Less than a fifth of farmers plan to fully retire, new university study finds

Less than a fifth of farmers plan on fully retiring and many do not discuss their later life plans with loved ones, according to a new study from the University of Exeter in collaboration with NFU Mutual.

Nearly 700 farms across England, Scotland and Northern Ireland took part in the extensive university research, and the findings highlighted the unique approach farmers take to retirement.

Handing down the farm can often be an extremely emotional time for those farmers who have worked hard on the land or with livestock their whole lives, with many clinging on to ownership and “the way of life” long after traditional retirement age.

Children often find it hard to approach the subject of taking over, and many are not given the keys until they themselves are middle aged or older.

Professor Matt Lobley, from the University of Exeter, led the research. He has 30 years of experience researching farm transfers.

“Farming is a way of life, and it’s an identity,” he said. “Facing up to the reality of stepping back and being no longer in charge tends to put people off.

“It’s all a bit daunting; thinking about handing over management of the business – it reminds people they’re getting old.

“There is much greater awareness of succession as an issue facing UK agriculture than there was 10 to 15 years ago, but there is still a very pronounced need to move beyond the awareness stage to actually encourage planning. That struck me as something the industry desperately needs to address.”

Other key findings from the research

• Almost half (48%) of those planning to retire or semi retire will only do so after the age of 70 (average planned retirement age was 68.6)
• 18% of farmers hadn’t made financial plans for life after work
• 43% are planning to use income from the farm to at least partly support themselves financially once they stop working full time
• 44% of those with farms less than 20 hectares in size expect to never retire, compared to 11.1% of those with farms over 200 hectares
• Likelihood of discussing plans with children also increased with farm size
• 28% of respondents have not yet identified a potential successor

Planning for later life

Whether they plan to fully retire or not, the survey found that 43% of farmers are planning to use income from their farm in later life.

NFU Mutual commissioned the study, and their financial advisers are experts at helping farmers plan their financial futures.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: “Handing on the farm doesn’t have to mean giving away the ownership of all the assets on day one. It can be helpful to think about the management of the business and ownership of the farm as separate issues.

“The farmer could look to hand over more of the day to day management of the business while retaining the ownership of the assets to a later date.

“One option favoured by a lot of farming families is to set up a partnership – which can give the younger generation a stake in the business.”

• 82% of all respondents said that they had already made plans for financing their retirement
• Horticulture/other farmers were more likely (96.4%) to have plans for retirement income than both dairy (72.4%) and cattle/sheep (77.5%) farmers
• Very small farms were more likely to draw an income from the sale of property, but less likely to draw in income from their current farm

NFU Mutual has produced a special edition of its Ahead of the Field podcast on Succession Planning, available here.