The average household spent 6% less and suffered a 12% decline in income, after adjusting for inflation, over a five-year period ending in 2024.
Household expenditure was 9% lower in real terms than it had been a decade earlier and income decreased by 13% in real terms over the same period.
The latest official report on spending trends – known as the household expenditure survey – was based on information about the goods and services purchased by more than 2,000 people who live in Guernsey to find out the average cost of living in the island.
Citizens Advice was not surprised that the survey showed that real household incomes were falling significantly once inflation was taken into account.
‘What matters is what households have left after paying for essentials, and the issue we’re seeing is that there isn’t any more to pinch,’ said chief executive Ali Marquis.
‘There’s no more money to go around. People are squeezing from every possible budget. So many households are literally at their limits.
‘Even though many households are seeing wage increases, they are also seeing that their actual cost of living is higher, so it’s just not adding up really, and that’s the hardest thing.’
About a third of respondents to the survey reported a degree of difficulty making ends meet.
Mrs Marquis believed that cost-of-living pressures had probably brought even more people into that category since the survey results were collected.
‘The figures are from a couple of years ago and I think things have got even worse since then,’ she said.
‘We are talking not only about people who are on pensions or reliant only on benefits – we’re talking about people who are out working who just can’t make ends meet.
‘The survey is pretty representative of what we’re seeing. We have people who are desperately trying to make ends meet and what’s really difficult is that they don’t want to go and claim benefits or come forward to say that they’re struggling.’
Politicians were also unsurprised by the survey and feared the cost-of-living crisis would not be alleviated until there was a material increase in the supply of housing. The survey showed that housing was consuming more of the gross income and expenditure of households in the private rental sector and owner-occupiers, both with and without mortgages.
‘I’m not surprised by these figures at all. It’s what people have known for years,’ said Deputy Ross Le Brun.
‘The survey shows housing is taking up a much bigger share of household budgets than it was a few years ago. That’s the area where we can make the biggest difference locally.’
Deputy Marc Leadbeater believed it could take a 10-year housebuilding problem to get on top of the cost-of-living crisis.
‘The feedback I hear is that most household budgets have been squeezed, and evenings out and holidays are the first things to have been cut,' he said.
'I get no sense that household budgets are now easing at all.
'The fear and uncertainty surrounding the current tax reform process, volatility with fuel and energy prices, and seemingly ever-increasing rental costs are worrying factors to many.’
The survey also asked questions about savings and non-mortgage debt for the first time.
41% of respondents reported having either no savings or less than one month’s worth of income in savings.
‘We are seeing people who are struggling to pay their general housing bills, utilities, food and other unavoidable expenses, and then suddenly something comes along like an illness, or a car or washing machine breaks down, and they have no extra money for these things,’ said Mrs Marquis.
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