Employment and Social Security committee yesterday announced some changes due to affect the economic growth in the short term but said that the long term benefit would be positive.

There is a concern about the impact on small businesses forced to make increasing financial contributions over the next 10 years. The employer would be forced to contribute to the scheme from 1% rising to 3.5% by 2027. The employees rate would also rise from 1% to 6.5% although employees will have the choice to opt out whilst local firms won’t have that choice which is likely to prove costly.

Moira Sermon Director at SPF feels this could be a burden to small businesses, as rents continue to be high as well as the standard of living. There is also the cost of administrating the scheme on a small business, which will pinch.

Employment and Social Security Committee admits there will be an impact on businesses but that there will be benefits too. Deputy Michelle Le Clerc said “Guernsey has a reducing work force and the pension changes could help with recruitment of staff and provide a better package for employees and future employees.”

This could also add a short term cost to the economy due to a slump in spending. Tax income is likely to drop too, putting more pressure on the State. Despite this the committee maintains the benefits for individuals remain positive.

For pension advice please get in touch with the team at SPF.
Mark Chipperfield [email protected]
Moira Sermon [email protected]