Tilson's success saw him linked with jobs at West Bromwich Albion and Norwich City, but he remained with Southend. In November 2006, Southend achieved a notable victory over eventual Premier League champions Manchester United in the League Cup, but were relegated from the Championship at the end of the 2006–07 season. On 3 January 2009, Tilson led Southend to a 1–1 FA Cup third round draw away at Chelsea, with Peter Clarke scoring a very late birthday equaliser. On 28 October 2009, following the club being threatened with administration and on-loan midfielder Lee Sawyer returning to Chelsea, Tilson came out of retirement to play for Southend in the Essex Senior Cup. On 4 July 2010, Steve Tilson was placed on gardening leave by Southend United, bringing an end to his seven-year reign as manager. In October 2010, Tilson was appointed the new manager of Lincoln City, replacing Chris Sutton. In his first game Lincoln drew 0–0 but Tilson brought in four promising loan signings, and went on to get a good away result against Wycombe, with many signs of improvement. However, on 7 May 2011, Lincoln were defeated 0–3 by Aldershot, and relegated from the Football League. Following this, he released and transfer listed nearly the whole squad, leaving just 3 players. Tilson was sacked as manager of Lincoln City on 10 October 2011 following a heavy defeat away at Tamworth. Steve Tilson now runs a football academy along with former Southend United player Danny Greaves. On 12 July 2012 Tilson was appointed manager of Canvey Island. However, after a season in charge Tilson was sacked along with assistant manager Craig Davidson. Tilson was promoted to the position of manager of women's side C & K Basildon in July 2015, having previously been head coach there. At the time of his appointment the club were in the Southern Division of the FA Women's Premier League.