More than half of the island’s renters – roughly 4,700 households – are struggling to get by each month, according to a new States’ survey.
While fewer than a third of the island’s households rent, they’re among the worst off – with 55% saying they struggle to make ends meet each month.
That figure skyrockets to more than 75% for people in States housing and Guernsey Housing Association properties.
For thousands of islanders, ‘getting by’ now means living pay cheque to pay cheque with virtually no financial safety net.
Financial pressure
Data from the 2023–2024 Household Expenditure Survey shows that renters are facing some of the toughest financial pressures.
Financial pressure is most severe among those renting through States Housing or the Guernsey Housing Association (GHA).
A staggering 76% say they have some difficulty making ends meet, with 41% in severe hardship.
The average household income for people in GHA and States Housing is £43,103 a year – nearly 44% less than private market renters, who average £76,364.
However, with private rents being significantly more (£19,854 a year on average compared to £13,833 in social housing), their higher earnings no longer provide the same cushion they once did.
More than 44% of private tenants say they have at least “some difficulty” getting by financially, with 13% experiencing severe hardship getting through the month.
Covid shrinks spending
The surge in living costs since the last survey in 2018–2019 has fundamentally reshaped how islanders spend their money, driven in part by post-pandemic economic shifts.
While overall household spending rose 19% in cash terms to more than £67,400 a year, inflation meant islanders actually bought 6% fewer things.
Real gross incomes dropped 12% over the same period, stripping away disposable cash.
Instead of checkouts and high streets, extra cash was swallowed by essential household bills:
- Housing, fuel and power saw the largest increase of any category, skyrocketing 59% in cash terms (£3,700 more per year per household)
- Core housing costs (rent, property tax, and rates) now consume 33% of gross income for social renters and 26% for private market renters – up from 22% before the pandemic
- When heat, light, and power are added, total housing costs swallow 39% of a private renter’s total budget and 44% of a social renter’s budget
On top of this, private renters face an added energy penalty, with 14% living in homes with no insulation or double glazing, compared to just 3% of social housing properties.
Out-of-date GST modelling?
These structural shifts raise fundamental questions about the financial assumptions behind the States’ proposed tax reforms and GST.
While Policy and Resources (P&R) has refused to publish its GST modelling or share it with deputies, Express understands it is based on the 2018-2019 Household Expenditure Survey.
However, the latest report shows that post-pandemic inflation has radically altered how the island spends its cash – leaving questions over how accurate P&R’s models are.
If islanders are buying 6% less than before the pandemic and spending more of their income on rent, mortgages and rates, it could mean civil servants’ spreadsheets are wrong.
P&R has predicted GST will bring in about £50m and increase inflation by 1.9% – but those figures were based on the pre-pandemic survey, when our spending patterns were very different.
Overstated GST revenue?
It’s a criticism P&R has been facing for weeks, with Deputy David Goy previously calling the committee’s figures “wildly optimistic“, adding that they “do not reflect real-world conditions”.
After the release of the latest survey, Deputy Rob Curgenven told Express: “Earlier this month, P&R were very keen for deputies to nod through GST – now we know why.
“The 8-year-old, pre-pandemic data they relied on to estimate revenue didn’t reflect how people were actually spending money today, overstating estimated revenue.”
It’s a question others will be asking too: If squeezed households are redirecting their limited earnings into non-taxable essentials, could P&R have overestimated the amount of GST that will be collected?
And if GST pushes up inflation, will this further squeeze households whose rents are linked to the Retail Prices Index (RPIX)?
As the States prepares for the next round of the tax debate, these new survey figures pose an urgent question: are Guernsey’s proposed tax models built on a pre-COVID spending reality that no longer exists?
