Why it feels expensive to live in Guernsey: households face growing real income decline and erosion of purchasing power, survey reveals
- Mean household income fell 12% in real terms to £77,619 per year despite 12% nominal increase since 2018-2019, with expenditure down 6% in real terms to £67,411 annually
- Private market renters saw housing costs rise to 26% of gross income from 22%, whilst affordable market renters face highest burden at 33%, unchanged from previous survey
- Single-parent households spend 33% of income on housing and have total expenditure of £49,026 against gross income of £43,918, with 24% reporting great difficulty making ends meet
- Some 41% of households have no savings or less than one month's income saved, whilst 87% of online expenditure flows to suppliers outside the Bailiwick
- People with disabilities saw shopping accessibility decline sharply, with 17% finding it very or quite inaccessible compared to 9% in 2018-2019, whilst private renters have notably worse home insulation at 86% coverage versus 97-98% for owner occupiers
Key terms
Households in Guernsey are experiencing a significant decline in purchasing power despite nominal income increases, with real incomes falling 12% since 2018-2019 and 13% since 2012-2013 after adjusting for inflation, according to the 2023-2024 Household Expenditure Survey.
The survey, conducted between October 2023 and December 2024, found that mean gross household income stood at £77,619 per year, or £1,493 per week. While this represents a 12% increase in nominal terms compared to 2018-2019, the real-terms decline highlights the severe impact of inflation on island residents.
Mean household expenditure reached £67,411 per year, 19% higher than 2018-2019 nominally but 6% lower in real terms. Compared to 2012-2013, expenditure rose 27% nominally but fell 9% in real terms.
Core housing expenditure averaged £11,200 per year, representing 14% of gross household income. However, this figure masks significant variation across different housing tenures.
Affordable market renters and partial owners face the highest burden, with core housing costs consuming 33% of gross income, unchanged from 2018-2019. Private market renters saw their housing cost burden increase from 22% to 26% of gross income over the same period. Owner occupiers with mortgages dedicate 20% of gross income to core housing costs, up from 19%, whilst those without mortgages spend just 2%, up from 1%.
The affordable market sector experienced a 14 percentage point increase in housing costs as a proportion of income since 2012-2013. The report attributed this change to the 2018 welfare reform, stating: "This is likely linked to changes in 2018, when the Rent Rebate Scheme for social housing tenants was abolished and replaced by the Income Support Scheme."
When additional housing-related costs such as utilities and improvements are included, households spend an average of £10,148 per year beyond core housing expenses.
Housing, fuel and power expenditure showed the most significant change of any category, increasing 59% nominally and 19% in real terms since 2018-2019, making it joint-largest expenditure group alongside capital investments at 15% of total spending each.
After deducting income tax and social insurance, estimated at 17% of gross income, and adding other funding sources including savings and loans, households had £69,067 per year available for expenditure.
Single-parent households emerged as particularly vulnerable. Those consisting of one adult aged 16-64 with one or more children aged 15 or under spend 33% of gross income on core housing costs. With total expenditure of £49,026 against gross income of just £43,918, these households are spending more than they earn. A quarter of single parents reported making ends meet with "great difficulty".
Across all households, 68% reported managing financially "easily" or "fairly easily", whilst 11% struggled "with difficulty" or "with great difficulty". Groups most likely to report difficulty included affordable market housing tenures and single-parent households.
Financial security remains precarious for many residents. Some 41% of households have no savings or less than one month's income saved, whilst 24% have between one and six months' income saved. Only 34% have more than six months' income in savings, with savings levels strongly correlated with age.
Regarding non-mortgage debt among adults aged 18 and over, 87% carry no such debt, whilst 8% have debts up to £5,000, 4% owe between £5,000 and £20,000, and 1% carry debts exceeding £20,000. Lower-income households were more likely to carry debt.
Transport represented 11% of total expenditure at £7,423 per year, with air fares within the Channel Islands and UK the highest single item at £1,149 annually. Recreation and culture accounted for 10% of spending at £7,031 per year, with package holidays outside the Channel Islands and UK the largest component at £1,917 annually.
The survey revealed that £14,957, or 22% of total expenditure, goes to suppliers outside the Bailiwick. Online orders account for £8,474, or 13% of spending, whether from local or external suppliers.
Of all expenditure, 76% or £51,380 is spent within the Bailiwick through non-online channels. A further 11% or £7,556 goes to suppliers outside the Bailiwick through traditional channels, whilst 2% or £1,074 is spent online with local suppliers. The remaining 11% or £7,401 represents online spending with external suppliers.
Of all online expenditure, 87% flows to suppliers outside the Bailiwick, highlighting the impact of e-commerce on the local economy.
Income inequality is reflected in expenditure patterns. The lowest income quintile has a mean gross income of £26,914 but expenditure of £40,724, indicating reliance on savings, benefits or borrowing. The highest quintile earns £196,554 and spends £121,025.
Expenditure as a percentage of gross income varies by tenure: owner occupiers with mortgages spend 86%, private market renters 85%, owner occupiers without mortgages 87%, and affordable market renters and partial owners 91%.
People with disabilities face mounting challenges. Some 17% of people with a disability or long-term illness limiting activities found shopping "very" or "quite" inaccessible, up from 9% in 2018-2019. By contrast, just 3% of those without disabilities found shopping inaccessible, stable from 2% in 2018-2019.
Among 466 comments on accessibility improvements, 23% wanted a wider product range or different shops, 18% sought improved physical accessibility including ramps, wider doors and smoother surfaces, 13% wanted better parking closer to shops, 9% cited cost as an accessibility barrier, 7% wanted more home delivery options, and 6% sought longer opening hours.
Households with disabled members spent £55,140 annually compared to £71,655 for those without. They allocated a higher proportion to health expenditure at 5% versus 3%, but lower proportions to recreation at 9% versus 11%, restaurants at 5% versus 7%, and transport at 10% versus 11%.
Housing characteristics revealed disparities by tenure. Whilst 95% of all households have at least one form of insulation, including wall insulation, roof insulation, or double or triple glazing, private renters lag significantly. Owner occupiers achieve 97-98% coverage, affordable market properties reach 97%, but private rental properties manage only 86%.
Some 38% of households reported someone working from home, with prevalence correlated to the number of adults aged 16-64 in the household and less common in households with children.
Home food production occurs in 32% of households, with residents keeping chickens or growing vegetables and fruit. Among owner occupiers without mortgages, 43% produce some food, compared to 34% of those with mortgages and just 15% each of private renters and affordable renters.
Time spent in town or the Bridge area, excluding work time, showed 9% of people spent no time there weekly, 40% spent less than one hour, 45% spent between one and six hours, and 6% spent six hours or more. Home-makers were most likely to spend six or more hours, whilst retired people were least likely. Women were more likely than men to spend over one hour, and those with limiting disabilities were more likely to spend no time in town.
Real-terms changes in expenditure categories since 2018-2019 showed health spending up 35%, housing, fuel and power up 19%, and transport up 1%. However, recreation and culture fell 16% and other items recorded dropped 20%.
Comparing with 2012-2013, education spending rose 39% in real terms, but alcoholic drinks and tobacco fell 33%, clothing dropped 18%, recreation and culture declined 20%, and food decreased 6%.
Core housing costs as a percentage of gross income by household composition showed single adults aged 65 or over spending 13%, up three percentage points from 2018-2019 and 10 points from 2012-2013. Two adults aged 65 or over spent 2%, down one point from 2018-2019. Two adults aged 16-64 spent 17%, up three points from 2018-2019. Single parents spent 33%, up two points, whilst two-parent households spent 23%, up four points.
Total expenditure by composition ranged from £33,300 for one adult aged 65 or over to £96,744 for households with three or four adults all aged 16-64.
The survey involved 876 households comprising 2,082 individuals. Originally planned for 12 months, it ran for 15 months from October 2023 to December 2024, falling short of the 1,000-household target. The achieved sample provides a 95% confidence level with a confidence interval of ±3.25%.
Response rates proved challenging. Just 9% of contacted addresses agreed to participate, representing 23% of those reached on the doorstep. Some 41% declined to participate, 45% could not be contacted, and 5% of addresses appeared vacant.
Contactability deteriorated significantly compared to 2018-2019, when 19% could not be reached, rising to 45% in this survey. Agreement rates among those contacted also fell from 31% in 2018-2019 to 23% in the latest survey.
Data was weighted by household income and composition, whilst individual responses were weighted by age and sex. The sample achieved a good match to the population profile by tenure.
The report cautioned: "It should be noted that, while every effort is taken to ensure the survey sample is as representative as possible of the Guernsey population each time, differences in the profile of survey respondents from one survey to the next inevitably influence the changes in the overall averages as well in addition to changes due to actual changes in spending patterns."
The project cost £246,500, compared to £180,200 for the 2018-2019 survey, covering temporary staff, incentives, IT and printing. An additional estimated 2,000 hours of permanent staff time was funded through the regular Data and Analysis Service budget across 2023-2026.
Q&A
Q: What is the mean household income in Guernsey and how has it changed in real terms?
A: Mean gross household income is £77,619 per year or £1,493 per week. Whilst this represents a 12% increase in nominal terms since 2018-2019, real income has fallen 12% after adjusting for inflation. Compared to 2012-2013, nominal income is up 21% but real income is down 13%.
Q: Which groups face the highest housing cost burdens?
A: Affordable market renters and partial owners face the highest burden at 33% of gross income. Private market renters spend 26% of gross income on core housing costs, up from 22% in 2018-2019. Owner occupiers with mortgages spend 20%, whilst those without mortgages spend just 2%. Single-parent households also spend 33% of gross income on core housing costs.
Q: How much household spending goes outside the Bailiwick?
A: Some £14,957 or 22% of total household expenditure goes to suppliers outside the Bailiwick. Online orders account for £8,474 or 13% of spending. Crucially, of all online expenditure, 87% flows to suppliers outside the Bailiwick, amounting to £7,401 per household per year.
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