THE daughter of a 92-year-old priest who is paying interest on a
loan agreed with the Church of England Pensions Board at 8.6 per
cent - more than twice the cur-rent average - has questioned the
morality of the scheme.
In 1985, the Revd Eric Quin took out a shared-equity loan in
order to purchase a three-bedroom cottage in Cheshire for £45,750.
With his wife, he paid £20,750 to put down a 45-per-cent deposit.
The Pensions Board paid the remainder, £26,500, on the
understanding that it would be entitled to 55 per cent of the final
The initial interest rate was three per cent - much lower than
the 12-per-cent mortgage rate at the time. This rate was gradually
increased in line with the pensions of all the fund's members. Mr
Quin is now paying interest at a rate of 8.6 per cent. The property
has risen in value to £200,000.
Although the family now stand to gain £90,000 if the property is
sold, they will have paid an estimated £50,000 in interest, in
addition to the £20,750 deposit, leaving them with a profit of
£19,250 (21 per cent). The Pensions Board, on the other hand, will
have made a profit of £84,500 - 319 per cent.
As advised by the Pensions Board, Mr Quin took legal advice
before agreeing to the loan.
Last month, Mr Quin's daughter, Rosemary Lea, who originally
expressed her concerns in an interview with the Daily
Mail, said that she had been "horrified" to learn of the terms
of the loan, which she discovered after being given power of
attorney 18 months ago. "I'm sure it's legal, but it is immoral and
She also criticised the lack of communication from the Pensions
Board. "If there had been a letter every year, a statement, then as
a family he could have paid off the loan and equity . . . We could
have got together and sorted that out."
The shared-equity scheme, which opened in January 1983, was
closed in 2008 in response to changes in the tax rules which would
have extended the potential tax liability on "beneficial loans" in
a way that could have affected retired clergy.
Mrs Lea believes that the 970 households still in the scheme are
"a forgotten band of people". Those administering the scheme had
been "very slow to respond" to her first enquiries, before claiming
that a reply had accidentally not been posted. She and her sister
went to the Daily Mail, after warning the Pensions Board
that they would feel it necessary to make their story public unless
they were able to see their father's file or to obtain "some
satisfaction about the paperwork". Two months passed with no
On Wednesday, a spokesperson for the Board said: "We have
written to Mrs Lea on a number of occasions, providing copies of
the relevant papers as requested; it is not clear what further
'satisfaction about the paperwork' Mrs Lea is seeking but we would
be pleased to discuss that with her."
On Tuesday, Bernadette Kenny, the chief executive of the
Pensions Board, said that the scheme had been introduced in order
to enable clergy nearing retirement to obtain a mortgage in
recognition of the fact that they were unlikely to be able to get a
"We were trying to protect these clergy, as far as possible,
from the effects of the then-prevailing interest rates," she said.
"This was a period when rates were changing every month, and could
be as high as almost 16 per cent. . . We wanted to give them
certainty about how much interest they would be paying every
The rate of interest was set by reference to the increase in
clergy pensions, broadly in line with the Retail Price Index. Miss
Kenny calculates roughly that those clergy who joined the scheme in
the mid-1980s have paid, on average, interest at six per cent over
the lifetime of the loan, which is slightly lower than the average
base rate. "At certain points they would have been paying very
significantly below the prevailing rate," she said.
Since the publication of Mr Quin's story in the Daily
Mail, other retired clergy have expressed concerns about the
cost of housing, and, in particular, the interest rates set by the
The Board currently helps 2600 retired clergy and their
dependants, mostly through its rental scheme, which covers 1200
households. A consultation was launched last year to address what
the Board described as the "inequities" of this scheme. It does
not, however, address the shared-equity scheme joined by Mr Quin,
or the shared-ownership scheme that succeeded it in 2008: these
will be considered at a later date, the Board says.
On Tuesday, Miss Kenny said that the extent to which it would be
possible to change the shared-equity scheme, which was "based on
mutual legal obligations", was "limited". The Pensions Board would,
however, start to issue mortgage-style statements later this
The results of the consultation and the Board's response will be
published at the General Synod in York in July.