From Alan Hall.
AS many of your readers will be aware, the annual increase in Jersey pensions is linked to the Average Earnings Index. As a result, in recent times, pension increases have fallen behind the various retail price indices.

The Pensioner Index (compiled by the States of Jersey Statistics Office) records that pensioners’ inflation has increased by 11.2 per cent in the three years to June 2010, whereas in this same period, the Average Earnings Index, and therefore pensions, have risen by 8.4 per cent. Over the past three years, it can therefore be seen that pensions in payment have fallen behind pensioners’ inflation by 2.8 per cent.

Last year, pensioners received a 1.1 per cent increase from 1 October and a recent States of Jersey Business Tendency Survey (published 13 April) has suggested that the anticipated change in employees’ earnings for 2011 was only 0.2 per cent. Should this indeed be the case then once again pensioners will receive a minimal increase and will see their incomes falling even further behind Jersey’s headline inflation rates.

In the UK, pensions increased by five per cent on 1 April and furthermore their annual increases are now linked to whichever is the highest of Average Earnings, the Consumer Prices Index or 2.5 per cent. Put simply, this means that future pension increases in the UK will never be less than 2.5 per cent no matter how low their Inflation Rate or their Wages Index is construed to be.

With the escalating cost of the essentials in life together with the imminent increase of GST, I believe that it is now about time that Jersey follows suit and also introduces changes to how pension increases are applied in order that come 1 October this year; Jersey pensioners will at least receive a minimum increase of 2.5 per cent.

Perhaps one of our States Members will consider taking this issue on board and bring a proposition to the Assembly to increase old age pensions over and above the Average Earnings Index as permitted under Article 50 (g) of the Social Security Jersey (1974) Law.