The ‘live now, save later’ mantra that all generations go through in their 20s and early 30s may be running out of steam. The fact is that most of the world’s western governments cannot afford to keep paying pensions at their current levels, so counting on our States to provide for more than just basic necessities could be unrealistic.  However, when you’re young it’s natural to want to spend money on going out, meeting people, travelling, and possibly even putting money aside for a mortgage.  On top of all that, millennials and generation X-ers are often labelled as the poorest, most financially challenged generation of the modern era.

Of course, it’s easier to ignore the financial advice, and the condescending stuff about avocado brunches and frothy lattes.  But trust us, your 70-year-old self will thank the younger you if you get more engaged with finances earlier on.  And the good news is that the younger you start, the less you will have to put aside for a comfortable retirement.

Did you know there are tax advantages of saving in a pension?  If it’s a workplace pension your employer will often need to pay into it too, sometimes even matching your contribution. Essentially that’s free money.  If your workplace doesn’t offer a pension, or has one with not very favourable terms, then you should investigate a private pension.

Here at BWCI Pension Trustees Limited (BWCI) we are local pension specialists, and we can improve your relationship and knowledge about money, which should alleviate any financial worries you may have, but also get some savvy saving started. Technical language, jargon or information that is too difficult to understand often come up as reasons why many young people wait or don’t think about pension planning. To address this, we’ve put together some Q&As to help.  

Why do I need a pension?

When you cease to work you need income to meet your living expenses since you will not have a salary. Some income may come from the States of Guernsey old age pension but you may not get the full amount and there is a question on the future financing of it.

Being a member of your employer’s pension scheme or having a personal pension may allow you to retire earlier than the pensionable age of the States of Guernsey.  This pensionable age is getting older, and if you were born after 1980 it is currently set for 70.

It is a no-brainer that having more income during retirement will mean a better lifestyle, such as foreign holidays, being able to pursue hobbies, and eating out and enjoying yourself with friends.

At what age should I start a pension?

The younger the better, due to the compounding effect of investment returns.  A small amount put into a pension on a regular basis when you are young should grow to a larger amount on retirement. It’s important to put a regular amount into a pension so that you get into the habit of saving. When you get a pay rise or bonus, think about putting an extra amount into the pension scheme.

The States of Guernsey wants to encourage you to save for retirement. Subject to limits, they will give you tax relief on your pension contributions so that, put simply, you have the choice of 80p now as income, or £1 in the pension scheme.  And don’t forget that £1 in a pension pot will be worth much more when you are 70.

How do I work out how much money I’ll need for retirement?

BWCI offers a pension projector for members of its pension schemes. This allows you to project what amount of income and lump sum option you might get on your retirement date. You can see the impact of paying in extra contributions, different investment returns and different retirement ages.

You can also see if you are going to achieve a certain level of income retirement. You could work out how much you need based on your current cost of living.  A recent survey was done in the UK on this;

They had 3 different retirement lifestyles: minimum, moderate and comfortable. They then calculated what level of income you need to have that lifestyle and amount you need in your pension account.  Costs are based on the UK. Guernsey has a higher cost of living so you probably need to save more for the same lifestyle in Guernsey.

To sum up, a pension should be a marathon not a sprint, and early planning will mean avoiding feeling financially stressed in the golden years.  Through no fault of their own, millennials and generation X-ers are often poorer than their parents were at similar ages.  Stagnating salaries, the housing crisis, student debt, and inflation, all mean that it’s a struggle to save.  Despite all that, we encourage young people not to shun saving for old age because the pressure’s off later if you start young.  Retirement should be the holiday of a lifetime, and an opportunity to see the world.

If you want to find out more about our different pension products in Guernsey, you can speak to our experienced and trusted team on 728432 or email

Trustee and Administration services are provided through BWCI Pension Trustees Limited, which is regulated and licensed by the Guernsey Financial Services Commission under The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2020.