Farmers more likely to seek financial advice and invest in the future, survey shows
1st June 2023
Latest research from NFU Mutual has shown farmers and other agricultural workers are more likely to be proactive in the face of current economic challenges such as high inflation by seeking financial advice and exploring investment opportunities.
Nearly half of farmers (43%) surveyed by the rural insurer are planning to seek advice in the next six months and one in five (19%) in the next few weeks. In contrast, only three in ten non-farmers plan to seek advice in the next six months and just 8% in the coming weeks.
NFU Mutual’s bi-annual investor sentiment survey also found that many respondents interested in advice were between 55 and 74, which suggests they are seeking advice on accessing pensions and inheritance tax planning.
In addition, more farmers than non-farmers gave changes in interest rates, household finances, and global events as the reason behind the recent change in their financial attitudes. Farmers affected by changes to the Basic Payment Scheme (BPS) are also likely to seek financial advice to offset losses in revenue.
Sean McCann, chartered financial planner at NFU Mutual, said: “Although inflation and rising interest rates are affecting everyone, this research suggests farmers are more likely to respond by seeking financial advice.
“Rising interest rates can impact borrowing costs and trigger tax bills on savings. Inflation can erode the real value of cash and encourage investors to look at the wider options available.”
He added many farmers over 55 are looking into how to best extract money from their pension funds.
“Although farmers often don’t retire in the traditional sense, many invest in pensions to provide an independent source of income to make it easier to hand over more of the day-to-day management of the farm to the younger generation,” he pointed out.
“Some may want to access their pension to help children onto the housing ladder, fund a diversification project or support their farm income following reductions in BPS payments.”
According to the insurer, the latest survey indicates a rise in confidence among respondents when it comes to saving and investing since autumn 2022, suggesting rising interest rates were encouraging investing while the significant concerns following September’s mini-Budget is beginning to die down.
In addition, the percentage of respondents who made additional payments into a pension in the previous three months rocketed from 4% in Autumn 2022 to 20% in Spring 2023. Meanwhile, the percentage who had invested in a Stocks-and-Shares ISA increased from 5% to 16%, and those who saved in a cash account or cash ISA increased from 15% to 39%.
Whereas, those who hadn’t made any savings or investments in the previous three months dropped from 69% in Autumn 2022 to 33% in Spring 2023.
The above figures clearly indicate that more respondents are making savings and investments and planning for the future, despite ongoing cost of living concerns and pressures from inflation.
