Best of FT Money 2017: Giving financial advice to ‘The Archers’

Every week, around 5m people visit the English village of Ambridge. The rural setting is what attracts us — but we tend not to stay for long. Most of us drop in after the 7pm news on BBC Radio 4 and depart 12 minutes later, having heard the latest village gossip.

Ambridge, of course, is the fictional setting for The Archers — the world’s longest-running radio soap opera, which has captivated listeners with its “everyday story of country folk” for more than 65 years.

Making money from the land is a tough business. The farming families toiling away in the make-believe county of Borsetshire have had more than their fair share of drama. Floods, livestock disease, plummeting milk yields and nasty accidents are staples of the script, interwoven with family feuds, triumphs and tragedies.

Money worries are never far away — yet recently, most of the big storylines have been particularly financial. Divorce, squabbles about inheritance, property disputes, money lending and the lack of affordable housing in the village are just some of the issues that characters have been grappling with (some even flinging flapjacks in protest). Ambridge’s lack of money know-how has prompted one expert to dub the drama “An everyday story of non-financial folk”.

Perhaps it is time for a new character to join the cast? There are certainly enough potential clients for a firm of financial advisers to do a roaring trade in Ambridge (their company motto could be “you shall reap what you sow”). There are plenty of real-life professionals who would relocate to rural Borsetshire in a heartbeat (we present their responses to a selection of current village dilemmas below).

Farmers are usually terrible at taking financial advice, and don’t like paying for it

First in the queue is Felpersham Accountants — the Twitter handle of four real-life financial professionals. Named after Ambridge’s fictional nearest city, the anonymous superfans frequently post letters advising “clients” on the best course of action.

Speaking to the Financial Times via their press office, @felpershamaccs said that domineering farmer Brian Aldridge was their favourite client: “His family share scheme will provide us with recurring dispute resolution fees for years to come.” However, the firm has stopped advising bent businessman Matt Crawford: “He has failed on several occasions to pass our customer due diligence checks, and pay past fee notes.”

Whether any of the characters would take their advice is another matter.

“Many people in the UK do not have access to financial advice, do not know how to access it, or do not bother,” say the team behind the Twitter account. “The shambolic state of affairs in Ambridge is therefore maybe normal. We do not hold the view that all storylines should have happy endings. We would rather they portrayed real lives.”

Farmers face a complex set of financial problems — and that’s before any Brexit-related storylines about vanishing agricultural subsidies.

“Farmers are usually terrible at taking financial advice, and don’t like paying for it,” says Andrew Wilkinson, partner at the Midlands-based law firm Shakespeare Martineau. “The underlying problem is that most farmers don’t make very much money. They are asset rich, and cash poor.”

Selling off land can be the only way to relieve cash pressures (in Ambridge, and in real life). The value of farmland has soared over the past decade, but who gets the money is often complicated. Listeners know this from the aborted sale of Brookfield Farm in 2015 which would have netted £7m for farmer David Archer and wife Ruth — but David’s siblings Elizabeth, Kenton and Shula would all have been due their share.

“The biggest problem for the Archers overall is succession planning, but it’s rare to hear anyone actually discussing it,” says Chris Rolfe, an avid Archers listener and accountant. “In the olden days, the eldest son would get the farm, and his bride would be expected to come with sufficient dowry to pay off the other siblings.”

Modern family formations have complicated matters — mirrored by Ambridge’s raft of divorces, remarriages, estrangements, step-children and illegitimate sons.

There are several older characters whose deaths could trigger a bitter inheritance battle, surely a storyline many FT listeners would savour. How Brexit will affect Home Farm’s ability to recruit soft fruit pickers is another. But the show’s editor, Huw Kennair-Jones, is not giving anything away.

“We are watching the farming community both here and in Europe and thinking, well, what is going to happen,” he says, adding that the programme’s agricultural adviser Graham Harvey is “constantly re-evaluating the [Brexit] situation”.

And could a financial adviser join the cast anytime soon? “Anything is possible, and everything is possible — that’s what is brilliant about working on a show like this,” he says. Here are a selection of financial posers that they could help the villagers tackle.

Dilemmas of wealthy divorcees

Wealthy business magnate Justin Elliott would be top of the client list for any financial adviser in Borsetshire having struck countless land and property deals. Fiancée Lillian Bellamy is his latest romantic acquisition (although the ink is not dry on his decree nisi from haughty ex-wife, Miranda).

The gin-quaffing pair have made their love nest in the Dower House, although Justin threw a wobbly when he found out that the property was actually owned by Lillian’s ex, the village bad’un Matt Crawford. Fleeing his creditors, Matt placed the property in trust. He and his dubious-sounding solicitor are the trustees, although Lillian is the sole beneficiary.

At Lillian’s behest, Matt has now agreed to sell the Dower House to Justin (at market value, plus 10 per cent). However, long before Lillian’s champagne soirée at Grey Gables with Matt, professional listeners sensed an unhappy ending.

“If Justin was my client, I’d make Lillian sign a pre-nup,” says Angela Murfitt, independent financial adviser at Fairstone. Based in Boldon, Tyne and Wear, she has been known to listen to the 2pm repeat of The Archers during her lunch break.

“Justin is in the final throes of an expensive divorce,” she says. “Clearly, there is inequality of wealth between him and Lillian. So how would he feel about losing more of it?”

When you get divorced, your will isn’t automatically revoked

Although pre-nups are not legally binding in the UK, judges are increasingly taking heed of them. “If the scriptwriters are tempted, they should note that both parties need to have received independent legal advice 21 days before the wedding,” says Ms Murfitt.

Before tackling the pre-nup, she would ensure that Justin’s divorce from Miranda had been fully squared off.

“When you get divorced, your will isn’t automatically revoked,” she says. Noting that Simon Williams, the actor who plays Justin, had a recent bit part in TV soap EastEnders, she speculates what could happen if he was “killed off” in The Archers.

“If Justin hasn’t changed his will and he dies before marrying Lillian, Miranda could technically make a claim on his estate even though she’s already had the divorce settlement,” she adds. This could result in the tragic Lillian being thrown out of the Dower House (great drama — she would likely make a counter-claim).

A lover of conspiracy theories, Ms Murfitt also suspects that Ruby (the dog that Matt gave Lillian for her birthday) could be carrying a covert listening device.

As for the property trust, Ben Rowe, Archers’ fan and employed barrister in the commercial litigation department at Stewarts Law, says it is quite common for a settlor to be a trustee of a trust — so long as they are not also the sole beneficiary, as then the trust would serve no purpose.

“In many situations, where there is a bare trust (which this appears to be) the beneficiary, Lillian, can invoke the 1841 case of Saunders v Vautier and demand that the trustees move the property directly into their name, and terminate the trust,” he says.

However, he accepts this could not be stretched out over several weeks of episodes with anywhere near as much dramatic tension.

Getting your children on the property ladder

Local bobby Harrison Burns has to be one of the most financially astute characters in The Archers. Girlfriend Fallon Rogers, who runs the local tea room, was agog when he revealed the savings and investments he’d been keeping under his hat. Yet this was still not enough for the couple to pay the deposit for Woodbine Cottage — the ramshackle village property they rent, which is now up for sale.

Now, Harrison’s parents are remortgaging their own property to get their son and his cake-making partner on the ladder.

“A lot of parents will no doubt be thinking of this themselves — but doing so without a formal, written agreement is an absolute disaster zone,” says Ms Murfitt. For starters, his parents run the risk of losing their own home if Harrison and Fallon fail to keep up with the repayments.

“If parents have loaned money for a deposit, lenders will count the repayments as ‘committed expenditure’ meaning Harrison and Fallon may not be able to borrow as much as they think,” she says. To get around this, parents might formally state that the money is a gift, not a loan. But this could be a costly mistake if the couple later split up.

“Fallon’s going to have equal rights on that property,” Ms Murfitt warns. Parents could protect themselves by registering their contribution as a “second charge” on the property, repayable to them if it is ever sold. “They could also settle the money into a trust, which would give Harrison the deposit in return for an IOU,” she adds.

Keeping it in the family

In Ambridge, money lending among families is rife. “I’ve lost track of how many inter-family loans have been doled out in The Archers — nobody ever seems to go to a bank,” says Ian Smith, director of Central Wealth Planning, a Midlands-based adviser whose office is in a former cow shed.

Is the demon drink to blame? Kenton Archer, landlord of The Bull, borrowed untold thousands from farmer brother David Archer after a flood wrecked the village pub. Since then, Kenton has splashed out on a new car and sunk thousands into the gin-distilling exploits of feckless barman Toby Fairbrother. Meanwhile, David’s family finances have been blighted by an outbreak of livestock disease — but Kenton is unable to repay the loan, blithely offering the odd round of drinks as “interest”.

“This is a classic case of shutting the stable door after the horse has bolted,” says Mr Smith. “We can only assume that David’s got nothing in writing, so there is no formal repayment schedule or loan agreement to enforce.”

Not long ago, David was in the money when mother-in-law Heather Pritchard died. His wife, Ruth (her only daughter), inherited the lot. Listeners already know that the couple have committed that money to their pensions (daughter Pip was rebuffed when she asked for a loan to buy cattle to graze the herbal leys — in effect a salad bar for livestock). At one time, Pip had the money herself — but she foolishly invested in Toby’s Scruff Gin empire.

“As an ex-City boy, you would have thought Toby would have set up an Enterprise Investment Scheme to raise the money tax efficiently,” Mr Smith adds.

Even if the financial clouds darken over Brookfield, soaring land values mean the family are unlikely to be wiped out (perhaps they could flog Hollowtree to Justin Elliot).

“If David and Ruth did end up going bankrupt, money in their pensions would be protected — providing the trustee in bankruptcy doesn’t think they have hived the money off in contemplation of the fact that they are about to go under,” Ms Murfitt says.

The perils of renting property

One has to feel sorry for Oliver Sterling. Not only is he mourning the loss of his wife, Caroline, but the tenants from hell are living in their former home, Grange Farm. Maybe that’s being a tad harsh on the Grundy family, but they do act like they own the place (they were tenant farmers here years ago until the evil Matt evicted them).

While the Sterlings were in Tuscany, pigs and ferrets have roamed freely, they’ve set up a cider club in the shed and the family are making extra cash by running a holiday lettings business on the side.

“Let’s hope Oliver gave the Grundys a tenancy agreement, because if he didn’t, the law is definitely not on the landlord’s side,” says Ms Murfitt.

Assuming one was drawn up, Oliver could notify the Grundys of various breaches — the remedy for which would be written into the agreement (such as “keeping ferrets gives the landlord the right to serve notice”). As he grapples with which of his properties to sell, he may be prepared to turn a blind eye to the Grundy’s sub-letting — but mortgage lenders and insurers would not.

“Say there was a fire at Grange Farm,” Ms Murfitt speculates. “When they fill out the insurance claim, they will be asked if they are running a business from the property.”

Renting out rooms will count, and if insurers or mortgage lenders were not informed, there could be nasty financial consequences.

“Websites like Airbnb are very much in the public domain,” Ms Murfitt adds. “Insurance assessors are not stupid, and will have done their research before they come and visit.”

Anyone considering letting out their property should also inform their mortgage lender. “They may increase your interest rate, as they see it as an increased risk,” Ms Murfitt warns. Plus, any income gleaned above the government’s incoming digital tax break will need to be declared to HMRC: “Does Eddie Grundy do a tax return? I doubt it.”

An unaffordable slice of village life

The parish council meeting to discuss Justin’s proposed housing development pitched the “Nimbys” against the Grundys. Well-heeled residents expressed concern about affordable housing attracting “riff raff” to the village, but nodded it through after Emma Grundy’s rousing cri de couer. Will her property-owning dreams come true? Unlikely, say the Felpersham Accountants.

“If Justin’s development is — as we suspect — about affordable home ownership, then it only needs to be affordable to people with a ‘median income’. We do not expect Emma and husband Ed to fall into this category, so they are unlikely to have a deposit and sufficient regular income to get the required mortgage. We hope to be proven wrong.”

There are some people in the village worse off than Emma and Ed. Jill Archer’s flapjack-throwing protest after the closure of the Happy Friends Café (which used food waste to feed needy locals for free) highlighted the growing issue of rural poverty.

Even so, Emma has had to take a third job working nights in a factory to pay off the children’s trampoline she bought using her credit card. Others doubt that self-employed Ed, who took on a huge loan to buy a new tractor, has the requisite three years of accounts.

Their situation is galling considering Emma’s former husband (Ed’s older brother, Will Grundy — don’t ask) owns a property thanks to an inheritance from an aged aunt. Her will had not been updated to reflect Ed’s birth, so his brother scooped the lot.

“This is a situation I have seen many times in real life,” says Mr Wilkinson. “When drafting a will, rather than naming one particular child, stating ‘all of my nephews at the date of my death’ could have avoided this.”

In the meantime, the FT’s Money Mentor columnist Lindsay Cook says 33-year-old Ed should invest the £1,000 he has just inherited from Caroline Sterling in a Lifetime Isa.

“He can keep on paying in to the tax-free account and get a 25 per cent government bonus that can be used towards a future house purchase, or accessed in retirement,” she says. Failing that, maybe the cash-strapped couple will find a magic money tree growing on Lakey Hill. We wish them luck.

Protecting your children’s inheritance

You are unlikely to hear it scripted in The Archers, but agricultural property relief means that passing on the family farm to the next generation is unlikely to incur inheritance tax.

Some farmers, like Home Farm’s Brian and Jennifer Aldridge, have set up family investment companies to control when assets are received, and by whom. Allotting family members different classes of shares to squabble over has allowed Brian to divide and rule (well, listeners all know his views on the herbal leys). But the affairs of other farming families are not so well organised — take Pat and Tony Archer, for instance.

The land sale for Justin’s proposed housing development on Bridge Farm should bring in £900,000 (although this would have been £1m if their hapless son Tom Archer had stuck to making kefir, the fermented milk drink, instead of playing property developers).

Carolyn Gowen — a smallholder, Archers’ fan and certified financial planner at Bloomsbury Wealth — hopes that Pat and Tony gifted this land to Tom and sister Helen before the sale in order to benefit from the relief.

Had they been really organised, the family could also have placed some of the proceeds into a discretionary trust enabling Pat and Tony to retain some control over how and when their money is passed on, she says. This would offer protection from hostile creditors and divorce (think Rob Titchener) or the risk that fun-loving teenage farmhand Johnny will blow his inheritance at music festivals with Freddie Pargetter.

“Pat and Tony could be the trustees, perhaps alongside another family member, though this is a very important decision that they shouldn’t just leave to the scriptwriters,” Ms Gowen wryly suggests. “Although they can’t give the money with strings attached, they can write a letter of wishes setting out how they would like the trustees to treat the money after they have gone — for example, prioritising school fees for Helen’s sons, Henry and Jack, or a housing deposit for Johnny.”

Trusts can be costly to set up, and a solicitor would need to draw up the documentation (perhaps Usha Franks could assist?) so a sum of at least £150,000 would be needed to make it worthwhile. For smaller legacies, Junior Isas could be considered.

“Jisas are very tax-efficient investments, but the children will get access to the money when they turn 18,” Ms Gowen warns.

Mr Smith says many of his clients start pensions for their children and grandchildren. “The big advantage is they can’t get the money until they are 55,” he says. Up to £2,800 can be placed in a Junior Sipp per year (rising to £3,600 with tax relief) and once invested, can compound away for a very long time.

In 60 years or so, perhaps a future episode of The Archers will see a doddering Henry receive a whopping great pension thanks to his long-suffering mother’s prudence. You never know — he may be sitting on a kefir gold mine by then.

Claer Barrett is the editor of FT Money and has listened to ‘The Archers’ for more than a decade; claer.barrett@ft.com; Twitter: @claerb.

What financial storyline would you like to see tackled in ‘The Archers’? Leave your comments below, or get in touch: Money@ft.com

Illustrations by Daniel Mitchell

The article was first published on August 31 2017