The state pension was “never designed” to be a replacement wage for Jersey’s pensioners to live on, the social security minister has said.
Minister Lyndsay Feltham made the statement in response to concerns raised by backbencher Deputy Max Andrews about struggling pensioners, particularly those on lower incomes.
The minister’s assessment comes amid growing debate about the sustainability of pension systems across the British Isles, with Feltham warning that a state pension matching wage levels would require significant redesign and would be “very difficult” to afford given the island’s aging population.
Feltham acknowledged it would be nice to “have a magic wand and make the old age pension higher” but cautioned this would place additional burden on the working population.
She said: “From those people that are currently employed and knowing the pressures that we’ve got on the island, that is something that I cannot currently do.”
The pension debate comes as the Isle of Man announced plans to scrap its state pension triple lock in favour of a new “double lock” system
Isle of Man Courts of Justice/Getty
Deputy Andrews conceded that a state pension matching full-time minimum wage would be “unrealistic”.
He emphasised that the Government needs to secure stronger tax revenues and social security contributions to fund increased social expenditure, while reducing spending on “non-frontline” services.
The pension debate comes as the Isle of Man announced plans to scrap its state pension triple lock in favour of a new “double lock” system.
The proposed change would affect around 6,600 pensioners who reached state pension age after April 2019.
Under the new Manx Pension Guarantee, payments would rise annually by either inflation or a minimum two per cent rise, whichever is higher.
Isle of Man Treasury Minister Alex Allinson described the reforms as “about intergenerational fairness, and accommodating the needs of today’s children and grandchildren”.
The move marks a significant departure from the current triple lock principle, which mirrors the UK system of increasing pensions by the highest of inflation, earnings, or 2.5 per cent.
The Isle of Man’s changes would see annual pension payments increase from £12,558 to £12,831 for newer pensioners, reflecting current Manx inflation rates of 2.2 per cent for 2025-26.
Those who reached pension age before April 2019 would continue receiving higher increases, with payments rising from £8,814 to £9,175.
The reforms come amid concerns about the sustainability of the Isle of Man’s National Insurance Fund, currently valued at £1.09 billion. Without intervention, the fund could be depleted by 2047-48, according to a report released in October.
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The Treasury has identified increasing life expectancy, leading to longer pension claim periods, as a key factor in the fund’s projected exhaustion.
The pension sustainability debate extends across the British Isles, with recent Department for Work and Pensions figures showing 12.9 million people receiving state pensions in May 2024.
This marks a 1.7 per cent increase from the previous year, with 220,000 new pension recipients adding pressure to public finances.
A recent Hargreaves Lansdown survey revealed only one in ten Britons believe the state pension will not exist when they reach retirement age, while a quarter remain uncertain about its future.
Ian Cook, chartered financial planner at Quilter Cheviot, noted: “While the policy is undeniably popular, it raises critical questions about fiscal sustainability.”
Feltham is also considering widening access to subsidised doctor’s appointments for pensioners
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Back in Jersey, Feltham outlined plans to improve support for pensioners through existing welfare mechanisms. She emphasised that while the pension itself isn’t means-tested, it is supported by other Government assistance programmes.
The minister revealed she is exploring plans to increase the number of pensioners who can access healthcare subsidies. This includes potential expansion of schemes to help those on low-incomes receive dental, foot and eye care.
Feltham is also considering widening access to subsidised doctor’s appointments for pensioners.
Deputy Andrews added that government support is particularly crucial “during the winter months because that is the time when people are seeing their expenses increase.”
