8th May 2013
The name on everyone’s lips is that of Sir Alex Ferguson who has announced his retirement at the age of 71 as Sky.com reports. Ferguson’s achievements as a club football manager may be exceptional with 13 premierships, two champions league titles and five FA cups.
But in one way, Ferguson is not exceptional but typical of a certain cohort of retirees in that they are not really retirees at all.
Ferguson has not just worked long past retirement age – building up a better state pension in the process – but he is also to take up a director’s and ambassadorial role at Manchester United. That is typical for lots of people who have held director and senior management roles in the UK. They are working well past retirement. They either set up as consultants – Ferguson could well be in demand if he did so – or they can take a consulting role as wise grey owls with businesses they ran or even founded. Actually for Ferguson’s successor that could be a double edged trident, but by and large, businesses benefit from such experience.
Of course not many people know Sir Alex’s pension arrangements. It is probably not wild speculation to suggest that if he has a DC pension then it is fully funded to the limits of tax relief and that he has other arrangements. He does appear on the lower limits of the Sunday Times rich list, somewhere no-one would have imagined a football manager would ever have featured, certainly mot back when Ferguson was starting out. In this the manager is very much a creature of the age he lived in.
But with rising life expectancy and rising levels of activities from older people, we can see that retirement is changing and Ferguson is an example of this too. He probably won’t need to annuitise, despite pension firm Hargreaves Lansdown’s hotshot PR operation saying he could obtain a better rate because of his heart condition and age.
Instead phased retirees such as the United manager are usually in income drawdown i.e. they leave a lot of their money still invested. The level at which it is deemed appropriate is usually a pension pot of at least £100,000 and proper financial advice is always advisable.
But there is another angle to the story which doesn’t really affect Sir Alex. He has worked so long because he loves the job. He is to continue in the role because he loves the club. But some people may have to keep working because they can’t afford to retire and employers, even if they want people to retire can no longer enforce it just on the basis of age, unless they go through the rather stressful process – for all parties concerned – of demonstrating older workers aren’t up to the job. (It’s about a decade since people started suggested that about Sir Alex. Mostly fans of other clubs of course).
And while Sir Alex can afford the best advice, what about part-time older workers, with small pots, who only need a little income. We’re not sure how those people get advice or even if annuitising early is always the best advice if they have other sources of income.
Retirement is changing as Sir Alex demonstrates. He deserves his acclaim. But a lot of older people won’t be as comfortable when they come to make those difficult decisions about retirement.