GCF response to Guernsey Household Income Report
Guernsey: as wealthy as we think?
Guernsey and the Channel Islands are often perceived as – or promoted to be – a group of idyllic, thriving islands where wealthy individuals live in peace and tranquillity. The latest Guernsey household income report, published by the States of Guernsey, paints a much more complex picture. In reality, we are living in a society where the fortunes of the local population are much more mixed.
The standard definition of those at risk of relative income poverty used by international organisations like the OECD measures the number of people living in households with an income of less than 60% of national median income, after taking account of the number of individuals living in the household. In 2014, the median household income in Guernsey was around £31,000 per year after households have paid income tax, social security contributions and housing costs. Households living on less than 60% of Guernsey’s median income would be living on a household income of less than £18,650 per annum on this basis.
The latest figures show that 27.1% of all households in Guernsey and 22.3% of people living in Guernsey – that is just over one in five of the local population - would be classed as at risk of living in relative income poverty under this international definition. This implies 12,475 people living in Guernsey are at risk of relative income poverty and have household incomes below 60% of median income.
A staggering 68.3% of single parent households and 56.9% of households with one adult over age 65, have household income below 60% of the median income suggesting that policymakers may need to closely monitor relative poverty levels among single parent and single pensioner households.
In addition, 31.7% of children living in Guernsey live in households whose income is less than 60% of the median income. The percentage of children at risk of relative income poverty is perhaps the most worrying statistic of all and shows that there is no room for complacency about child poverty levels on the Island.
These figures highlight the importance of the States of Guernsey implementing the social benefit welfare reforms without further delay. The introduction of the secondary pension scheme should also be prioritised in order that future generations will have the potential to have higher incomes in retirement. As things stand, the States is proposing to index the Guernsey old age pension to the retail price index from 2025 which, other things being equal, is likely to lead to higher levels of relative income poverty for those pensioners who rely heavily on the old age pension for their income.
A civilised society is often judged by how it treats its poorest and most vulnerable members of society. It is time that our political leaders take notice of these figures and start to take action to improve the incomes and the lives of our poorest and most vulnerable households.
Guernsey Community Foundation