By John Martin
As part of the ongoing rollout of Guernsey’s Secondary Pensions, all employers and employees should be aware of an important update coming into effect on 1 January 2026; an increase in the statutory minimum contribution rates. This change is a legal requirement under Guernsey law, meaning all employers and employees must ensure their pension contributions meet or exceed the new minimum levels from that date for each pay period. The change is designed to strengthen retirement savings over a phased period.
At BWCI, we’re committed to keeping our clients and members informed and supported, preparing them well in advance so they can understand how these updates may affect their pension arrangements.
How the new minimum contributions will affect employers/employees
The Secondary Pensions law officially commenced on 1 July 2024 for larger employers, with full implementation coming into effect from 1 October 2025, for employers with only one employee. By this date, all employers must ensure that their total pension contributions (combined employer and employee contributions) meet or exceed the new statutory minimum rates for each pay period.
Employers are legally required to set up an approbated pension scheme for their employees and pay contributions. From 1 January 2026, the minimum contribution rates will be 1% of relevant earnings for employers and 1.5% for employees (an increase of 0.5% for employees). This is shown in more detail on the table below:
What flexibility do employers/employees have?
Employers may choose to contribute more than the statutory minimum enabling employees to either not contribute or contribute at a reduced level. Contribution percentages when calculating statutory minima are applied to the same elements of remuneration on which social security contributions are paid, including basic salary, bonuses, overtime, commissions, and other relevant earnings, subject to the upper earnings limit for each pay period. However, employers can elect to do something different in certain circumstances.
How we can help
Navigating compliance with Guernsey Secondary Pension regulation can be complex. Our expert team is here to help you review your contribution structures, and ensure compliance ahead of 1 January 2026.
If you have any questions, or would like tailored guidance, contact our pensions consultancy team today. We’re here to make sure you and your employees are fully prepared.
If you want to find out more about our different pension products in the Bailiwick of Guernsey, you can speak to our experienced and trusted team on 728432 or email pensions@bwcigroup.com.