Set yourself up for success: 4 key financial milestones for athletes

Set yourself up for success: 4 key financial milestones for athletes

As an athlete, you will know how important it is to look ahead and identify key dates in your sporting calendar.

Perhaps you have a major competition coming up this summer – the Olympics, Paralympics and Euros are scheduled for summer 2024. To maximise your chances of success, you and your team will have determined the optimal start date for training and preparation and created an action plan.

Likewise, throughout the year and across your career, there are several key financial milestones.

By approaching these important financial dates with the same mindset as you would a sporting event, you can position yourself well financially both now and in the future.

With a very rigid season, footballers in particular can benefit from this kind of approach. Read on to learn when these key milestones are, and how you can plan around them.

1. The sporting calendar

Benjamin Franklin once wrote: “In this world nothing can be said to be certain, except death and taxes.” For athletes, and particularly footballers, this list has one addition: the sporting calendar.

The certainty of the sporting calendar can be a big positive – it means you know exactly when your “peaks” are, giving you the perfect opportunity to both plan for the next cycle and reflect on the previous one.

For footballers, there are obviously the major milestones of the start and the end of the season. Additionally, you might reach a peak once or even twice a week ahead of a gameday throughout the season, preparing for every match.

Meanwhile, athletes might peak once every two years ahead of the World Championships and Olympics, planning everything around such events.

At the start of one of these cycles – whether it be the week, year, or four years between these peaks – it may be wise to look ahead and think about what you want to achieve financially and write a list of goals.

You can think of these like your sporting goals. For example, you will know that setting targets before a big game, at the outset of the season, or ahead of an athletic tournament can increase your chances of success on the field. Likewise, setting financial targets can boost your chances of long-term stability off the pitch.

If you feel your finances are not quite where you want them to be, enlisting the help of a financial planner could help you make the most of your income.

They will be able to discuss protection options to safeguard your income if you get injured or perhaps consider saving and investing more of your earnings.

As with your sporting goals, at the end of the cycle, it is then key to look back and assess which targets you hit, which you did not, and how you can improve next time.

2. Contract end dates

Knowing your club contract end date is approaching can be worrying. That said, you can look at times like these as opportunities.

A contract ending gives you and your agent the chance to secure an even better deal either with your current club or elsewhere.

To achieve this, it is important to think about what you want from your next contract. Together with your agent, consider aspects such as the:

  • Salary
  • Bonuses
  • Length of the contract
  • Add-ons like help with relocation or childcare costs.

Before starting negotiations, it can be helpful to coordinate with a financial planner. They will examine your current financial situation and advise you on what level of compensation would be ideal, given your life goals.

With clear aims for your contract negotiations – whether with your current club or a new one – you can inform your agent of what you would like to achieve. Then, you can work together to approach discussions from a much stronger position, giving yourself the best chance of financial success in the long run.

3. The end of the tax year

In the UK, the tax year ends on 5 April. This is an important financial date for several reasons.

Firstly, if you own a company that handles brand partnerships and other sources of income, you will need to file your tax return.

Sponsorship deals and commercial partnerships are an integral part of the modern sporting career. From Michael Jordan and Nike to Declan Rice and Müller, athletes of all disciplines supplement their income through these deals.

You do not need to complete your tax return until the end of January the next year, but submitting it early gives you more time to pay your bill, and a clearer picture of your finances.

You can fill out your tax return yourself, but it can be sensible to seek help from an accountant. They will get your paperwork done on time and help you avoid overpaying any tax by taking advantage of all available deductions.

Secondly, at the end of the tax year, several important allowances and exemptions reset. So, before the tax year ends, it is important to make the most of your:

  • ISA allowance
  • Capital Gains Tax Annual Exempt Amount
  • Dividend Allowance.

Thinking a few months ahead gives you time to take full advantage of these exemptions and allowances by topping up your ISA or liquidating some assets, for example.

4. The start and end of your career

Sporting careers are short – a study available from Science Direct found the average football career lasts just 8 to 11 years. Meanwhile, this could be even shorter, with FloTrack reporting that the prime for US mid-distance track athletes is just four years. So, it is important to make the most of every pay check you receive.

A financial planner can help with this. They can establish a financial plan early in your career to ensure you are set up for life after sport.

This plan can then adapt and evolve with you as your career progresses, changing as your life does.

Eventually, as you approach retirement from playing professionally, you can take stock. Many athletes go on to have a second career after sport, so deciding on a new line of work before you stop competing can help with the transition.

You could lay the groundwork now by identifying what you might do next, and what you would need to do to hit the ground running when you do stop competing. For example, there may be qualifications you need for your second career or a certain amount of money required to start a new business venture.

Then, when that final sporting milestone comes around, you will be ready for a financially successful next phase of your life.

Get in touch

At ProSport, our team of specialist financial planners can help you prepare for these key financial milestones in your career.

Email or call 01204 602909 to find out how.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

The value of your investments (and any income from them) 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.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.