Big picture, my approach to FIRE ¹ has followed all the usual principles:

• Minimise spending where possible
• Maximise my earnings
• Invest wisely and aggressively

But, contrary to my expectations, the further I get, the less certain I feel.

Initially, the strategy seemed clear. Multiply your expenses by 25 and then charge towards that target as quickly as possible.

But at the same time as I worked towards that goal, life was happening. My expectations were changing. My priorities were adjusting. 

At one point it was all about finding exciting work that would stretch me and position me for the next promotion. Now I have children, and I get more enjoyment from playing with them at the weekend than jetting off to a conference.

These days I’m even less sure what my target even is. But I’m still making good progress towards financial freedom.

I’ve started calling this path Laissez-FIRE.

The background

I’ll save you the long history of my childhood.

The short version: I grew up with frugal parents and grandparents. I knew my way around a savings account, and how to avoid over-spending at the supermarket.

I tested these principles in the corporate world. My first job involved finding ways to slash spending in the wake of the 2008 financial crisis. It was every bit as grim as it sounds.

On the plus side, I was fortunate enough to come across the FIRE movement in my twenties. At that point, I lived in a mortgaged flat with my girlfriend.

Fast forward a few years, and we’re married with kids. We now live in a mortgaged house – close enough to London to maintain our careers.

On paper, that’s not the set-up for a rapid advance to financial independence.

Investing the boring way

In the intervening years though, we’ve been stashing as much as we can into passive global equity funds in our ISAs.

At first, we could only afford £2,000 each year, but in recent years we’ve been able to max out the £20,000 ISA allowance.

We have both earned above-average salaries since graduating and have maintained mid-five-figure salaries over the years. And by my reckoning, we have directed more than 50% of our net earnings into either the mortgage or investments for several years now.

Perhaps I should have made it to six-figures. But I was always the one who would leave the office when the work was done, rather than get stuck into someone else’s pet project after hours.

Not too many regrets there, in all honesty.

We’ve also taken advantage of employer pension schemes of varying quality, and transferred the investments out to SIPPs whenever we got the chance, gaining more control over our investments.

FIRE in the hold

I’ve been hoovering up FIRE blogs and articles for over a decade, so it seems like this is where I’m supposed to talk about my progress.

• How many years are left until I hit my FI goal?
• What percentage of my ISA goal have I achieved?

But I actually don’t know. I haven’t set any goals yet.

It’s about the journey, not the destination

A couple of things have repeatedly caught me out over the years.

I’ve discovered I’m an awful market timer. Just ask me about the Bitcoin I sold for the price of a Big Mac before most people had even heard of it.

At least I’ve learned my lesson there. All my investments are passive now!

Another is that – despite being a habitual planner – I either can’t or don’t account for all of the things that might crop up in life.

Everyday life decisions with big ramifications

After graduating, both of us had found work in London.

Now, I wasn’t too fussed about living on the tube map. But equally, commuting from Stoke for 8am starts in the centre of London didn’t seem like the smartest move.

We knew we were buying property in an expensive suburb, but that seemed a fair trade-off. Living close to the capital helped both of us to earn decent salaries. 

Eventually, I figured, we’d sell up and move to the North or the South West.

After all, property only seemed to go up in value. And once we sold up, that might give us enough to buy the next place outright.

I’d also calculated that having kids wouldn’t be financially ruinous. We were quite happy to scour charity shops and rely on hand-me-downs. Nursery would be expensive, but there were ways to mitigate that.

Sounds good so far.

Where you live can be surprisingly sticky

Suddenly though, I’ve got a young kid in an ideal school that I fought tooth and nail to get them into. If I move to another county, all that hard work goes up in smoke.

Grandparents are visiting all the time, too, and the kids love seeing them.

Additionally, I’ve unexpectedly become a carer. Proximity to relatives and specialist hospitals is not just a convenience, it’s a central part of my life right now.

The upshot?

Having kids has actually been surprisingly cheap, in terms of day-to-day costs.

But with my plan to move to a cheaper area thwarted, I need to find a suitable house for the next decade or so. In one of the most expensive parts of the country.

Oops.

Children skew house prices

What I’d once though basic features of a family home, like a driveway and a garden you can kick a football in…around here those come with properties approaching seven figures.

And if I also wanted to guarantee my kids access to a top-performing secondary school in this area? Well, catchment area house prices are the ultimate middle-class stealth tax. I’d be straight into the £1m-plus house price bracket.

The point isn’t that we deserve sympathy or a high-performing school. I’ve accepted that I’ll bleed mortgage interest to stay near grandparents, maintain my caring commitments, and give my kids a potential better future.

Rather, it’s that I’ve often been caught out by things I didn’t anticipate.

When I originally scouted out suitable suburbs for our jobs, it never occurred to me that a few years later we’d have tied ourselves to the area we chose.

In turn, I had never expected to be debating the merits of £1m houses, or contemplating mortgage terms that could end beyond my ideal retirement age.

But here we are.

So is my whole FIRE plan scuppered?

Let’s talk numbers. Remember those ISAs I mentioned?

If we followed a 4% Safe Withdrawal Rate and assume that our expenditure rises only with inflation, the ISAs could cover about 90% of expenditure – excluding the mortgage.

I don’t know if you found the 90% figure surprising, but I certainly did. I’d never actually checked until I decided to write about it.

As I said, I’ve not set any targets, or even thought about them. But plugging away and cost-averaging into index funds gathers steam over time.

Add the SIPPs on, and we’ll be in a good place in a couple of decades when we can (hopefully) access our pension cash.

The key achievement here is building resilience.

There’s enough in the ISAs to weather some time between jobs, and enough in the SIPPs for us to maintain our current spending when we reach retirement age.

You may be thinking this is about to pivot into a smug retirement post. But that would be ignoring those key words above: excluding the mortgage.

Yes, as good as things look, I’ve got a six-figure hole in my plan.

And it will probably get worse.

What’s next?

We have some fairly big choices to make.

The main one is deciding on the next house.

I’ve drawn a fairly tight oval in Rightmove of acceptable postcodes, taking into account everything from family to hospitals to secondary school catchment areas.

But even within that boundary, there’s a vast range of properties – from terraced shoeboxes to century-old semis with generous living spaces.

A FIRE purist might say buy the cheapest house you can, and retire as early as possible.

But I’m expecting to live in my next house for at least a decade, with children growing up. Right now, they might be happy with a tiny bed in the corner of a room and a teddy, but eventually they will need their own spaces to live and study. If we’re lucky, they’ll have some friends they want to invite over.

Finding a comfortable house for all of us could mean borrowing hundreds of thousands of pounds on top of my existing mortgage – and paying potentially six figures in interest costs alone.

I’m less worried about the interest than you might think, given that inflation will reduce the value over time. But servicing it each month is still a strain.

Even with the perfect house, nothing is certain

Unless the UK magically fixes its housebuilding problems in the next ten years, when my kids reach 18, they’re unlikely to immediately rent their own properties to live in. Let alone buy.

So perhaps I’ll be moving at that point to find a place with an annexe – or as I’m told they’re now called, grad pads.

Or maybe I’ll be surprised again and find we are all so settled that even I’m opposed to relocating somewhere cheaper.

Eventually, once our children have their jobs sorted, we might be weighing up whether to raid the ISAs to see if the Bank of Mum and Dad can help with house deposits.

The only conclusion I can draw is I don’t know what life will be like in ten years, let alone 20.

Some off-the-cuff principles of laissez-FIRE

I wouldn’t want to suggest that the laissez-FIRE approach is best for everyone.

If you’ve got a solid plan that you can stick to, more power to you.

However I’ll try to boil my personal principles down to some key pointers:

• Focus your spending on a few specific things that give you happiness. You don’t know when you’ll retire, so it’s important to enjoy the journey.
• Figure out how you can earn money without driving yourself crazy. A slightly longer but happier journey will work better in the long run.
• Automate your investments and then ignore them as much as possible. As Charlie Munger once said, the big money comes from waiting.
• Measure success by experiences and life goals at least as much as financial targets. If every bit of spending is construed as a delay to your FIRE date, you risk stripping out all enjoyment.
• Projections and targets are best when they’re vague. There’s no point disappointing yourself when the goalposts inevitably move.
• Be kind to yourself! You can’t get every promotion, smash every bonus and choose the optimal financial option every time, so relax and trust the process.

What does ‘Retire Early’ look like for me?

Some people will say their only goal is to retire completely, as fast as possible.

I used to feel like that.

Thankfully, I’m not completely burned out on my career yet. If anything, I see career flexibility as part of the plan.

I’m quite happy to try out different jobs and employers, to see what works for me and my lifestyle at the time. The job that suited me ten years ago wouldn’t suit me now, and I’m sure the same will be true in the 2030s.

I want a role that pays me enough to feel worthwhile, but doesn’t excessively drain my energy and mental health. To my mind, it’s madness to run myself into the ground just to build a bigger retirement pot.

In the long run, I’d like to emulate a friend’s ‘stick it’ retirement. As he puts it, he takes on various contracts and ad-hoc pieces of work, with sufficient money in his SIPP that when he finds himself disliking the work or the people, he can tell them where to stick it.

If my ISA swells, that might give me more scope to support my kids. It could give me more flexibility over when and where I move, and give me more freedom with work.

Or maybe my ‘stick it’ threshold will have fallen so low that I’ll barely be working at all!

The one thing I know for sure is that my situation will change again before I’m ready to retire.

I have no idea what I’ll do at that point.

But thanks to my laissez-FIRE habits so far, at least I’ll have options.

1. That is, Financial Independence Retire Early.[↩]

Hey, do you know your tax brackets? I’m talking about the bands that determine whether you’re a basic (20%), higher (40%), or additional-rate (45%) taxpayer.

Everyone knows their height and their shoe size. An occasional show-off can even tell you their inside leg measurement.

But many of us have no idea where the various tax brackets start and end – nor where our income falls within these bands.

True, the ongoing – and increasingly controversial – freezing of personal tax allowances and income tax thresholds has made people more aware.

Yet too many people still don’t know how much of their salary they get to keep, or even how to work it out.

Let’s address this with some concrete numbers. We’ll then see what your tax bracket means for your take home pay.

2026/2027 UK tax brackets

The rate of tax you pay depends on your total income from all sources. This includes salary, interest, dividends, pensions, property letting, and so on. ¹

You add up all this income to get your total income figure.

You then subtract your personal allowance from the total to see which tax bracket you fit into. More on that in a moment.

For England, Wales, and Northern Ireland, the income bands after allowances are currently:

Income Tax Rate	2025/2026	2026/2027
Starting rate for savings: 0%	£0-£5,000	£0- £5,000
Basic rate: 20%	£0- £37,700	£0- £37,700
Higher rate: 40%	£37,701-£125,140	£37,701-£125,140
Additional 45% rate	£125,141 and above	£125,141 and above

Source: HMRC

Note: If your non-savings taxable income is above the starting rate limit, then the starting savings rate does not apply to your savings income.

Scotland has its own (similar) tax rates. Refer to the Scottish Government for the gory details.

If you prefer to think in terms of tax bands – that is, before deducting the personal allowance – then for England, Wales, and Northern Ireland these are:

• Personal allowance at 0%: £12,570
• Basic rate 20% – £12,571 to £50,270
• Higher rate 40% – £50,271 to £125,140
• Additional rate 45% – £125,141 to the moon

The freeze on the personal allowance and higher-rate thresholds has been extended until April 2031. This means fiscal drag will continue to pull more people into higher tax bands as wages rise.

Complicating factor alert! If you earn over £100,000 you’ll pay a marginal rate of 60% on some of your income. What joy! More below.

2026/2027 personal allowance

The tax year runs from 6 April to 5 April the next year.

All of us have a basic level of income – whether we’re employed or self-employed – that we can earn during the tax year before we pay income tax.

But once your allowance is used up, the government starts to take its cut via income tax.

Everyone starts with the same personal allowance:

• For 2026/27, this personal allowance is £12,570

Your personal allowance may be bigger if you qualify for Married Couple’s Allowance or Blind Person’s Allowance. It’s reduced if your income is over £100,000. We’ll get to that in a minute.

Note the £12,570 personal allowance is the same as it was in 2021/22, and it’s currently frozen until April 2031. This fiscal drag strategy has generated extra government revenue by pulling ever more income into taxation over time.

As your salary rises, proportionally less is covered by the tax-free personal allowance. You’ll therefore lose a greater share of your income to tax.

Pensioned off

Another consequence of freezing the personal allowance is that very soon it will be insufficient to fully cover the state pension.

Following a 4.8% hike in April, the state pension for this tax year is £241.30 a week, or £12,547.60 a year – just under the £12,570 personal allowance.

But if the pension continues to rise while the personal allowance stays frozen, then over the next few years millions will pay tax on their state pension. That seems a clumsy way to shuffle money between the state and its pensioners.

Even today, it only requires a small amount of additional taxable income from other taxable sources to take a pensioner over the personal allowance.

Blind Person’s and Married Couple’s allowance

There are two other personal allowances you might qualify for:

• Blind Person’s Allowance – £3,250
• Married Couple’s Allowance – £1,260

These are added to the standard personal allowance, if you qualify. They can give you or your spouse a slightly higher personal allowance.

• MoneySavingExpert has a good guide to the Married Couple’s Allowance.

The 60% tax trap for those earning £100,000 or more

If you’re on a six-figure salary then I’ve got some unpleasant numbers for you.

Anyone with an income of over £100,000 sees their personal allowance reduced by £1 for every £2 of income above the £100,000 threshold.

This effectively pushes up the marginal rate of tax you pay on income between £100,000 and £125,140 to 60%.

On earnings above £125,140, the 45% additional tax rate applies.

Ironically, you’re taxed at a lower rate on your income above £125,140 than on what you earn between £100,000 and £125,140. That’s because your personal allowance has been totally whittled away by this point.

The effective 60% marginal rate you’ll pay on the £25,140 chunk of income between £100,000 and £125,140 is far higher than official tax rates indicate.

Apparently it is the second highest marginal tax rate in Europe, beaten only by a small village called Munkdeal in Sweden with a 70% marginal rate.

Note: there are extra complications to consider if your family is eligible for Child Benefit or support for free childcare. See below.

Take cover!

If your income falls within the £100,000 tax trap band, there’s a strong case for increasing your pension contributions by enough to reduce your taxable income to below £100,000.

Rather than paying 60% tax on your income above £100,000 to HMRC, you’ll instead get generous tax relief on your extra pension savings.

Remember: you can put up to £60,000 into a pension every tax year.

The child benefit booby-trap

Got kids? There’s a similar effective hike in the marginal tax rate when either parent earns over £60,000 a year.

Child benefit is available to parents of children under 20. But this benefit is progressively withdrawn above the £60,000 threshold, via a fiddly High Income Child Benefit Charge that sees you repay 1% of your child benefit for every £200 you earn above the threshold.

The High Income Child Benefit Charge starts at £60,000 and fully removes child benefit at £80,000.

For example, if you earn £70,000 – that is, £10,000 above the income threshold – then you would need to repay 50% of the full child benefit amount. (Because £10,000/£200 = 50).

At £80,000 you’ll pay it all back. (£20,000/£200 = 100).

Depending on how many kids you have – and hence how much child benefit you’ll be repaying – this could equate to an effective tax rate of as much as 56% on earnings between £60,000 to £80,000 with three qualifying children.

Again, you might consider increasing your pension contributions to keep your child benefit whilst improving your financial future.

How tax brackets determine the tax you pay

Let’s run through a couple of examples to see how this all works.

Basic-rate tax payer

Let’s say you will earn £45,000 in 2026/27 from all sources. Your taxable income is £45,000 minus your personal allowance of £12,570.

So £32,430.

This means all your income is in the 20% tax bracket, as it’s less than £37,701 in the first table above.

In practice you’ll pay no tax on the first £12,570 you earn, and 20% on the remaining £32,430.

You’ll therefore pay £6,486 in tax on your income.

Higher-rate payer

Now let’s imagine your total income adds up to £60,000.

By the same method (£60,000 minus £12,570) your taxable income is £47,430.

The first £37,700 of this will be taxed at 20%.

The rest – £9,730 – is taxed at 40%.

You’ll pay:

• Basic rate tax of £7,540
• Higher rate tax of £3,892
• Total tax paid is £11,432

In nearly all cases you’ll also pay additional and hefty National Insurance contributions.

National Insurance

National Insurance works separately from income tax. But in practice it’s just an extra tax you pay on your earnings.

The rates come with their own fiddly rules – and in recent years the Government has been prone to messing with them.

National Insurance rates

Currently, most employees pay employee National Insurance at 8% on earnings between a ‘primary threshold’ and an ‘upper earnings limit’, and 2% above that.

In terms of your salary, these so-called Class 1 contributions are charged at:

Your salary	6 April 2026 to 5 January 2027
£242 to £967 a week (£1,048 to £4,189 a month)	8%
Over £967 a week (£4,189 a month)	2%

Source: HMRC

Your employer also pays National Insurance contributions, based on your salary. This leads to the technique known as salary sacrifice.

With salary sacrifice you give up some pay in return for another benefit – usually extra pension contributions. You get the benefit, and you and your employer also pay less National Insurance.

However the government is planning to restrict salary sacrifice from 2029. Act now if you want to make the most of the existing opportunity.

Self-employed people make different National Insurance contributions, depending on profits. These are worked out via a self-assessment tax return.

National pastime

Most people find it even harder to keep track of what they’re paying in National Insurance than income tax. National Insurance rates are therefore less politically contentious than income tax rates when raising extra revenue.

Hence the National Insurance rates and thresholds have been repeatedly moved around over the last few years.

For example, you may remember there was a hike in employer National Insurance contributions (NICs) in the October 2024 Budget. The net result was a higher ‘tax on jobs’, as the tabloids and opposition MPs put it.

You don’t directly pay employer’s NICs. The company does. But the odds that employers absorbed all the cost of these hikes without a hit to wages or job creation seems remote to me.

Anything else we could write about National Insurance will not be exhaustive enough to stop someone saying “what about X?” in the comments.

Don’t blame us! Blame the labyrinthine UK tax system.

In a sensible world we’d merge National Insurance with income tax. This doesn’t happen because (a) supposedly the money raised is set aside for state pensions and other welfare funding (it’s not) and (b) no UK government wants to be seen setting an income tax rate that’s explicitly above 50%.

• You’re a masochist? The government has more on National Insurance.

Your tax bracket determines your take home pay

Like many students, I was philosophically a left-wing tax-and-spender.

It was a pretty low-stress position to hold when I paid no taxes…

…but then I got a job.

Suddenly I saw how much money was taken out of the meagre pay I received for ramming my head into the coalface for 40 hours a week. Economically speaking, I turned more to the right. ²

As my dad used to say, quoting someone else:

If you’re not a socialist at 20 you haven’t got a heart.

If you’re not a capitalist at 30 you haven’t got a head.

I’d add: if you don’t know your tax bracket then you haven’t got a clue.

Most of us care about what we get to keep, after tax. We’re not so preoccupied with how our taxes help to fund the NHS or to pay interest on the UK’s national debt – vital though all that may be.

So when we start working – and start paying taxes – we’re shocked by how our pay shrinks on the way to our bank accounts.

Beyond the sticker shock

Knowing your tax bracket is about more than just stopping you from fainting when you see your take home pay, though.

Armed with your knowledge of tax brackets, you can be more strategic about adding money to ISAs and pensions.

As we’ve seen above, the tax system gets progressively more punishing as your salary passes through various thresholds. You might therefore prefer to put more of your higher-taxed earnings into a pension, for example.

Thanks to pension tax relief, you’ll sacrifice less of a share of your post-tax disposable income, while you’re also building up a bigger retirement pot.

A fiscal drag

The tax take from British workers has been rising for over a decade.

This was partly achieved by ‘fiscal drag’.

Fiscal drag sees rising salaries pulling more workers into the higher-rate tax bands, because the tax band thresholds and allowances are frozen or only raised by a bit – despite high inflation.

After the financial crisis of 2008/2009, the threshold for higher-rate tax was actually explicitly lowered, despite inflation running above target. That move dragged millions more people into the higher-rate tax bracket.

National Insurance rates also rose for higher-rate tax payers. And the wheeze that cut the personal allowance on incomes above £100,000 was introduced.

True, the additional rate of income tax was reduced from a short-lived 50% to 45% in 2013. And eventually both the personal allowance and the higher-rate tax thresholds were lifted.

But as we’ve seen above, they were later frozen – a freeze lately extended to April 2031.

In short, if you remember the arcade game Frogger, that’s a good analogy for the ever-changing UK’s income tax landscape.

Bring me higher (tax) love

Some may quibble with my simplified narrative. But it’s directionally correct.

See this graph from the IFS, and pay particular attention to the yellow line:

Source: IFS

You can see that the numbers paying higher rates of tax (yellow line) has hugely increased since 2009 – let alone 1990.

Perhaps that’s fine. You might even argue the rise in higher-rate taxpayers is a reflection of rising income inequality as much as frozen tax bands.

We can debate that another day. I’m just pointing out how things have been going – and what might happen next.

We just lived through a period of historically high inflation. After peaking in double-digits in 2022, inflation was still an above-target 3.5% as recently as March 2026.

Yet the personal allowance and the higher-rate tax thresholds remain frozen.

Unless the government changes course, as many as one in four workers will be paying higher-rate and additional-rate taxes by 2031.

A higher calling

If you’re a higher earner wondering why you’re not feeling as wealthy as you thought you would, higher taxes will have something to do with it.

Okay, and higher mortgage rates and energy and food bills since 2022.

(Not to mention hedonic adaption! But let’s stay on-topic.)

The reality is being a higher-rate taxpayer no longer means you’re wealthy.

Yes, I’m aware that the gross median annual earnings in the UK for full-time employees is still under £40,000 – and so well below the higher-rate bracket. Nobody needs to get on a soap box to shout at me.

But the point stands. Paying higher-rate tax no longer makes you Bertie Wooster.

Resistance is tax-efficient

I’m all for taxing, spending, and the UK offering a decent welfare safety net.

But I’m not going to leave a tip.

I’m a law-abiding citizen. However there are sensible and legal steps you can take to mitigate your total tax bill.

• Use your ISA allowance and/or a pension to shelter your savings as much as possible.
• Take steps to manage capital gains tax.
• You could also consider VCTs and EIS schemes if you’re up for the research, extra costs, and greater risks.

Higher-rate taxpayers should consider making maximal contributions into their pension. Most people are allowed to pay up to £60,000 into a pension in a year without any tax penalties ³, so there’s lots of headroom.

If you can cut your spending to allow for very big pension contributions, then you might be able to get the higher-rate tax you’d otherwise pay entirely wiped out by tax relief. Depending on how much you earn, of course.

Bigger pension contributions accelerate the growth of your retirement pot. Just remember you’ll almost certainly have to pay some tax when you drawdown your pension income later.

The bottom line? Taxes are continuing to rise. Take cover, or take the pain.

Note: This article was updated in June 2026 with the latest figures for UK tax brackets, personal allowances, NICs, median pay, and more. Comments below may refer to old numbers. Please check the dates if unsure.

1. There exist allowances and reliefs for some of these income sources, such as dividends and savings. These can reduce how much of that income is taxable.[↩]
2. To be clear, I’ve no problem with a reasonable level of taxation, public spending, and redistribution. But back then I had no idea what was already being taxed and spent![↩]
3. Or 100% of income, whichever is lower.[↩]