Pension pitfalls were brought home to us by a second opinion
Published 28/10/2015 | 02:30
I'd like to think that a lot of farmers are not too bad at earning money. We work hard and are prudent. But how good are we at managing it?
Not the small things like shopping around for the best place to buy a pound of nails or a tonne of lime. Or even on-farm capital investment. I am talking about personal financial planning, things like pensions and life assurance.
People are so busy farming that we don't spend much time on this stuff. Maybe we feel it will more or less somehow look after itself. Or we don't have the expertise so it keeps going on the long finger.
Also, a lot of farmers never think of retirement. Even if they do, they probably think they don't really need a pension because of the value of the farm which they think will always generate an income.
But circumstances change, as do perspectives. Like many farmers, my husband Robin took out a personal pension through one of the country's biggest banks. It was 14 years ago. Obviously, the pension was in the bank's own pension arm.
The only time Robin or, more recently, we would ever think about it is when the annual pension statement popped in through the letter box. For a time this looked okay. Its increase in value was modest but at least it was moving in the right direction.
However, in the last couple of years, it has not just stagnated, but is actually falling in value by a couple of hundred euro a year (as levies/charges exceed returns).
What brought this into focus was the contrasting performance of my pension. It is with Standard Life. I took it out nearly 20 years ago when I was working full-time.
Its current value is 50pc higher than what I invested. My accountant at the time made a couple of suggestions and I picked this one. I was lucky.
On the advice of our current accountant, we recently got in touch with an insurance expert who went through all this stuff with us.
The first thing they noticed about Robin's pension is that it is invested in a cash fund. As everyone knows, interest rates on cash deposits are on the floor.
We didn't notice this. Even if we had, we wouldn't have realised it has been permissible for quite some time to change his pension plan or provider.
And wouldn't you know it - within days of signing a form requesting the bank to furnish our broker with details of Robin's pension, he got a call from a bank official offering help on his pension.
Robin's not expecting to magically end up with a gilt-edged pension, but at least we feel we're taking some control of the situation.
Nature's quiet and tasteful display of splendour
Farmers see nature changing every day and it's never so obvious or more beautiful than at this time of the year.
In the spring, like a caterpillar emerging from a chrysalis, the first tiny pale leaf unfurls from its bud. Slowly, imperceptibly, the leaves build to full colour and the trees to full cover.
Driving along the road during the summer, the trees look so neat and polished and uniform that you could be a dignitary inspecting a military parade.
That's all changing now. Winter is coming and the lush leaves which made food during the growing season would now provide a way in for the potentially dangerous cold, so they must be shed.
For scientific reasons that are too thorny to go into here, different tree species change to different colours. Colours change faster on some trees than others, ditto with leaf-fall. No two trees look alike. What would clash on a dress works dazzlingly well in nature.
Even more than the infinite palette of changing earthy colours, I love the contrasts. On my daily car journey at the moment, I pass an aging ash where the leaves have faded to the palest shade of lime and every inch of its trunk in the background is freckled with ivy of the deepest green. Sooner or later, the leaves break off and fall.
If it's dry, passing traffic makes those that land on the road bop around before settling in crunchy fluffy banks, while those on open ground cluster in mounds perfect for kicking.
It's a quiet, tasteful display of splendour.