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Synod: New scheme for pensioners

18 July 2014

Retirement housing

Sam Atkins

Noted: Church Lads' and Girls' Brigade members from York and Chorley

Noted: Church Lads' and Girls' Brigade members from York and Chorley

A PRESENTATION about the review of CHARM (the Church's Housing Assistance for Retired Clergy) was given on Monday. The Chairman of the Church of England Pensions Board, Dr Jonathan Spencer, introduced the presentation. The changes being unveiled were the first since CHARM was established some 30 years previously, a scheme that currently cost £12 million a year, and covered 30 per cent of retiring clergy. The changes aimed to make CHARM fairer, and to give clergy more control over what happened on their retirement.

Alan Fletcher, who chairs the housing committee of the C of E Pensions Board, gave the Synod more details about the changes to CHARM which were being proposed. The existing scheme asked clergy 12 months from retirement to find a property they wanted to live in; the Church then bought it, and rented it back to the priest at a rate pegged to his or her income, not the property's value. "Sometimes this process does work well, [but] generally it creates a significant number of problems," he said. The new CHARM would instead create a pool of properties across the country which clergy, up to five years from retirement, could examine, and choose from, at rents set at around 60 per cent of the market value. Existing CHARM members would have their current rents gradually changed over several years to match the new target rents.

Dr Spencer said that about half of the £12-million cost of CHARM came from rents, and the rest from the Pensions Board and the Church - those proportions and figures would remain broadly the same.

Christine McMullen (Derby) asked whether the principles described in the presentation could be applied to small numbers of divorced clergy wives in their 80s and 90s who had accepted value-linked loans when interest rates were high? Some were still paying rent as they could not afford to buy the place they were living in.

Justin Brett (Chichester)was concerned about the move to rents based on the cost of housing as opposed to income. How could the Board offer choice while pegging its rents according to the property?

Mrs McMullen was told that that scheme had not been operated by the Pensions Board, but he would ask the dioceses to draw their conclusions about her recommendation.

In reply to Justin Brett, Mr Fletcher pointed out that the present arrangements were "not very satisfactory. We have had a number of complaints from retired clergy who find their rents are higher than market rents. We could say 'go and take a property at a lower rate in the private sector', but we thought that was not very helpful. So we would challenge the premise that the present system needs no attention."

The Bishop of Bath & Wells, the Rt Revd Peter Hancock, requested more information about the maintenance of property.

The Revd Stephen Trott (Peterborough) sugested that the Board look at things "more broadly", and consider negotiations with large financial institutions".

Canon Simon Taylor (Derby) said that his parents' experience of shared ownership was "less good". Would there be a continuing consultation of clergy to monitor the success of CHARM, and were there plans for consulting those in the shared-ownership scheme?

Dr Spencer, answering Mr Trott, said that the Pensions Board was concerned with provision of housing to clergy nearing retirement who had not got a foothold on the housing market; so the question was outside his scope. He said that the number using CHARM was much higher than those using the shared- equity scheme.

Mr Fletcher said that retaining the quality of the properties was a key objective. Establishing a pool of properties rather than constantly buying and selling would help keep them in a good state of repair.

Answering Dr Taylor, Mr Spencer said that there would be consultation through the bedding-in period of the new scheme.

Canon Elizabeth Renshaw (Chester) asked whether the Church's close relationship with Williams & Glyn's bank (which the Commissioners have a stake in) could lead to their offering better rates for loans than Santander.

The Revd Stephen Coles (London) asked for more detail on how the target rents would be calculated. Even subsidised rents would be unaffordable for some clergy in some very expensive areas.

The Bishop of Manchester, the Rt Revd David Walker, asked whether there would still be any available property in the CHARM pool by the time his generation of clergy retired.

Mr Fletcher said that the loan facility from Santander was "terrific", and much better than anything available from RBS, the parent bank of Williams & Glyn's. How the target rents were calculated was a complex question, he said, but it was based on the property value in 1999, and then increased with RPI inflation and some other factors.

Dr Spencer admitted that in some "hotspots" no property could be bought and added to the pool because it was too expensive; for instance, in London. That was already the case for the old CHARM scheme. The Pensions Board would make sure they did not exhaust their capacity when deciding how many new tenants to accept each year, ensuring that CHARM would continue to be available to at least some retiring clergy for the long term.

Mary Nagel (Chichester)said that many people in the south-east were "worried" that the cap would prevent their living in the region.

Ian Fletcher (West Yorkshire & the Dales) said some widows would want to move to another part of the country, which could be more difficult under the target-rent scheme.

Dr Spencersuggested that there was a trade-off between the cap and the number of properties that were affordable. The Board already owned properties in the south-east

When a partner or spouse died, the Board facilitated the move of the survivor. The change was that, when clergy were approaching retirement, they would talk to him or her, and if necessary the spouse, "about the whole range of possibilities". angements for retirement."

Target rents were "not a market rent, but a social housing rent".

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