A growing number of UK company directors are working beyond state pension age, highlighting a trend in extended careers.
- The recent study by TWM Solicitors reveals that 10.6% of directors are aged over 67, impacting retirement dynamics.
- Life expectancy improvements necessitate longer working periods for financial sustainability among business owners.
- Risks associated with ageing directors include potential health issues that may affect business continuity.
- Legal tools like Lasting Powers of Attorney (LPAs) are recommended to safeguard business operations.
Recent data indicates a significant trend: more than 10.6% of company directors in the UK, amounting to 626,000 individuals, have surpassed the state pension age of 67. This statistic, reported by TWM Solicitors, reflects a broader shift as life expectancy advances, prompting individuals to extend their working lives to ensure financial stability during retirement.
Further analysis by TWM Solicitors uncovered that 7.7% of these directors, equating to 423,000 individuals, are older than 70. Additionally, 1.7% are over 80 years old, representing 103,000 company leaders, while 0.2%, or 11,000, have exceeded 90 years of age. These numbers underline the reality that many are choosing or needing to delay retirement, a decision influenced by the necessity to fund prolonged retirements.
However, this trend brings with it certain risks. Directors continuing their roles beyond traditional retirement age may encounter health challenges, which could jeopardise the management and success of their businesses. Such disruptions have potential ramifications not only for the businesses themselves but also for employees, clients, and broader organisational frameworks.
Caroline Foulger, a Partner at TWM Solicitors, underscores the significance of arranging Lasting Powers of Attorney by stating, “With more people working into later life, there’s now a very real problem of companies running into difficulties in the event their owner has medical problems.” The foresight in planning for sudden health issues is pivotal to preventing operational chaos.
Lasting Powers of Attorney (LPAs) serve as a legal safeguard, allowing appointed individuals to make decisions on behalf of business owners if they lose mental capacity. Foulger stresses that, while commonly used for personal affairs, LPAs are equally crucial for business continuity. “A power vacuum or a lack of direction can see your business lose value very quickly. That can impact both you and your heirs, as well as your employees, customers and suppliers,” Foulger states.
She advises that business owners should ensure their company’s Articles of Association do not conflict with any powers granted through an LPA. Under existing regulations, directors without capacity may be compelled to retire, and the Articles of Association must accommodate the appointment of an attorney to undertake directorial responsibilities.
In summary, as life expectancy and the desire to remain professionally active increases, it is crucial for business owners and directors to implement measures such as LPAs to protect their company and personal interests in the event of unforeseen medical issues.
As directors age, implementing strategic legal measures ensures both business resilience and personal security.
