Research from TWM Solicitors reveals that 10.6% of UK company directors are over 67 years old.
- The study highlights the trend of extended working years among business owners due to longer life expectancy.
- Of these directors, 7.7% are over 70, 1.7% over 80, and 0.2% over 90 years old.
- Risks for businesses arise when elderly directors face sudden health issues, threatening operational stability.
- Caroline Foulger emphasizes the importance of Lasting Powers of Attorney (LPAs) for safeguarding business continuity.
Research conducted by TWM Solicitors has brought to light that 10.6% of UK company directors have surpassed the state pension age of 67. This statistic equates to 626,000 out of 5.8 million directors across the nation, a number that reflects a growing phenomenon of professionals continuing their careers beyond traditional retirement age.
The primary driver behind this trend is the improved life expectancy, which necessitates prolonged employment to secure financial stability during extended retirement years. Consequently, many business owners find themselves working well into their later years, with 7.7% of directors over 70 years old, 1.7% over 80, and a small fraction, 0.2%, over 90.
Despite the admirable dedication of these individuals, there are inherent risks associated with such an aging leadership demographic. Older business owners face an increased likelihood of sudden health issues which could disrupt management and operations. Caroline Foulger of TWM Solicitors notes that without proper preparation, these health challenges could jeopardize the success of the business and the security of its employees.
Caroline Foulger highlights the critical role of Lasting Powers of Attorney (LPAs) for business owners who are working into their seventies. LPAs serve as legal arrangements that empower another individual to make decisions on behalf of someone who has lost mental capacity. This forward-thinking strategy is vital to prevent business disruptions due to a director’s incapacitation.
Historically, LPAs have been more common in personal finance; however, they are equally essential for business affairs. Appointing a trusted individual, such as a family member or colleague, ensures that the business can continue to operate smoothly, even if the primary decision-maker is unable to fulfill their role.
Additionally, Foulger advises family business owners to review their company’s Articles of Association when setting up LPAs. It’s crucial that these documents do not conflict, as this could lead to disputes among stakeholders and result in unintended retirements or operational setbacks. Foulger underscores that directors often miss this essential step, potentially leaving their businesses vulnerable.
Proactive planning with LPAs is essential for the continuity of businesses led by aging directors.
