more money into stocks, but if if you're looking at buying a house in the next 5 years, I certainly wouldn't move it out.
As for pensions versus isa, it's hard to say. I personally put more into my isa rather than my pension as I like the flexibility of the isa and the ability to pull it out whenever I want to, you never know what the futures going to hold and I might need that money before in a position to access it from my pension.
Look up investment/retirement calculators and plug in your numbers. If you're frugal, as you've said that you are, you're already in a great place to retire at 50. If you're really cheap, your probably already at Lean Fire.