44% of UK farmers have no formal succession plan in place for when they retire, according to research from Barclays.
They are risking the future success of their business by having no plan, the bank said. The agricultural sector as a whole contributes £85 billion to the UK economy each year and employs 3.5 million people.
A quarter of those without a plan admit that it was because they simply had not thought about it. 27% claim they do not have anybody to leave their farm to and 16% believe they do not need a plan.
Meanwhile, 38% of farmers who do have a succession plan in place do not involve their successors in the actual running of the farm or the business on a day to day level. This lack of involvement could impact negatively in both the short and long term, losing the farm valuable time and money.
24% of farmers who plan to hand over to a family member, which in the majority of cases is a son (75%), admit that the successor should be more hands on.
“Many farms have been in the same family for several generations,” said Martin Redfearn, head of agriculture at Barclays. “To ensure the transition from one generation to the next is done smoothly, careful planning is essential rather than it being left to chance.
“Planning who will take on both the business responsibility and the assets of a farm can be a sensitive subject and not necessarily something people want to address. However, without that vital plan, future years, if not decades, of hard work are being put at risk.
“Importantly, succession planning doesn’t need to be an arduous or expensive process, but it does need to be considered far earlier and in a more formal way than it currently is. We want farmers to feel confident about their own future and that of their farm. To do that, we advise them to seek the best possible specialist advice on matters such as financial planning, tax and legal issues. There is lots of support available to help farmers make the right choices.”