blog.gov.je
By Deputy Lyndsay Feltham, Minister for Social Security.
The Council of Ministers has published its Proposed Budget for 2026–29. This includes a proposed temporary reduction in the States Grant up to 2029 to help pay for investments in services. The States Grant is a transfer of money from the general taxpayer into the Social Security Fund each year.
In recent weeks, there’s been much discussion about the Social Security Funds and this proposal. The Fiscal Policy Panel’s latest Annual Report, published on 3 November, recognises that the proposed reduction in the States Grant is temporary but states that action should only be made after a careful actuarial assessment.
I want to give Islanders confidence that our pension system is in a very strong position, with these proposals backed up by independent advice.
Our Social Security Fund currently holds more than £2.5 billion in reserves – enough to pay pensions and benefits for the next seven and a half years, without any contributions being paid in. In comparison, Guernsey and the Isle of Man hold about four years’ worth of reserves, while the UK’s last less than one. This financial strength allows us to plan with confidence.
The upcoming Budget proposes paying £184 million from general taxation into the Social Security Fund over the next four years, clearly demonstrating our commitment to sustainability.
Before agreeing the budget, I asked the independent actuaries of the Social Security Fund to update their long-term financial projections and give advice on the long-term impact of reducing the States grant. Their letter is published on gov.je here.
In the States Sitting at the end of October I also undertook to request additional actuarial projections to assess the long-term impact of the temporary adjustment. This further actuarial analysis is now available. This is responsible financial planning, so that we can invest in Islanders today, without increasing taxes or contributions, and while keeping pensions secure.
Today’s pensioners are guaranteed an uplift every year to keep up with the cost of living, and by even more when wages rise faster than prices. This year, pensions increased by 4.15%, ensuring continued protection for Islanders in old age. With today’s pensioners secure, my focus is now on the next generation. I have launched a review to make sure our Social Security system remains fair, sustainable and ready to protect future generations as well as it protects today’s.
As the Social Security Fund is in such good health, we can temporarily reduce the States Grant – which is the amount taxpayers pay into the Fund – for the next few years. This gives us the flexibility to invest in other priorities that matter to Islanders – such as health, education and wellbeing of our children, families and communities – while the Fund continues to grow.
These investments include funding of up to:
- £28 million a year to strengthen our healthcare system, including preventative care and digital health services
- £8 million a year to improve children’s services
- £3 million a year to expand free childcare for 2-to-3-year olds
- £2 million a year to support Islanders through schemes like Pension Plus and help families with back-to-school costs.
Jersey’s pension system is one of the strongest of its kind, thanks to careful planning over decades. We continue to review how the system is funded, taking independent advice to make sure it remains sustainable for generations to come.
This is prudent financial planning: we are investing in Islanders today without raising taxes or contributions, while keeping pensions secure.
I welcome a fact-based debate that focuses on the needs of future generations. Islanders can be confident their contributions are well managed, the Government is protecting the Social Security Funds, and that this temporary adjustment supports both today’s needs and tomorrow’s pensions.