How the Budget Affects Your FIRE Number
The Chancellor moves three levers on 28 October. Here is the maths, and a calculator to run it on your numbers.
The Budget changes the numbers. Has it changed yours?
Your FIRE number is not a single fact. It is the answer to a chain of assumptions about tax rates, ISA allowances, and what counts for inheritance. On 28 October the Chancellor can pull on all three. The point of this piece is to make the impact specific, personal, and impossible to ignore before it happens.
You read the FIRE posts. You probably typed your age, your salary and a number from your pension statement into a calculator. You got a date back. You felt a small lift.
Then you realised the date was built on a stack of policy assumptions, and the Chancellor gets to walk past the stack on 28 October.
This piece is the second look. Three Budget levers, what each one does to your number, and an interactive scenario you can run on your own position. If the date moves by three months, you have learned something useful. If it moves by three years, you have found the decision that deserves your attention now.
What your FIRE number is actually built on
The 25x rule is a useful shorthand. Take your annual spending, multiply by 25, that is the pot you need to withdraw 4% a year indefinitely. The rule works on a small number of assumptions about return, inflation, and longevity. The Budget quietly changes three of them.
Capital gains tax
Higher rate CGT is 24% in 2026/27. Every gain you crystallise on drawdown shrinks your pot. The expected move is up, to 32%.
ISA allowance
The annual ISA allowance is £20,000. A merged Cash and S&S ISA, with a lower cap, has been on the table for two years. £12,000 has been mentioned in leaks.
Inheritance tax
The £1m combined cap on business and agricultural relief is already in force from April 2026. A further cut to £500,000 is a plausible next step. It changes what your estate is worth at 67, not at 58.
None of these is a reason to abandon the goal. All three are reasons to make the assumptions visible in your own scenario before 28 October, not after.
A real person's number, before and after
Meet Naomi. She is 42. She earns £78,000. She and her partner have two children under ten, a £320,000 house with £180,000 left on the mortgage, and a workplace pension they last opened in 2021. The S&S ISA has £42,000 in it. The cash ISA has £18,000. There is a small SIPP with £24,000. The total invested pot is £280,000.
She plans to retire at 58 on £38,000 a year in today's money. The state pension at 67 is £11,500 a year, so she needs £26,500 a year from her own pot for the bridge years, dropping to £15,000 after 67.
Under today's rules, with a 5% real return and £1,200 a month invested, the maths looks roughly like this:
| What she is modelling | Today's rules | If the leaks land |
|---|---|---|
| CGT higher rate on drawdown | 24% | 32% |
| CGT annual exempt amount | £3,000 | £2,000 |
| ISA allowance (per year) | £20,000 | £12,000 |
| BPR/APR combined cap | £1,000,000 | £500,000 |
| FIRE number (25x spending) | £662,500 | £662,500 |
| CGT drag at drawdown | ~£48,000 | ~£65,000 |
| ISA headroom to age 58 | £320,000 | £192,000 |
The headline number does not move. The money she actually gets to keep moves by £17,000 on drawdown. The ISA headroom she can shelter before retirement moves by £128,000. Those are real numbers attached to a real person.
If Naomi is reading this and recognising herself, the next question is whether the move is meaningful at her age and her pot. The calculator below is the honest way to find out.
The post-Budget scenario in the calculator uses CGT 24%/32%, a £2,000 annual exempt amount, a £12,000 ISA allowance and a £500,000 BPR/APR cap. None of these is a forecast. Each is a plausible direction based on the OBR's July 2026 risk register, the Treasury's pre-Budget representations, and last year's fiscal drag. The Budget on 28 October will land somewhere in this envelope. The exercise is to find out how much that somewhere matters.
Run it on your numbers
Adjust the levers below. The FIRE number, the CGT drag at drawdown and the IHT exposure update against two policy settings: today's rules and a plausible post-Budget 2026 baseline. The difference between the two is what the Chancellor could move on 28 October.
Your situation
Defaults are an Anxious Accumulator at 42, targeting 58 on £38k a year spending.
Advanced: state pension and longevity
CGT 18%/24%, £3,000 annual exempt amount, £20,000 ISA allowance, £1m BPR/APR combined cap. State pension ~£11,500/yr.
If you want to retire at 58on today's rules, this is what the gap is asking for on top of your current £1,200.
CGT 24%/32%, £2,000 annual exempt amount, £12,000 ISA allowance, £500k BPR/APR cap. Modelling, not a forecast.
If these changes land, this is the new gap. The Budget day number is rarely the same as the leaked number.
This is a scenario tool, not financial advice. It assumes a 60/40 split between ISA and taxable accounts, applies the higher CGT rate to realised gains on drawdown, and uses the standard £500k combined nil-rate band for IHT. Real numbers will depend on your wrappers, your spouse's position and the actual Budget outcome. Verify against HMRC guidance before acting.
Add your pensions and ISAs in Delphina. The projection starts from your actual position.
What the calculator is doing, and what it is not
The maths in the calculator is straightforward. It compounds your current pot and monthly contributions to your target retirement age at the real return you choose. It divides by 25 to get your FIRE number, then applies the two policy scenarios.
The CGT drag assumes 60% of your pot at drawdown sits in taxable accounts and is crystallised at the higher rate, less the annual exempt amount. The IHT exposure assumes your FIRE pot forms part of your estate above the £500,000 combined nil-rate band, taxed at 40%.
It is a scenario. It is not a forecast. A real Delphina calculation brings together your actual pensions and ISAs, models the bridge years properly, and updates when markets move. The calculator is the quick test. The platform is the honest version.
Three things to do before 28 October
The Budget is on a Wednesday. The market reaction is on the Thursday. By Friday the story has hardened into something everyone is repeating without quite checking. Move before that happens.
Use this year's ISA allowance in full
If the Budget cuts the allowance to £12,000 and you only used £8,000 of this year's £20,000, you have £12,000 of headroom permanently lost. A S&S ISA is also free of CGT on drawdown, so anything crystallised later will not face the rates above. If the leaks are right, the next five years of ISA shelter are the most expensive you will ever see.
Harvest gains in this tax year if you hold taxable assets
The annual exempt amount is £3,000 today and likely £2,000 from April 2027. Crystallising gains up to the limit before 5 April 2027 lets you realise the uplift at the lower rate and reset the base cost for the higher-rate world. Holdings outside an ISA, second properties, large unit trusts or shares you have held for years are the obvious candidates.
Check your IHT position against the £1m cap
The April 2026 BPR/APR cap is already in force. If you own a business, a farm, or shares in an unlisted company above £1m, your estate planning needs to reflect that. A further cut to £500,000 is plausible. The action this month is to know your exposure, not to restructure it under time pressure the week of the Budget.
Your one action this week
Run the calculator above with your real numbers. Note the difference between today's rules and the plausible post-Budget baseline. Then commit to one of the three actions before the end of the month. The point of a scenario is not to predict the Budget. It is to know which decision is the right one whichever way the Chancellor goes.
Get Clear NowThis is general information about UK fiscal policy, not personal financial advice. Pre-Budget leaks do not always become policy. The Chancellor's statement on 28 October 2026 is the only source that counts. Verify the final outcome against HMRC and Treasury guidance before acting.
Common questions
Wednesday 28 October 2026. The Chancellor confirmed the date in a letter to the Treasury Select Committee on 31 July 2026. Draft legislation usually follows in the days after the statement, with most tax changes taking effect from the start of the next tax year (6 April 2027). Some measures take effect immediately or from a specific later date. The only authoritative source on Budget Day is the Chancellor's statement and the accompanying Budget documents on GOV.UK.
Of the three levers in this article, CGT has the most direct effect on the pot you actually keep at drawdown. A 24% rate today to 32% on leaked Treasury modelling is an 8 percentage point shift on every gain crystallised outside an ISA or pension. ISA allowance cuts affect how much you can shelter on the way in, with the cost compounding over the remaining years to your target retirement age. IHT changes affect the estate, not the retirement pot, so they matter for inheritance planning rather than for whether the date holds.
It depends on what you hold, where you hold it, and what the Budget announces. Assets held inside an ISA or pension are already sheltered from CGT, so crystallising gains there does nothing. For assets held in a General Investment Account (GIA), crystallising up to the annual exempt amount before 5 April 2027 lets you realise the gain at the current rate and reset the base cost for the higher-rate world expected from April 2027. Realise gains only against the AEA limit unless you have offsetting losses, and check the position with a spreadsheet before you act.
No. A cut to the Cash ISA allowance or a merged Cash/S&S ISA with a lower cap has been on the table for two Budgets and never landed. The 2026 leaks point more clearly to a reduction, and the Treasury's pre-Budget representations make a merged ISA likely, but nothing is confirmed until the Chancellor sits down on 28 October. The action this month is to use the current £20,000 allowance in full, not to assume the cut will happen and act on the assumption alone.
A calculator gives you a number from what you type in. The honest version connects to your real pensions, ISAs and accounts, models the bridge years between your target retirement age and the state pension, and updates as markets move. Delphina's free tier covers the projection itself, with UK specifics built in (state pension timing, ISA bridging, 25% tax free lump sum). Add your accounts and see the date from your actual position, not the estimate.
No. Gains inside an ISA or pension wrapper are not subject to capital gains tax, so a rate change does not directly affect the pot you crystallise from those accounts. It does affect you indirectly if you plan to draw down from a GIA, hold shares or funds outside wrappers, or expect to receive an inheritance that includes taxable assets. Most people reading this article have at least one of those in the background.
From 6 April 2026, 100% Business Property Relief and Agricultural Property Relief continue on the first £1m of combined qualifying business and agricultural property. Above £1m, the relief rate is 50%. AIM and other unlisted shares get 50% in all circumstances. The cap is already in force, so the action this month is to know your exposure, not to plan for a change. A further cut to £500,000 has been mentioned as a plausible next step in this Budget.
No. This is general information about UK fiscal policy and how the three most-leaked Budget changes interact with a standard FIRE calculation. It is not regulated financial advice and does not account for your specific circumstances, tax position or existing wrappers. For a personal projection built from your actual accounts, use a UK-specific FIRE calculator such as Delphina or speak to a regulated financial adviser.