Secondary pension minimum contribution increasing

From January 2026 employees will need to contribute a minimum of 1.5% of their earnings to their secondary pension

Employers in Guernsey are being reminded that from January 2026 employees need to contribute a minimum of 1.5% of their earnings to their secondary pension.

The States of Guernsey said the requirement for secondary pensions was introduced to enable islanders of working age to save more for their retirement so they would not have to solely rely on the States Pension and tax-funded welfare benefits.

Since its introduction in 2024 the minimum contribution has been 1% for both employer and employee with only the latter changes next year.

From 2027 the minimum for both will be 2% with further increases planned until 2032, when the employer contribution is set to be 3.5% and 6.5% for the employee.

Emails are due to be sent by the Revenue Service to employers and payroll providers to make sure that they have made the necessary changes before 1 January 2026, the States said.

Employers can determine the level of employee and employer contributions they want to offer as part of their overall remuneration package but must offer at least the minimum contribution.