New Policy Brief on cost of living

The Policy Centre has published a Policy Brief on the cost of living in Jersey, highlighting growing public concern and outlining the key drivers behind high prices — particularly in housing, food, and transport.

The report, draws on a survey of 1,000 residents in January 2025 which revealed that 64% of Islanders now identify cost of living as the most important issue facing Jersey, rising to 82% among single parents. Families with dependent children and those aged 35 to 54 are especially affected.

“The real issue is not just high prices, but people’s ability to meet them,” the report notes. “Real earnings have not increased since the beginning of the century — and have actually fallen by 3.3% since 2020.”

Housing Dominates Household Budgets

Housing is the single greatest driver of cost pressures:

• The average house price in Jersey is £569,000, on par with London and 50% higher than in the South East of England.
• Housing was the most important issue for 17-34 age group and significantly more important than for other age groups.
• Rent or mortgage payments account for over one-third of household expenditure for many groups.
• Those owning outright and those whose rents are fully met by income support are in better position than those who have bought recently or who are paying a market rent.

Food and Groceries: Low-Income Households Pay Most

The brief reports that:

• Groceries are on average 14% more expensive than in the UK.
• Jersey lacks discount retailers which are common in the UK, meaning low-income households can pay up to 49% more than their UK counterparts.
• The Competition Authority found no evidence of profiteering, attributing higher prices to the small size of Jersey’s market, freight, labour, and tax differences.

Policy on Housing creates a restriction on supply

The report comments that “The high cost of housing in Jersey is a direct consequence of political decisions which have restricted supply,” It quotes the findings of Jersey’s Fiscal Policy Panel:

• Environmental restrictions in Jersey present hard limits to development.
• Development is restricted outside of the built-up area, which covers 12% of the Island. These restrictions are justified by conservation but represent a constraint on the amount of new housing supply that can be generated.
• The planning system can also create barriers to new housing supply.
• Features of the system, such as third-party appeals and delays in reaching decisions on major applications, create uncertainty over outcomes and act as barriers to bringing new supply forward.

Recommendations and Outlook

The report considers possible measures to reduce the cost of living -

• A renewed focus on increasing housing supply
• An exploration into ways to enable low-cost retail entry into the market.
• The reviewing of regulatory barriers that raise consumer prices, such as the case for taxis.

While the brief acknowledges that Jersey’s average income levels are 51% higher than the UK before housing costs, it stresses that rising costs continue to erode living standards for many.

Policy Centre’s Senior Adviser Sir Mark Boleat said,

“There is ample evidence on why the cost of living is higher in Jersey than the UK, but tackling the problem is not easy.

The obvious sector where the cost of living can be reduced is housing, which requires policies that increase the supply of housing rather than frustrate it through the planning system. A second sector is retailing, specifically by actions to encourage low-cost retailing.”

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