THE “perfect storm” facing the Church of England Pensions Board because it seeks to fund retirement housing ought to be addressed by drawing on the Church Commissioners’ assets, two clergy bodies argued this week.
The Pensions Board’s “Enabling Choice” consultation warns that the present provision — the CHARM scheme, which enables clergy to rent a property from the Board — has turn into unsustainable (News, 17 November 2023, 24 November 2023). Its chair, Clive Mather, has referred to a dramatic rise in costs through inflation and rates of interest. Demand was said to be “unprecedented” last 12 months (Features, 28 July 2023, News, 13 October 2023).
In its response to the consultation, which ended on Wednesday, the Retired Clergy Association of the Church of England and the Church of England Employee and Clergy Advocates, a part of the Faith Workers Branch of Unite, write that the Board’s proposals “represent a radical break within the covenant of care between the Church of England and its clergy as to how they might be supported in retirement . . . bringing fresh uncertainty and anxiety to those clergy who haven’t any other viable technique of securing housing in retirement, and fuelling the broader perception amongst clergy that their ministry is not any longer understood or valued by the institutional Church”.
They suggest that the Commissioners “invest through the Pensions Board in the supply of rented housing and likewise enable the Pensions Board to discharge the present debts it holds in order that it may possibly fully fund the long run purchases of retirement properties”.
“The Pensions Board shouldn’t be seen to be the church body of last resort,” it says. “Adequate pensions for retired clergy should be seen to be the responsibility of the entire church and a part of the general employment package. . . Enabling clergy to make their very own decisions shouldn’t be seen to be an abdication of others’ responsibility.”
Until 2010, funding for the Pensions Board’s retirement housing was loaned from the Church Commissioners. When that arrangement modified, the Board needed to borrow the funds on industrial terms from other lenders to purchase properties. Currently, 75 per cent of the income that the Board secures from rents goes to servicing debt.
During Questions on the General Synod last November, the First Church Estates Commissioner, Alan Smith, was asked whether it will be “more ethical and profitable for the properties to turn into a part of the investment policy of the Church of England Commissioners”. His response was that any investment made by the Commissioners “must be considered within the context of our investment strategy, and making an allowance for our return goal (CPIH+4 per cent), risk profile and a spread of other portfolio metrics including overall existing fund composition”.
Investment in CHARM housing had been “reducing as a part of a method to scale back the Commissioners’ investment focus from over-exposure to the UK residential property market”.
The joint response to Enabling Choice lists an array of challenges facing the clergy, including: “Clergy stipends trailing behind secular pay settlements”, the introduction of a compulsory retirement date, and a rise within the retirement age. Beyond the Church, it notes a “housing crisis”, through which social-housing provision has been “undermined”, and mortgages have turn into “harder to acquire, with the multiplier on income increasing significantly within the last 25 years”.
In the private-rental market, there’s “little hope of securing an assured lifetime tenancy — which the Pensions Board provides”, it warns. “Private sector rentals are inclined to be relatively short term and subject to uncontrollable rent rises. Also, the sector is diminishing as landlords are having difficulty servicing their buy-to-let loans.”
A key advice of Enabling Choice is that clergy are offered advice about retirement planning earlier of their ministry. The joint response argues that, “More than reviews and advice, extra money for stipends and pensions is required to deal with the issue.” It also raises questions on who inside dioceses might be offering such advice and points out that independent financial advice comes at a value. It also raises concerns about clergy spouses and dependants.
The response includes contributions from individuals.
One stipendiary minister of their mid-twenties wrote: “As far as we’re aware for the last five many years stipendiary clergy have been assured by church institutions and people accountable for their pastoral care that living in tied accommodation during service carried with it the promise of ‘being sorted in retirement’ in the supply of an assured rental tenancy in an area of their selection should they not have the ability to afford every other type of housing.
“The future lack of this promise and reliance on house purchase during ministry will inevitably result in clergy having less ability to maneuver across the country as needed in future years. Ability to buy property would require two incomes in a clergy household — this too might be unhelpful to clergy availability. Demand for rented property may also grow as more vocations come from social housing households.”
Concern about retirement provision was a theme of the Church’s recent study of clergy from working-class backgrounds (News, 5 October 2023).
Among the 4 principles set out within the Board’s consultation is “enabling home ownership during ministry, through overcoming barriers to level the playing field between clergy and their peers”. Proposals include partnership with mortgage providers to supply clergy a mortgage with a loan-to-value ratio of as much as 100 per cent.
The joint response describes this proposal as an “exciting one should it’s realistic”, but raises several questions, akin to whether the financial partners — unnamed — will proceed making the offer for long periods of time.
Referring to a give attention to offering properties in “cheaper parts of the country”, it warns that these could also be “removed from the social and support networks built up during ministry”.
The Pensions Board says that, currently, one in six of the retiring clergy needs help with retirement housing, however the joint response suggests a figure of between 20 and 25 per cent. It warns that the Board’s “safety net of rented housing goes to need to be larger than all of those pages envisage. What a couple of Churches Mutual Housing Association?”
It concludes: “The response will all the time be that there isn’t enough money, but that doesn’t overthrow the principles involved and people principles ought to be the guiding light in any reform.”
Response to the consultation ought to be made by Wednesday 31 January at: churchofengland.org/resources/clergy-resources/retirement-housing/enabling-choice
