Jersey statutory workplace pension plan shelved

Workers in Jersey are not guaranteed a workplace pension

Jersey’s government has been criticised for shelving plans for statutory workplace pensions.

Under the leadership of Deputy Kristina Moore, the previous Council of Ministers had been developing policies to force businesses to offer their staff a pension scheme.

But the BBC has learned that the current government has put those plans "on hold with no legislation planned for this ministerial term".

Instead, the social security minister said her priority was to "support employers and workers in the transition to a living wage".

Deputy Lyndsay Feltham said introducing compulsory pension rules would have put government efforts to move towards the living wage "in jeopardy"

Earlier this week, the Council of Ministers confirmed the minimum wage was due to rise from £11.64 to £13 per hour from 1 April 2025.

This was in preparation for April 2026, when the government said it would set the new minimum as a "living wage" - the amount considered necessary to meet living costs - as two thirds of the 2024 median wage.

"Planning for retirement and planning for pensions into the future is a very good thing," said Deputy Lyndsay Feltham.

"But I think it's a very difficult thing for me, as social security minister, to have said to people that they need to put money aside for the future when they can't afford to put bread on the table now."

She continued: "We know that we have an ageing population.

"We know that not all employers are currently offering pension schemes, and again, I would encourage employers to do that.

"But introducing a compulsory pension scheme at this point in time...would have put our moving towards the living wage in jeopardy and that is my priority right now."

Deputy Louise Doublet said the government should help people plan for the future, in addition to assisting them "in the here and now".

"I can understand that the minister is prioritising," said Deputy Louise Doublet, the Chair of the Health and Social Security Scrutiny panel, which reviews the work of Ms Feltham's department.

"But government needs to help people in the here and now with costs of living, and government also needs to help people plan for the future to ensure that our citizens are living well into their old age."

"The younger you start saving for your retirement, the better and probably the more enjoyable your retirement will be," said pensions specialist Mike Freer

In Guernsey, companies of 26 employees or more have been required to automatically enrol them into an approved pension scheme since 1 July 2024.

But in Jersey, officials estimate that "only 30% of people have an occupational or private pension plan", according to the former Social Security Minister, Deputy Elaine Millar, in a speech to business leaders in October 2023.

"A compulsory workplace pension scheme would obviously be a level playing field for all employers, because they would then have to make contributions at the same level as everybody else," said Mike Freer, a pensions specialist.

"If it's not compulsory then what you have are different playing fields and some organisations will recognise this as a positive thing to attract good talent and retain good talent.

"The key issue for employers is that this is an additional cost and a significant additional cost to their bottom line.

"They have to then decide whether or not they can afford to absorb that cost or whether they need to pass it on to the consumer or stop giving pay rises to their members of staff because they would argue that they're making a pension contribution."

He added: "The more you save, and especially the younger you start saving for your retirement, the better and probably the more enjoyable your retirement will be."