Could we save with the States?

MANY congratulations to whosoever it is who is achieving a 7.4% return on our States money. One assumes this is invested safely.

This emphasises the importance of putting a stop to spending our reserves in order to make up revenue shortfall. Is this a notional valuation or cash in the bank?

If the latter, I am sure many of us would be delighted to receive 5 or 6% and wonder if a way can be found for a fund to be set up by the States Treasury on our behalf to manage some of our personal savings. It would need to be fairly short term, not more than say four years.

The States coffers (our money) could benefit from such a scheme and in addition we would be paying more income tax than at present. Is such an idea worthy of consideration?

J. GEERING,

St Martin's.

Editor's footnote: Deputy Gavin St Pier, minister of the Treasury and Resources Department, responds: 'I am grateful to you for the opportunity to respond to your reader's letter in respect of the States' investment returns and the possibility of establishing a fund to manage islanders' personal savings.

While the Treasury and Resources Department does not have any immediate plans to establish a savings fund for islanders along the lines suggested by your reader, the broader question of savings is one that is being considered as part of the Personal Tax, Pensions and Benefits Review being conducted jointly with the Social Security Department.

One of the issues highlighted by the review in its initial public consultation was that the basic States pension paid in retirement is equal to about 39% of average individual earnings. On its own, it does not provide for more than a basic lifestyle. Therefore, there is a need to shift our personal income from our active years to our old age by saving more in order to smooth income over our lifetimes. With life expectancy increasing, one of the many issues therefore being considered by the review includes how to encourage people to save to meet their income needs during retirement.

One of the options floated as part of the review's public consultation exercise was the possibility of establishing a secondary voluntary pension scheme administered by the Social Security Department to help encourage islanders to make better provision for their retirement. The possibility of a secondary pension scheme is actively being explored by the departments and, in the event that it does come to fruition, it could of course benefit from the same investment arrangements as the rest of the funds invested by the States.'