Barbara Dickson says that shrewd management has been the key to her successful career, writes Natalie Graham.

Barbara Dickson, the singer and actress, sees herself more as a working entertainer than a shrewd investor. She has always been good with money, but is not an entrepreneurial type and would never gamble or buy shares.

"I am not destined to have a huge amount of money because I never take risks. But I look after the money I earn. I have never lived the life of a pop star, even when I was one," she says.

Barbara, 51, is on tour for seven months with A Slice of Saturday Night, a musical set in the 1960s produced by the Kings Head Theatre Company in Islington and Big Little Productions. She also plans to make an album with Elaine Paige. The male half of Abba, Benny Andersson and Bjorn Ulvaeus, are already writing songs for the two singers.

When Barbara became a professional singer at 21 she earned between £8 and £15 a night for performing at folk clubs. She knows she was exploited by the organisers, who would sometimes pay her a small percentage of the takings. She says: "I could never have negotiated a huge fee because I was not brought up like that. I did not know how to put a price on what I was worth. A manager who deals with money is a fantastic idea."

Barbara's career took off after she met her manager, Bernard Theobald, in 1972. He asked her why she was singing in a Wolverhampton folk club when she could be singing in the Albert Hall. "I thought it was just flannel," she says. Bernard had such faith in her that he offered to use his savings of £150 to come to Scotland and help put her diary together. If she was not better off three months later, he would go away.

Bernard went to Scotland and started answering the telephone. When clubs rang up offering Barbara work, he said she did not work for her usual fees any more. Instead of a top rate of £15, Barbara was taking home £25 a night. As her fees went up, Bernard was able to take a cut and earn his living. He made a demo tape of Barbara's songs, which he took around record companies, but without success. Then in 1974 playwright Willy Russell offered her the singing and commentary role in his musical John, Paul, George, Ringo and Bert. After an extended run in Liverpool the show transferred to the West End for a sell-out run.

Throughout that time Barbara reckons she earned twice as much as the other actors, thanks to Bernard's negotiating skills. She enjoyed such recognition in the show that second time round the demo tape brought her a record contract with Robert Stigwood's label, RSO Records. Barbara's first hit single, Answer Me, in 1976 was followed by many more - Another Suitcase, Another Hall (from Evita), The Caravan Song and January, February. Then there were top-selling albums You Know It's Me (1981) and All For A Song (1982).

In the late 1970s Barbara was able to take out a mortgage. She paid £11,500 for a small run-down house in Clapham, south London. "I had to gut the place and the building work took two years. I had the cash to do it up, but I always thought my income would disappear," she says.

In 1983 Barbara played Mrs Johnston in the musical Blood Brothers, which was an instant success when it opened at the Liverpool Playhouse. Barbara stayed in the show for a year. In 1984 she released two albums, Heartbeats and The Barbara Dickson Songbook.

Barbara's income soared with her popularity. In some years she earned more than £500,000. On one occasion she turned down a £70,000 fee to appear for a weekend in Sun City in South Africa because she was against apartheid.

Unlike most performers, Barbara has co-owned all her recording rights since 1983 so as well as receiving royalties on the songs, she also has an asset to sell. As Barbara and Bernard together own the copyright to her songs, her record company was given an album for a limited time on licence, so Bernard was able to negotiate more substantial royalties.

Barbara says: "The best person to be in the music industry is a songwriter, who receives a royalty of just over 6% and has no expenses. Before singers can earn anything they have to recoup from earnings the cost of making a record, which in the early 1980s was around £50,000 - and can easily be £100,000 today. The artist usually tries to negotiate a big advance from the record company to live on while waiting for a hit."

Barbara was born in Dunfermline and brought up with her younger brother Alastair - now a sculptor living in Canada - in a working-class family. Her mother came from Liverpool and her father worked for the Admiralty in the Rosyth dockyard. Both parents encouraged her musical talents from an early age.

For Barbara, live performances generate the spare cash to pay for new curtains or chimney repairs. She says: "Singers have to work very hard because there are few royalties. You make money from the spin-offs of a hit record and from going out on tour, which is real sweat of the brow stuff. Today touring has become less lucrative, as the costs have increased dramatically. To earn real money you constantly have to make albums that sell in telephone-number figures all over the world. That is euphoria for a singer. I have never been in that happy position."

Home for Barbara is a large Victorian house set in 11 acres in a village an hour from Lincoln. She has been married for 15 years to television director Oliver Cookson. Their sons are Colm, 12, Gabriel, 10, and Archie, 8.

Much of Barbara's taxed income goes towards three sets of school fees at a local boarding school. She says: "It is an absolute nightmare and I would advise anyone to start planning for private education as soon as possible. When we got a quote in the 1980s for a lump sum to cover the fees it was like another mortgage. There is no end in sight, at least for another 10 years."

Barbara was able to take a pension at 50, but she enjoys singing and acting too much to give up work. The pension fund, which was her chief way of saving and the result of meticulous planning, goes some way towards covering the school fees. In 1987 Barbara and Bernard's joint company, Theobald Dickson Productions, formed a self-administered pension fund and bought a freehold property in the West End of London. The building was a shell which they fitted out as offices with the aid of a £200,000 loan.

Thanks to the rental income from six floors of offices, they managed to pay back the debt within four years, when the property was worth twice what they had paid for it. Barbara says: "The new building was just bare walls. We had to put in all the services and utilities and even create the frontage, but it all came together very well. The building still provides a healthy rental income."

Barbara knows that the key to survival in the entertainment world is diversification. In l994 she made her television acting debut as a wealthy ex-pop star in the popular Scottish detective series Taggart. The same year Granada TV asked her to star in Band of Gold, a new drama series about prostitutes, playing the role of Anita Braithwaite. The series was a big hit and was shown all over the world.

Barbara is not a saver. She spends her money as it comes in and likes to buy Victorian paintings or antique furniture at auction.

Her most extravagant gesture was to take 13 people to Dublin, her favourite city, for her 50th birthday. "The cost ran into thousands, but we had a fantastic time, from Saturday to Sunday afternoon," she says.                                                  

"Sunday Times", May 1999. Interview by Natalie Graham.