THE Social Security Minister has moved to reassure Islanders that the Island’s pension funds are in a “strong position”, as she hit out at “scaremongering” criticism of plans to take £50m every year for the next four years from the grant to the Social Security Fund.
Plans to reduce the annual contribution to the fund were revealed in the government’s 2026 Budget, sparking strong criticism from senior backbench politician Deputy Sir Philip Bailhache.
“We seem to be unable to control our expenditure,” he said, adding: “Nearly a quarter of a billion pounds is indirectly coming from a fund which supports the payment of pensions and benefits for our children and grandchildren.”
Those concerns were echoed by former Senator Ben Shenton, who, writing in the JEP on Wednesday, argued: “Plundering reserves to meet current spending is not a recipe for stability – it’s a recipe for future crisis.”
But, responding, Social Security Minister Lyndsay Feltham hit back at “misconceptions” she said had “crept into the public debate”.
She said there was “more than enough money in the funds to continue paying pensions” – with reserves of over £2.5 billion – “enough to pay pensions for the next seven-and-a-half years even if no more money were paid in”.
“This is far more than other national pension schemes: Guernsey and the Isle of Man have enough reserves to cover four years, while the UK’s would cover less than a year. And our funds will continue to grow over the next four years,” she added.
Deputy Feltham went on to defend against claims that money was being siphoned to cover everyday spending.
“This is not true. It is important that any debate on this is based on fact, not scaremongering,” she said, explaining that the decision would allow government to “make crucial investments in our health service and in our Children’s Services, expand the support we give parents through the provision of free childcare, and extend our support for healthcare to more pensioners”.
The redirected funding will include £28 million for healthcare, £8 million for improvements to Children’s Services, £3 million to expand free childcare, and £2 million to support Islanders and strengthen communities, including the expansion of the Pension Plus scheme, the Minister said.
She added: “A temporary reduction in the States Grant to the Social Security Funds unlocks the money to do all this – without compromising our ability to pay pensions.”
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