Family Business Succession Under Pressure

Family business succession under pressure as one in four lack clear heir, new research finds

92% of family business owners want to keep it in the family, but over a quarter don’t have a qualified successor

A new study by Hymans Robertson Personal Wealth reveals a stark gap between intention and reality for family business succession planning in the UK. While a vast majority of family business owners, 92%, say they plan to pass on their business to a family member, 27% admit they do not currently have a clear or qualified successor within the family to take over the reins.

The research findings highlight a potential vulnerability among family-run firms, many of which form the backbone of the UK economy. Despite the strong desire to preserve family legacies, almost 1 in 5 (19%) have no succession plans at all, 34% have a plan in place and 46% are still in the process of developing theirs.

Jeff Simpson, Head of Wealth Management at Hymans Robertson, says the data points to a worrying lack of preparation at a critical moment for many family businesses.

“Family business owners face a myriad of issues and challenges, from family dynamics and finances, right through to government changes. Transferring ownership is a deeply personal and complex journey that goes well beyond financial decisions."

"The wider economy, alongside recent policy shifts from the new Government, adds yet another layer of complexity. Many business owners are clearly worried, and rightly so.”

The research underscores that emotional factors remain a key hurdle in the transition process. More than a third of respondents (36%) say they are concerned about creating family disharmony during the transfer of ownership, while 33% worry about preserving their company’s values in the hands of the next generation.

For those not intending to pass the business on to family, the most commonly cited reasons were a lack of interest or perceived inability among family members to take over, a view held by 38% of respondents.

Simpson commented: “Without a clear plan, business continuity is at risk. Succession isn’t just about choosing a successor, it’s about preparing the next generation, addressing family expectations, and aligning personal, financial and business goals. The sooner families start these conversations, the better placed they’ll be to preserve both their wealth and their legacy.”

Transferring ownership of a family business is not just an emotional decision, it’s a financial one. According to the research, 70% of family business owners are concerned about the wealth management and financial planning aspects of succession.

Financial complexities, including higher tax liabilities (32%) and cash flow challenges (25%), add to the burden of planning for the future. Despite this, 36% of business owners have never sought professional advice on succession planning, leaving them to tackle unexpected financial hurdles without support.

Simpson emphasises the need for expert guidance, stating:

“Taking proactive steps such as early financial planning and seeking expert advice can help family businesses protect their future and ensure a smooth transition.”

Click here to read the full report.

Join Hymans Robertson Personal Wealth and guest speakers from Cut The Mustard Consultancy, Squire Patton Boggs and Family Business United, at their upcoming webinar – Securing the legacy: Planning a smooth transfer of family business ownership.

Gain insights from wealth management, legal, and family business experts as they explore the risks, opportunities, and practical steps involved in handing over the reins. Register now to secure your place at the webinar taking place on the 24 June. The webinar will also be available on-demand for anyone who registers interest.