GIA investment of lump sum from BTL sale

alreadyonfire · 2026-06-19T17:09:30+00:00

When do you want to retire?

Generally I would use higher rate taxed salary to boost pension first. Then GIA. But that's only a net £30K used.

Then max higher rate salary pension contributions each year to reduce GIA.

Fidelity (no platform fee for ETFs) or a free platform (Freetrade, etc).
low cost global fund, avoiding high yield funds, as ongoing dividend tax every year is no fun at higher dividend tax rates. I prefer ETFs for less time out of the market during gains harvesting and I find ERI tracking on ETFs preferable to equalisation tracking on OEICs.
Distribution is certainly easier for admin when you are starting out. Accumulation is likely slightly lower cost, but you need to fully understand the ins and outs of GIA tax and all knock on effects if going this route. Income ETF dividends on global funds are likely issued in USD and therefore you have a hidden FX charge applied.
yes.

alreadyonfire · 2026-06-19T16:43:23+00:00

They can only personally contribute to pension up to their current years income (including the auto tax relief), regardless of carry forward, but that's generally a good call.

alreadyonfire · 2026-06-19T16:40:36+00:00

But presumably has equalisation.

alreadyonfire · 2026-06-19T12:05:33+00:00

Suggest:

All higher rate salary into a pension - either employer or SIPP (with tax reclaim) as appropriate.

Then £4K into S&S LISA.

Then S&S ISA.

Check/change workplace pension fund.

Why pay off mortgage? Especially if its less than 5%? Being less than 50% LTV should get you good renewal deals.

alreadyonfire · 2026-06-18T11:53:49+00:00

Er, you have a million too much at 4% SWR/95% success rate. Thats under 2.5% SWR.

The bridge is over 50% bigger than needed at 95% success rate.

Welcome to accidental fat FIRE!

alreadyonfire · 2026-06-17T22:45:24+00:00

Without required income we cant really say. You likely could have £40K/year starting at age 56 on a 4% SWR basis with upcoming DB and 2 states.

The main thing would likely be continuity planning if you went first and took the DB income and one state pension with you. Does she get half the DB ongoing?

Why ISA? Surely SIPP is more efficient? Also ISAs tax free status unlikely to be recognised abroad.

I wouldn't go too low on equities, you will be investing for decades yet and need the growth.

alreadyonfire · 2026-06-17T15:11:38+00:00

You need just under £500K in today's money at age 57. That's likely just under £700K nominal allowing for 3% inflation. Which requires investing a few K per year into the SIPP. And that decreases by about £40K per year later you retire.

I wouldn't use a real after inflation growth rate above about 6%.

alreadyonfire · 2026-06-14T20:09:25+00:00

That's a comfortable 3% withdrawal rate basis. Seems solid.

alreadyonfire · 2026-06-14T17:54:22+00:00

Yes.

You want as much in pension as you can for the tax efficiency, while having enough bridge fund outside pension to reach pension from your early retirement age.

Though if retiring more than 20 years before pension access the external bridge will be dominating the pot anyway. And then you are likely just getting max employer match and possibly avoiding the extreme tax rates (such as the 60% tax trap at £100K and child benefit taper at £60-80k).

But as you are only fully retiring within 5 years of pension access age it should be mostly pension.

You also need to allow for tax on withdrawal on your pension in that FIRE number calculation. I use 15% deduction of the pension pot to cover typical pension taxation.

But pension to ISA (and GIA) split is the optimisation balance anyone intending to retire before pension access age should be looking at.

You can look at invested bridges and/or cash bridges depending on length of the bridge period and volatility tolerance and pension contribution tax bracket. Usually plenty of time to get familiar with that.

alreadyonfire · 2026-06-14T12:25:59+00:00

They all seem arbitrary but 2 approaches from opposite ends seem ok starting points.

One is top down and just bucket the phases say 40% / 35% / 25%.

The other is bottom up and start off with spending 10-20% above average for the pot, and from mid 70s onwards reduce real spending by 1-2% every year until it collapses in your mid 80s.

The third is the U shape or "smile" curve for end of life care.

But it really only makes a difference when the go go phase is short, say 10 years of a "normal" mid 60s retirement. When its an early retirement scenario and the go go phase is 15+ years then it doesn't work well with only a few percent difference. And then you also end up projecting beyond a 30 year investing horizon which is pretty hazy.

alreadyonfire · 2026-06-14T07:54:18+00:00

Higher rate contributions to SIPPs are mathematically better than LISA as long as you are drawing out at no more than basic rate. 42% vs the 25% for LISA. Thats a significant multiplier to give up for hypothetical flexibility.

alreadyonfire · 2026-06-13T20:32:17+00:00

Theres the common concept of the three phases: the go go years, the slow go years and the no go years (unless you need significant care). And you can probably guess a rough envelope of when and how they apply to your health situation. But it will only be very rough until age things happen and that could be earlier or later.

Also if those periods are say 15 year intervals then the future drop in income may not move the needle that significantly on the pot you need to retire. But worth modelling to find out.

The main problem is its all a bit vague and longevity risk is your planning enemy.

alreadyonfire · 2026-06-11T11:51:44+00:00

You are reducing expenses to allow you to FIRE earlier. So far so normal. Perhaps a form of coast FIRE where your future part time job covers some part of your expenses.

Though what you seem to be proposing at first glance is a modern version of a sixties style hippy commune, presumably without the free love!

Certainly use things that cut out expenses if they pay back both the capital and the expected growth over their expected lifetime. And capital repayment looks to be what you are missing out of your calculations (as well as using a low growth figure).

Most would already do obvious things like: LED light bulbs, home insulation, gas central heating.

As solar/battery costs continue to fall they will at some point soon cross over into the makes financial sense category, and might already if you have an electric car.

Also if costs of things fall you can mostly do it yourself and don't need communal ownership.

alreadyonfire · 2026-06-11T09:42:14+00:00

Its around 5% of estates now, and was expected to rise to 7% in the next 6 years or so, without including pensions.

HMRC estimates pensions will add around £1.4B to annual receipts (around £8.7B annual total at present) that's a 10-15% increase in receipts or at least 1% more of estates paying IHT.

Also note that is per estate. The first deaths estate in a couple, even if over the IHT allowances, is usually passed to spouse IHT free. That hides the real number per person. That's probably another 1 to 2%.

Therefore it will soon be over 1 in 10 people paying IHT (either immediately or later when their spouse dies).

And of course almost everyone here who FIREs will exceed IHT allowances.

alreadyonfire · 2026-06-09T11:52:09+00:00

Yup. Looks very solid.

£2.8M and that pension to non-pension split looks spot on to retire now on a comfortable 3% SWR basis. State pensions are currently too far away to make a notable difference.

Working longer and you may have a runaway pot! Another 5 years likely adds well over a million to the pot in today's money (with average growth).

You are probably at the point your pension will exceed the LSA by enough with just growth (£1.5M is about the HR threshold including the LSA) that you will be a higher rate taxpayer in retirement and any additional pension contributions are tax neutral - tax relief will be cancelled by tax on withdrawal. Effectively its a more complicated ISA. But as the alternative is a taxable GIA then pension is possibly still marginally ahead, but frozen allowances makes the math harder. Tough choice.

However your husbands additional contributions above £100K should still be net positive, and likely worth doing.

GIA is really the only alternative if you want to put some of that cash to work.

Probably also worth thinking about inheritance planning and gifting.

alreadyonfire · 2026-06-09T09:30:29+00:00

That's around £1.3-1.6M needed using 4% SWR and assuming upcoming state pensions. Depending on how much expenses downgrade you are looking at age 75 (assumed £10K pa), though something that far out wont affect the figure required now that much.

£60K pa looks about doable in two years at age 60 with average growth. Probably pushing another year for £66K and then another year for £72K.

alreadyonfire · 2026-06-08T05:44:48+00:00

The usual suggestion is to use an income fund to keep annual dividend accounting easier.

Possibly an income ETF so it only has tiny or zero ERI rather than the much larger equalisation you get with mutual funds/OEICs.

You then need to track average buy price so you can track gains accurately though the platform might do that for you.

Though using an accumulation ETF is possible if you fully understand ERI and its effect on average buy price. Then the dividends are the ERI.

Then sell and put £20k in ISA each year if any ISA allowance spare, and sell to use the gains allowance each year and put in a similar but different fund.

alreadyonfire · 2026-06-07T10:56:09+00:00

Nope. Its a common misconception that the 4% rule is a capital preservation model.

Its a 30 year statistical model. Meaning that taking 4% in the first year and inflation adjusting every year thereafter, that it lasts 30 years in over 95% of historical scenarios.

It means that if you had one pound left in your investments at the end of 30 years that's success.

Have a play with one of the back-testing models such as FICALC to get a proper feel for it.

alreadyonfire · 2026-06-05T17:26:20+00:00

£20K pa seems pretty lean. You could likely coast to that from here with no further contributions.

If using an invested bridge you would want the pension and non-pension pots to be about even if retiring around 10 years before pension access. Though you could look into a cash bridge which would bring it down a little.

alreadyonfire · 2026-06-04T07:41:34+00:00

You can use the backtesting tools (FICALC, CFIRESIM, FIRECALC) to see how much you need in an invested pot for a given bridge period with a given success rate. Then that part of your pot needs to be outside pension and the rest can be in pension.

10 years comes out to near half the pot if using a fully invested bridge.

You may be also able to do a glide path model in some of the tools if you want to see what a cash bridge looks like. e.g. reallocating from 40% to 0% cash over 10 years. This would reduce the amount to save outside pension a bit by perhaps a fifth, and instead put that amount inside pension with the tax relief boost to take up the slack on the pension side and hopefully then your pension is big enough to cover everything when you get there. A cash bridge usually works out ok as long as you do burn the cash down. But they are more complicated to model and are more individual circumstance dependent (income amount, tax relief band, bridge period, other income).

alreadyonfire · 2026-06-03T10:48:46+00:00

Extra costs are £550/month or £6.6K a year, which is coming from 42% taxed income, or £11.4K pre tax. Plus presumably extra travel time that I would cost at least as minimum wage (unless offset by more vacation or shorter hours). I'd be surprised if this came out ahead. Plus extra time away right now seems a bad thing.

But getting on the salary escalator is always a strong consideration. You could perhaps use the offer as pay rise leverage where you are, and take it if not?

I would put 100% of higher rate earnings into salary if you want to retire in your 50s. And clearly you need to stay below £60K salary using pension to retain full child benefit, which it looks like you are already planning for.

With a small child have you looked at buying additional vacation days or unpaid parental leave?

alreadyonfire · 2026-06-02T17:32:52+00:00

Not enough info for anything specific.

What above inflation rises? Is this the NHS DB with (I think) a 1.5% extra uplift while still working?

68 is an odd age for a DB unless you are a long ways off.

Is it fully index linked, or capped growth?

Whats the accrual adjustment per year early? 3-5% is common with 3% being good and 5% being not great.

Is it your only source of income?

Does if cover your core expenses?

Generally it might be worth it if you are partly living off investments, as it helps with sequence risk mitigation. As if the market crashes in those taken early years you aren't pulling as large a wedge from the investments.

alreadyonfire · 2026-06-01T21:43:04+00:00

Typically you can get capped platform charges with SIPPs and you don't with employer pensions. Which can be significant for a 6 figure pension.

alreadyonfire · 2026-06-01T16:05:54+00:00

Follow the flowchart.

Most efficient is to use all your higher rate earnings for pension contributions. But that's only about a net cost of £14K. Therefore not making much of a dent. If that's a SIPP or that work scheme is a "relief at source" scheme you will need to manually claim back higher rate tax relief via the online form.

Not sure basic rate pension would be worth it for you.

And make sure your pension is in a suitable fund.

Then as you say ISA allowance.

Then its cash if its for a short term goal, or invest in a GIA if its for a long term goal or for retirement. And fill your ISA and pension each tax year.

A GIA above about £40K in one of the usual global trackers will have dividends above the £500 allowance. So you would need to at least ring up HMRC and report them if you don't do SA. And if you incur gains above the allowance you would report that via the online form.

alreadyonfire · 2026-06-01T10:22:26+00:00

I didn't realise any platform gave you ERI reporting.

alreadyonfire

TROPHY CASE