Contributed by Office For National Statistics
10/10/2020 - NFU Mutual
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
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.”
NFU Mutual has produced a special edition of its Ahead of the Field podcast on Succession Planning, available here.
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