Proportion of farmers saving for later life will increase

The proportion of farmers and farm staff saving for later life has elevated, in accordance with new figures from the Workplace of Nationwide Statistics.

Staff with office pensions in agriculture has rocketed from 16.6% in 2012 to 64.3% in 2021, the ONS has revealed.

Throughout the UK the proportion of staff with office pensions has risen from 47% to 79% in the identical time.

This improve follows the introduction of automated enrolment in 2012, which made it a authorized requirement for all employers, together with farmers, to supply a pension to eligible staff.

Separate NFU Mutual figures present the variety of all farmers saving into pensions has additionally elevated in recent times, rising from 66% in 2019 to 74% in 2021.

This means a rising proportion of farmers and farm staff are saving for later life, whether or not by means of a office pension or a personal pension.

Sean McCann, chartered monetary planner at NFU Mutual mentioned: “Farming is a lifestyle, and lots of farmers select to by no means absolutely retire within the conventional sense.

“However having an impartial supply of earnings in later life provides you the choice to take much less from the enterprise, making it simpler handy over the reins to the following era.”

Defra’s new lump sum exit scheme could spark some farmers to consider their retirement plans, significantly the choices obtainable for taking cash from their pension.

Mr McCann added: “It’s excellent news that extra farmers and farm staff are investing into pensions as a result of there are some important tax advantages.

“For workers, pensions can present selection in later years. Many section their retirement over time, lowering the hours they spend at work utilizing their pension to complement their earnings.”

At present pensions may be accessed from age 55, rising to 57 from 2028.

For each £80 put right into a pension, the federal government provides an additional £20, and better charge taxpayers can declare as much as one other £20 from HMRC.

Any progress inside the fund is basically tax free. As much as 25% of the worth of the fund may be taken as a tax free lump sum from age 55.