Your Island Pension (YIP) is an easy, simple and affordable workplace pension.
"Secondary Pensions is transformative for how people save for their retirement in Guernsey & Alderney. YIP will ensure that local employees get access to a good quality pension scheme delivered by local providers. Our aim is to make it as easy as possible, for as many as possible."
Sean Gillease
Managing Director,
Sovereign Pension Services
The good news is that with medical innovation and a better quality of life, we are all living a lot longer. Did you know that ‘Generation Z’ (people born between 1997 and 2012) could live until they are 100 years old?!
Therefore it is really important to save as early as possible, as much as you can, to give yourself the best possible retirement. It may seem a long way away, but if you start paying in from when you are just starting your working life, it super charges your pension.
It is never too early or too late to start paying in. Even if you are nearer to the middle to end of your career, having some pension is better than nothing and you benefit from tax- efficient savings and employer contributions, so it all helps.
Guernsey is following other countries who are being proactive in reducing the threat of pensioner poverty by putting in Secondary Pensions regulation. It has proven very successful in the UK and Australia. At the current time 60% of our working population are not saving for their retirement, so that means people are really going to struggle in the future.
Secondary Pensions is important to help address this and it’s also really good for the population, as we all want to have a good retirement after working so hard!
Your employer is legally required to enrol “designated employees”, and voluntary employees who opt-in.
Designated employees, are:
- Aged between 16 and State Pension Age
- Resident in Guernsey, Herm, Jethou or Alderney
- Likely to be earning above the Lower Earnings Limit
- Not in full time education If you are a voluntary employee under the age of 75 you can request to be enrolled, and your employer will need to enrol you.
You can opt-out at any point. However your employer will need to re-enrol you every three years if you remain as their employee, you will also miss out on the employer contributions. Self-Employed and Non-Employed individuals can also join YIP on a voluntary basis.
Minimum contribution rates are set out in the Secondary Pensions law.
- Employer contribution rates start from 1.00% in 2024 and increase to 3.50% by year 2032.
- Employee contributions start at 1.00% in 2024 and increase to 6.50% by year 2032.
- This makes a total combined contribution rate of 10.00% from 2032 onwards.
| 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | |
| Employer | 1% | 1% | 1% | 2% | 2% | 3% | 3% | 3% | 3.5% |
| Employee | 1% | 1% | 1.5% | 2% | 3% | 4% | 5% | 6% | 6.5% |
| Overall | 2% | 2% | 2.5% | 4% | 5% | 7% | 8% | 9% | 10% |
Contributions are based on total qualifying earnings, as opposed to just salary.
It is important to save as much as you can, when you can. The more you put in over the years, the better the outcome will be. There will be different times in your life when you will be able to pay more than the minimum. Even an additional 2% will make a difference and as it is directly from payroll you won’t feel it as much. Therefore, think about how much you can afford for the year, then review every year or when your circumstances change.
Members of YIP gain access to investment funds at preferential rates and with no minimum entry level. We don’t expect you to be an investment expert, so you can choose how involved you want to be.
Invest for me – My Future Life Strategy
This is for members who do not wish to make a choice. YIP will do it all for you and the strategy will be based on your age and your time to retirement. It will automatically de-risk as you get closer to your retirement age.
Let me invest – My Future Self-Select Range
There will be members who wish to have some flexibility and make a pro-active choice from the My Future Self-Select Fund Range.
Members can also mix and match. You may want to use My Future Life Strategy for your employer contribution and the My Future Self-Select range for your employee contribution.
The performance of these funds will be monitored by a specialist local third-party, with regular reports provided to the Trustees.
YIP allows individuals to make cost-efficient savings for their retirement, which will help improve financial resilience for many people. Finances are a leading stress factor for people. That is why YIP provides members with access to an award-winning Financial Wellness portal that is private and confidential to you as a member.
- If you want help with budgeting, there are tools and content to help you.
- If you want to save for a deposit on a house or flat, or a wedding or your children’s university education there are tools and content to help you save for your goals.
- Have you ever wondered about your approach to money? The financial wellness portal can help you understand your money personality and why you do what you do.
- People digest content in different ways, so there are quizzes, interactive courses and articles on a wide range of subjects. The information is provided for different levels of knowledge from beginner up to advanced.
It’s a very useful, additional benefit, that’s there to help.
The good news is that you don’t need to do much. Your employer will do it for you.
You will be automatically enrolled into YIP unless you opt out.
You will receive a Welcome email with a request to register your YIP Member Account. You can then access your Account via the Member Self-Service Portal and update your:
- Beneficiaries (the people who will receive your pension pot value when you die).
- Your residential address.
- Your personal details.
If you have any pension pots elsewhere on the island from other employers, or something you set up yourself then you can move them to YIP, so you keep everything in one place. It’s then nice and easy to manage and nothing is overlooked.
If you are a Self-Employed or Non-Employed individual you will need to apply to join YIP, so please contact yip@sovereigngroup.com and the relevant forms for completion will be provided.
If you want to know more, there is a lot more information on the yip.gg website.