Your career as a professional footballer is unique in many ways. Not only can you earn a living from playing the sport you love, but you face a different set of challenges and obstacles as an athlete when compared to other occupations.
Perhaps most notably is the fact that you’ll likely have two retirements: one coming after you hang up your boots, and the other when you retire from whatever second career you pursue when you finish your playing days.
Both are important times in life, but that first retirement is potentially more uncertain than the second. You might be moving into a second career that pays a bit less than you’re used to, and so you may have considerations over your lifestyle and other similar factors.
As a result, it’s a sensible move to consider this first retirement carefully. Even if you’re right at the start of your playing career and have a decade or more before this will be a consideration for you, it’s still important to plan ahead and consider these aspects.
So, read on to discover three key financial steps that you may want to take when you retire from playing professionally.
1. Assess your transition to a new career
For the majority of players, retiring from playing isn’t just an end, but also the start of a new career.
You might move into a role that’s related to football, such as coaching or in sports media. Or, you could decide to do something entirely different. Either way, it’s crucial to consider the transition from playing professional football into whatever second career you explore.
There are key financial considerations to make at this stage. This might be related to how your lifestyle might change, which you can read more about in the next section.
Or, it might be around what you’ll need for your next career. If you want to move into a new industry entirely, are there qualifications you’ll need to be able to do this, for instance?
Additionally, you may want to look into what your employment status will be. For example, the Guardian reported in March on how former England striker Gary Lineker had won a court battle with HMRC over whether he was an employee of BT Sport and the BBC, or a freelancer.
Lineker could have been on the hook for a £4.9 million tax bill had he lost. So, it’s clearly important to plan carefully and make sure you’re correctly classed, depending on the kind of work you move into.
It’s often worth thinking about these aspects ahead of time. Otherwise, they might suddenly pile up on you when you reach this pivotal moment.
2. Carefully calculate how much your lifestyle will cost
Most people live a lifestyle that’s in line with their earnings and the trajectory of their careers. However, the difference for you is that, while many players do go on to exceed their earnings in their second careers, it’s possible that you’ll have already reached your maximum earnings potential when you were plying your trade on the pitch.
It’s widely known that professional football is a well-paid occupation. But, it’s likely that your move into your second career will be lower paid, at least initially. As a result, it’s important to consider this possibility and prepare accordingly.
One way you can do this is to calculate how much your lifestyle costs. Include everything from your daily costs of living to luxuries such as holidays, cars, and everything else you pay for.
Also include any money you’re paying back, such as a mortgage on your home or on properties as part of a buy-to-let (BTL) portfolio.
From here, you can then see how far your second career earnings can go in affording your lifestyle, or whether you need to reassess and make changes.
3. Work out how you’re going to fund your lifestyle
As well as calculating what your lifestyle will cost, it’s important to think about how you’re going to fund it.
During your playing career, you ideally would have saved and invested some of your earnings so that you’d be able to support yourself in future.
But just as important as having done this is using these resources effectively to fund your lifestyle.
This might involve carefully withdrawing cash from various sources to avoid paying more Income Tax than necessary.
Alternatively, it could involve the way you liquidate your investments, paying as little Capital Gains Tax (CGT) as possible when doing so.
Similarly, if you built up a property portfolio during your playing career, you may want to think about realigning its focus so that it’s more suitable for your current needs.
For example, it’s likely that you invested for capital growth when you were younger, targeting increasing property values rather than income. You may have done this because you wanted to increase your wealth, but didn’t need the income at the time.
Yet now, with your wages having fallen, you may want to reposition this portfolio to allow you to draw an income instead.
These are just a handful of elements that you may want to think about, and not all of them may apply to you.
As a result, you may want to seek professional, personalised advice that’s specific to you and your circumstances.
Get in touch
Need help transitioning from your playing career to the next stage? Please do speak to us at ProSport.
Email firstname.lastname@example.org or call 01204 602909 to find out more.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
The Financial Conduct Authority does not regulate tax planning.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.
Think carefully before securing other debts against your home.