LESS than a quarter of Scottish farmers plan to take income from their farm in later life despite 85% of them continuing to work, research commissioned by rural insurer NFU Mutual has found.

The vast majority of farmers continue to be involved on the farm past retirement age, whether that’s taking on less intense jobs, helping out at busy times, or looking after the paperwork.

Despite this, just 23% of Scottish farmers plan to continue taking income from the farm. Instead, many older farmers receive income from pensions, with nearly three-quarters (69%) of farmers in Scotland planning to use a private pension for income in later life.

Scottish farmers are waiting to see if they will be offered a similar lump sum scheme to exit the industry to the one Defra announced in England.

And a survey of 688 farms across England, Scotland and Northern Ireland carried out by the University of Exeter for NFU Mutual has found that private pensions are the main source of income in retirement age.

A quarter of Scottish farmers (25%) plan to use income from letting property in later life and 41% plan to use other income from other investments. Farmers were able to tick more than one source of retirement income when answering the survey.

Chartered financial planner at NFU Mutual, Sean McCann, said: “Pensions provide an independent source of income for the older generation, giving them the freedom to take less from the farm.

“This can be particularly important when two and sometimes three generations are relying on the farm for their livelihood.

“Because of the range of options when it comes to taking money from pensions, it’s important to take advice to ensure you don’t pay more tax than you need to.”

When they reach retirement age, half of Scottish farmers – 51% – plan to do the same work they currently do but less intensely, while 41% plan to help out at busy times. Around a quarter (23%) plan to help out with fencing and other odd jobs, but only 15% expect to do nothing.

Pensions are a key source of income for farming families, and they are also the most likely to spark the need for a financial adviser. 85% of NFU Mutual customers questioned in a separate survey said they would seek professional help for pensions.

This compared to 78% who would turn to an adviser for their investments, 46% who would seek help with an ISA, and 39% who required assistance with life insurance and other protection products.