The proportion of farmers and farm workers saving for later life has increased, according to new figures from the Office of National Statistics.
Employees with workplace pensions in agriculture has rocketed from 16.6% in 2012 to 64.3% in 2021, the ONS has revealed.
Across the UK the proportion of employees with workplace pensions has risen from 47% to 79% in the same time.
This increase follows the introduction of automatic enrolment in 2012, which made it a legal requirement for all employers, including farmers, to offer a pension to eligible employees.
Separate NFU Mutual figures show the number of all farmers saving into pensions has also increased in recent years, rising from 66% in 2019 to 74% in 2021.
This suggests a growing proportion of farmers and farm workers are saving for later life, whether through a workplace pension or a private pension.
Sean McCann, chartered financial planner at NFU Mutual said: “Farming is a way of life, and many farmers choose to never fully retire in the traditional sense.
“But having an independent source of income in later life gives you the option to take less from the business, making it easier to hand over the reins to the next generation."
Defra’s new lump sum exit scheme may spark some farmers to think about their retirement plans, particularly the options available for taking money from their pension.
Mr McCann added: “It’s good news that more farmers and farm workers are investing into pensions because there are some significant tax benefits.
“For employees, pensions can provide choice in later years. Many phase their retirement over time, reducing the hours they spend at work using their pension to supplement their income."
Currently pensions can be accessed from age 55, increasing to 57 from 2028.
For every £80 put into a pension, the government adds an extra £20, and higher rate taxpayers can claim up to another £20 from HMRC.
Any growth within the fund is largely tax free. Up to 25% of the value of the fund can be taken as a tax free lump sum from age 55.
