Islands facing 'demographic ticking time bomb'

The Channel Islands could raise a combined total of more than £150m each year in tax by improving workforce participation and addressing an ageing population, according to a new report.

The PwC report highlighted how boosting employment rates within the islands' existing population could help improve the economies by about £700m.

It warned of an escalating skills shortage emphasised by ageing populations and low birth rates if action was not taken.

Leyla Yildirim, chief strategy officer for PwC Channel Islands, said it was of "critical importance to focus on workforce participation if the islands are to avert a demographic ticking time bomb".

The analysis compares the Channel Islands with New Zealand, which it said was a leader in workforce inclusion.

It said achieving employment rates similar to New Zealand could increase the Channel Islands' workforce by an additional 7,500 employees.

Guernsey had the potential to raise more in tax than Jersey as there were more people not in the workforce than could be.

The report said employment rates reflected "high rates of early retirement and the extent to which women either delay returning or go back to work part-time after having children".

To combat the issue, it was suggested governments could make childcare more affordable and enhance education provisions.

It added employers could make jobs more flexible and embrace an older workforce while islanders could adopt a mindset of lifelong learning.

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