Loophole leads to reduced pensions

About 13,000 people are claiming pensions from Guernsey

Islanders who are victims of a loophole in Guernsey's pension system dating back 50 years are being told they will have to have a reduced pension.

Between 1951 and 1964, people only had to contribute to the island's pension fund on a voluntary basis.

Not everyone chose to pay the maximum amount and they are now asking whether that means they will have to continue to settle for less.

Social Security Authority president Deputy Owen Le Tissier said it was only a minority who did not pay into the scheme during this time and some benefits are available to help.

I can see their problem and see how they feel that they've been hard done by Deputy Owen Le Tissier

The loophole was closed after the introduction of a new law in 1964 making payments to pensions compulsory.

Deputy Owen Le Tissier, said the people who did not pay their contributions at that period are in the minority of the 13,000 who currently receive pensions, both on the island and who have retired abroad, which costs the island's States about £40m and £45m.

He said: "I can see their problem and see how they feel that they've been hard done by.

"But I think that all those who continued paying during that period, which was the majority, would also have a right to whinge as to why they did pay when it was voluntary when those who opted out received the same benefit."

Deputy Le Tissier also said it would mean too much of an increase on States spending on pensions if plans to bring everyone up to the full level were suddenly brought in.

It is estimated it would increase the pension budget to about £78m.

Deputy Le Tissier also said: "We can't jump from that because there are some people in this category.

"If people do have difficulty to live on that, we do have supplementary benefits."

He said of this kind of pension problem: "It can't happen again because the pension is now compulsory."