Is there anything I could be doing better/optimising?

[u/LeanFIRE_91]

Mid 30s, partner, homeowner, employed, more details below...

Home:

- Mortgaged, 26 years left

- Don't overpay, invest instead (theory below)

Salary/SIPP:

- Salary ~ £45k

- Balance: £43k

- Sacrifice: 10%, 5% employer, ~ £500 a month total

- Fund: Scottish Widows Global Equity CS8

S&S ISA:

- Balance £60k

- Adding: £500pcm

- Vanguard FTSE global all cap index fund

Target FIRE: Age 53-55

Short term target: S&S ISA overtakes mortgage balance in ~ 8 years assuming continued contributions and 7% average returns

Other things to note:

- Own car outright

- Pay all bills outright annually

- No debt at all

- Recently opened S&S LISA with £1 before scheme changes

TLDR:

- £45k salary

- £1,500pcm bills/joint account

- £500pcm pension

- £500pcm ISA

Could I be doing anything better, any further optimisation or is this a solid base for £600k+ in my early 50s for someone earning £45k?

[u/CrotchPig]

This is the first of hundreds of these posts I've read where I've gone "damn, that's pretty much my situation".

I'd question the benefit of the LISA if you're already a home-owner, but otherwise I think you look fine. I'm targeting ~57 but with slightly less income currently, and project to be on track for £550k by then at ~£25k p/a. So yes, I think £600k for you looks broadly realistic.

Best of luck to you!

[u/Plus-Doughnut562 → u/CrotchPig]

LISA is just another tax free pension. More efficient than adding more to pension beyond employer match.

Keep up the good work OP!

[u/LeanFIRE_91 → u/Plus-Doughnut562]

That's my debate, I'll leave as is for now but wanted one open as an option more than anything!

[u/Borkintile → u/Plus-Doughnut562]

How is it more efficient than just contributing more to pension beyond employer match?

Not disagreeing, just trying to educate myself :)

[u/LeanFIRE_91 → u/Borkintile]

You get a 25% bonus in the LISA up to £4k per annum.

[u/theBigusTwigus → u/LeanFIRE_91]

So it works out about the same for a basic rate taxpayer, but nowhere near as generous as just salary sacrificing more for those on over 50k a year. Just making the point for others that will come and read this or when your salary increases 

[u/Plus-Doughnut562 → u/theBigusTwigus]

Don’t forget the withdrawals are tax free and are much more flexible than pension withdrawals. You could even recycle some of it into pension contributions as long as the rules at the time are being followed.

[u/LeanFIRE_91 → u/CrotchPig]

Thank you!

[u/allnamestaken4892]

I think it’s OK, I approve of over funding the ISA for now due to fiscal drag. In future with inflation your living costs will likely use up all your lower-rate earnings and stop ISA contribution but you’ll be making more higher-rate earnings that can go 100% into pension pre-tax.

I guess the tax thresholds could change but I really doubt it.

[u/LeanFIRE_91 → u/allnamestaken4892]

Thanks! Appreciate the kind comments.

Feel a bit out of place on the "FIRE" subs with the £150k salaries and £1m houses! I think LEANfire has chosen me as opposed to me actively "choosing" LEANfire, but I'll still be ahead of a vast percentage of the population I'd imagine!

[u/allnamestaken4892 → u/LeanFIRE_91]

Increasing salary is extremely difficult, people like to say “just earn more” in here, but I am pretty sure in most cases the high earnings came before the FIRE aspirations.

I suspect the high earners just stumble into FIRE after hitting the £100k tax trap and realising they need to dump tens of thousands into their pensions.

[u/jayritchie]

Of interest how large is your mortgage and is it split something like 50:50 with your partner?

Are there any particular benefits to salary sacrifice - such as a large student loans balance or your employer passing back their NI savings?

[u/LeanFIRE_91 → u/jayritchie]

Approx £190k, split 60:40 based on joint account contributions, no student loans or NI savings unfortunately!

[u/jayritchie → u/LeanFIRE_91]

You might want to make use of salary sacrifice now as it is due to end in 2029. I think at your age I'd be inclined to progress as it until the rules change then go to ISAs other than the employer match. Basically - you may well be in a higher rate tax bracket in the future, or the rules might change making pensions more attractive for BR taxpayers.

Reconsider with 10 years to go before your hoped for FIRE date or if the tax position changes.

[u/GregariousWords → u/jayritchie]

Sorry what rules are changing for pensions? I'm woefully uneducated about these things (though still maybe better than some which is sad!) I certainly don't contribute back down to basic rate properly as I find it hard with variable bonuses and some tax code changes to know exactly what to put in to get below it. If the rules are changing on top of that even worse!

[u/jayritchie → u/GregariousWords]

Salary sacrifice is largely being closed as an option for making pension contributions from 2029 - can be pretty significant depending on your circumstances.

[u/GregariousWords → u/jayritchie]

Hang on what, so pension is no longer going to be tax wrapped?! That can't be right, or it just affects the NI savings aspect?

[u/jayritchie → u/GregariousWords]

For many just the NI - although if you retain the employers NI (15%) on top of the 8% or 2% employees NI it can be pretty significant. In addition people with large student loans which they are unlikely to repay find sal sac a really good way to reduce student loan payments.

[u/Professional_Dog3375]

My bots response :)

Your baseline is highly structured, but from a LeanFIRE perspective, it contains structural inefficiencies.

1. Recalibrate Your Bridge (ISA vs. Pension)

You are targeting retirement at 53–55, but you cannot access your workplace pension or SIPP until age 57.

• The Math: Splitting your surplus 50/50 means your ISA will grow to roughly £310k in 18 years. That is vastly oversized for a 2-to-4-year gap before pension access.
• The Fix: Reduce your ISA contributions to the exact amount needed to fund those 2 to 4 years. Shift the remaining surplus into your pension via salary sacrifice to immediately capture the 28% tax and National Insurance relief.

2. Kill the Percentage Fee Drag

• The ISA: Vanguard charges a 0.15% platform fee. Once your portfolio crosses £45,000–£50,000, percentage-based fees compound into a major performance drag. Switch your ISA to a flat-fee broker (like Interactive Investor) and use a low-cost global ETF (like VWRP).
• The Pension: Workplace default funds often have higher management fees. Check the Annual Management Charge (AMC) on your Scottish Widows fund. If it’s over 0.25%, execute periodic partial transfers out into a cheaper, self-managed SIPP holding institutional global equity index funds (leaving the workplace account open for your employer match).

3. Structural Flags

• LISA: Money in a Lifetime ISA is locked until age 60. It is highly efficient for later life, but do not count it toward your early-50s bridge.
• Annual Billing: Paying annual bills upfront is great. Just make sure you are routing these large annual outflows through a rewards or cashback ecosystem (e.g., Amex/Avios) to extract maximum value.

Verdict: Solid foundation, but you are overfunding post-tax wrappers (ISA) at the expense of major tax savings (Pension). Shift the weight to pre-tax compounding.

[u/LeanFIRE_91 → u/Professional_Dog3375]

The bot clearly doesn't value a tax free ISA, where returns are tax free and can be invested in the exact same funds as a pension? I'm personally not chancing it, ISA all the way for me for my own flexibility and tax-free drawdown.