12 June 2025

Securing farm futures

Low pension coverage and late retirement are stalling generational renewal. New research compares EU systems to explore solutions for supporting Irish farmers through the retirement transition.

The sustainability of agriculture in Europe is deeply intertwined with the financial wellbeing of its farmers, particularly concerning retirement provisions. As the farming population ages, ensuring adequate pension systems and the financial security of individual farmers becomes crucial in not only maintaining the vitality of rural communities, but in facilitating generational renewal and the broader dynamics of farm succession.

Research undertaken by Maynooth University and Teagasc examines the design of social security pension systems for farmers in five European countries, to identify gaps in Ireland’s current system and suggest practical solutions. The research explored the current state of pension coverage among Irish farmers in comparison to EU counterparts, examining various national approaches to farm retirement schemes and drawing lessons to enhance pension provisions in the agricultural sector.

Pension provision for farmers

Anne Kinsella, Senior Research Economist in the Rural Economy and Development Programme at Teagasc, says: “Farmers face unique challenges regarding pension provision due to lower and variable incomes, the intergenerational nature of farm ownership and cultural attitudes towards retirement. In Ireland, a significant portion of farmers have limited pension coverage, with many not planning to retire formally.”

This is worsened by the fact that some farmers may not qualify for the State Pension (Contributory or Non-Contributory), due to gaps in their Pay Related Social Insurance (PRSI) contributions. Such gaps can arise from late succession to farm ownership or low-income years where PRSI contributions were not made.

As a result, many farmers may need to continue working later in life or rely financially on family members. This can hinder farm succession and generational renewal. In 2023, approximately 45% of those working in the agriculture, forestry, and fishing sector had supplementary pension coverage, compared to 88% in the financial services sector (CSO 2024).

Private pension coverage

A key challenge facing the European agricultural sector is the low level of private pension coverage among farmers. A study funded by the Department of Agriculture, Food and the Marine revealed that only 50% of Irish farmers have private pension coverage. Disparities exist across farming systems: around 70% of dairy and tillage farmers have private pensions, compared to only 40% of sheep and cattle farmers.

Anne explains: “Barriers to uptake include affordability, procrastination, distrust in private providers, and reliance on savings or assets instead. Many farmers expect to rely on the state pension, family support, continued farming, or personal savings once they reach retirement age.”

Lessons from Europe

To assess Ireland’s position relative to “best practice”, researchers evaluated pension systems for farmers in five European countries: Austria, Finland, France, Germany, and Poland. These countries, all members of the European Network of Agricultural Social Protection Systems (ENASP), offer tailored social welfare schemes for farmers, serving as important benchmarks.

Michael Hayden, Assistant Professor of Accounting at Maynooth University, highlights that each country has its own approach to farmer-specific social insurance.

“In contrast, Ireland operates a single social security system with a general distinction between self-employed and employed workers. Farmers are classified as self-employed, but with some limitations in the definition for social insurance purposes.”

ENASP countries recognise the unique needs of rural populations, including economic vulnerability, demographic challenges, and the central role of family farms. The research identifies which aspects of these systems could be adapted to help increase pension coverage and improve retirement adequacy for Irish farmers.

Using data from ENASP countries and international OECD comparisons, the analysis explored coverage levels, contribution models, and qualification criteria. The findings highlight how policy reform could bring Ireland more in line with European norms.

A dedicated farm pension system?

EU countries take two broad approaches: either farmers are included in the general self-employed social insurance system, or they benefit from a dedicated preferential system. There are good reasons to adopt a separate model for farmers. Agriculture is a high-risk, low-profit sector, and higher pension contributions may not be viable without support, emphasises Bridget McNally, Associate Professor of Accounting at Maynooth University.

“Dedicated systems can also serve wider goals, like preventing rural depopulation, encouraging timely retirement and promoting regional equality.”

In some cases, early retirement schemes are linked to succession incentives, which free up land for younger farmers.

Critics argue that mandatory pension insurance is unnecessary, given that farmers can continue working, lease or sell their land, or rely on family – but these assumptions don’t reflect every farmer’s situation. Not everyone can perform physical labour into old age, and relying on family support isn’t always practical or fair. 

Policy recommendations for Ireland

Drawing from the experiences of EU countries, several key lessons emerge for improving pension provisions, and facilitating generational renewal in agriculture:

• Offer early retirement incentives: Finland’s model shows how financial support can ease the path to retirement.
• Boost private pension uptake: Address affordability and trust barriers with financial planning support and education.
• Make PRSI contributions mandatory for farm workers: Ensure young farmers and family members build up entitlements from the start.
• Register spouses and partners for PRSI: Independent contribution records reduce reliance on means-tested supports.
• Provide transitional supports: Help current farmers without adequate coverage close the gap.
• Review the means test requirements for Non-Contributory old age State Pensions: farmers should be able to retain a small amount of land (<30 acres) without affecting entitlements.

By adapting these strategies to Ireland’s context, policymakers can help secure the financial future of family farms, support rural vitality and promote meaningful generational renewal.

Legend to figure above:

1. Statutory retirement age for receipt of state pension 

2. Percentage of government funding support provided 

3. Numbers directly working in the sector (2021) 

4. The % of total workforce (2021)

Ireland

1. 66
2. –
3. 170,400
4. 3.6% 

Germany

1. 65 years 7 months
2. 81%
3. 937,900
4. 1.2% 

France

1. 64
2. 75%*
3. 1,260,391
4. 2.2%

*also includes health fund support

Finland

1. 65
2. 80%
3. 134,000
4. 3.2% 

Austria

1. 60(F)/65(M)
2. 84%
3. 420,018
4. 3.6%

Poland

1. 60(F)/65(M)
2. 85%
3. 1,649,400
4. 9.4%

Further reading

You can read this report titled “Sustainable Transition of the Rural Economy Through Generational Renewal” here.

Funding

Research supported by funding from the Department of Agriculture, Food and the Marine in Ireland (grant number 2021R631).

Contributors

Anne Kinsella, Senior Research Economist, Rural Economy and Development Programme, Teagasc Athenry anne.kinsella@teagasc.ie

Michael Hayden, Assistant Professor of Accounting, Maynooth University 

Bridget McNally, Associate Professor of Accounting, Maynooth University

Hana Hlochova, Postdoctoral Researcher, Maynooth University