Households getting poorer as incomes slump by over 10%

The income of the average household fell by 11.5% in real terms during the five-year period ending in 2022.

Since then, average earnings have declined in real terms in five of the six quarters for which data is currently available, and last year the island’s economy suffered its largest real terms contraction for a decade and a half, apart from the pandemic year of 2020.

‘This is sobering reading and sadly confirms what I have been saying for some time – Guernsey is getting poorer,’ said local economist Dr Andy Sloan.

‘Poorer in both absolute terms and relative terms, as this data is much worse than comparable UK numbers.

‘This data confirms the personal experience of the majority – a fall in real incomes of more than 10% over five years hurts.

‘In truth the pain has probably been greater as these are gross figures and don’t factor in the increased tax burden.

‘One can only hope this data serves as a wake-up call because there has been a political complacency about the state of our economy for too long.’

The latest household income figures, which have just been released, showed that average household income in 2022 was £74,568, which was 5% higher than in 2017, but 11.5% lower once inflation and other factors were taken into account.

The Guernsey Household Income Report also looked into the differences in income between parishes and between parents at the States’ schools and grant-aided colleges.

Some of the comparisons were weighted or ‘equivalised’ to take into account differences in household size and make-up.

Households in Torteval had the highest average income, at just over £89,000 a year, and households in St Sampson’s had the lowest, at slightly above £60,000 a year.

The highest-earning households with school-age children were found at the Ladies’ College, with average annual income of nearly £117,000 if their children were between Reception and Year 6, and just over £102,000 at secondary level.

Among States schools providing primary education, households with children attending Le Rondin and Amherst had the lowest average annual income, at about £36,000 and £45,000 respectively, while households with children at Notre Dame du Rosaire had the highest average annual income, at nearly £68,000.

The report also looked into the distribution of wealth in the island.

It stated that the least affluent half of households had 27% of total income, while the most affluent 5% of households had 18% of total income.

But it claimed that the island was more equal in 2022 than in 2017, with the Gini coefficient, which is used internationally to measure inequality, falling from 0.37 to 0.34, compared to 0.35 in the UK.