Sir Alex Ferguson could improve your retirement

Alex Ferguson

Sir Alex Ferguson has been a big figure on the British football scene for almost 40 years, so his decision to retire at the end of the season is seen as the end of an era. But while talk immediately turned to his replacement, for Ferguson, life will be about his options in retirement.

And his position highlights three vital retirement lessons that could make all of us richer.
Ferguson took the helm at Manchester United in 1986, and his time there has made him Britain's most successful football manager. There are those who love him and those who hate him - presumably it depends on the team you support - however, we could all benefit from learning three vital lessons from his retirement choices.

1. There's no such thing as a retirement age

There has been a great deal of disquiet about the raising of the state pension age to 67 - but Ferguson's retirement comes at the age of 71. It shows that we need to start thinking more flexibly about the notion of a retirement age.

For some people, our financial situation will dictate a later retirement age than we might ideally like, for others a love of our work may encourage us to stay on. In fact Ferguson originally retired in 2001, but changed his mind after deciding that it was simply to early for him to leave the game.

Whatever the reason, the earlier we adjust to the idea of flexibility around retirement, the better we will be able to handle the decision whether to retire or not when we hit the age of 60 or 65 - and the better we will be able to take the news that we cannot afford to retire when we thought we would.

2. Retirement is not the end of work

This is not the end of Ferguson's stint at the club. A club statement read: "The most successful manager in English football history will bow out after the West Bromwich Albion game on 19 May and join the football club board." Ferguson said: "Going forward, I am delighted to take on the roles of both director and ambassador for the club. With these activities, along with my many other interests, I am looking forward to the future."

Working in retirement is increasingly common. For many people working within the same organisation in a less demanding role makes a great deal of sense - as they have built up knowledge and expertise they can use in their new role. It makes sense for us all to consider the opportunities to work in our own retirement, so we can lay the groundwork well in advance.

3. You need to consider your pension options

Ferguson's own pension arrangements are no-one's business but his own. However, according to Hargreaves Lansdown, someone of a similar age, with a similar history of heart conditions, could get an annuity of 7.75%, as long as they shopped around and targeted the enhanced annuities available to those with certain medical conditions.

This sort of rate is unheard of for most people - a typical annuity at the age of 60 would be little more than 5% - and at 65 would still be under 6%. It goes to show how important it is to shop around for the best possible annuity when we retire - taking both our age and health into consideration.

Of course, it goes without saying that Ferguson is likely to have a more comfortable life in retirement than the vast majority of people in the UK. However, there's the chance that if we learn the three lessons of his retirement, we could improve our own situation significantly.

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Sir Alex Ferguson could improve your retirement
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship. Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so. To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension. In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.

The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.

Around 427,000 households in the over-70 age groups are either three months behind with a debt repayment or subject to some form of debt action such as insolvency, according to the Consumer Credit Counselling Service (CCCS).

Its figures also show that those aged 60 or older who came to the CCCS for help last year owed an average of £22,330. Whether you are retired or not, the best way to tackle debt problems is head on.

Free counselling services from the likes of CCCS and Citizens Advice can help with budgeting and dealing with creditors.

Importantly, they can also conduct a welfare benefits check to make sure you are receiving the pension credit, housing and council tax benefits, attendance and disability living allowances you are entitled to.


The average UK pensioner household faces a £111,400 tax bill in retirement as increasing longevity means pensioners are living on average up to 19 years past the age of 65, according to figures from MetLife. And every year in retirement adds an extra £5,864 in direct and indirect taxes based on current tax rates to the costs for the average pensioner household. You can be forced to go bankrupt if you fail to pay your taxes, so it is vital to factor these costs into your retirement planning.It is also important to check that you are receiving all the benefits and tax breaks you are entitled to if you want to make the most of your retirement cash.

The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.
Older Britons are often targeted by unscrupulous criminals - especially if they have a bit of money put away. For example, many over 50s were victims of the so-called courier scam that tricked into keying their pin numbers into their phones and handing their cards to "couriers" who visited their homes. It parted consumers from £1.5 million in under two years. Detective Chief Inspector Paul Barnard, head of the bank sponsored dedicated cheque and plastic crime unit (DCPCU), said: "Many of us feel confident that we can spot fraudsters, but this type of crime can be sophisticated and could happen to anyone." The same is true of boiler room scams that target wealthier Britons with money to invest, offering "once-in-a-lifetime" opportunities to snap up shares at bargain prices. Tactics to watch out for include cold calling, putting you under pressure to pay up or lose the opportunity for good, and claiming to have insider information that they are prepared to share with you.

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