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We can’t afford to save for house, clergy say

24 November 2023

Pensions Board weighs up mortgage options for clergy


PROPOSALS by the Pensions Board to enable clergy to buy property during their ministry received a sceptical response from retired clergy this week.

Last week, the Board published a discussion document: Enabling Choice: New choices to support clergy with retirement housing (News, 17 November). It warns that the current provision — the CHARM scheme that enables clergy to rent a property from the Board — requires “a huge and increasing investment from the Church and it is hard to imagine how this can continue as it is”, putting the annual cost at £20 million a year. This does not include, it says, the funds required to decarbonise the housing portfolio to meet the Church’s 2030 net-zero target.

While the document offers ideas rather than concrete proposals, it does list four elements considered “essential” to the future offering. These include “enabling home ownership during ministry, through overcoming barriers to level the playing field between clergy and their peers”.

Among the ideas are the donation of a lump sum of up to £1000 as a “kick-start to saving” at ordination, and the Church’s partnering with a bank or building society to offer clergy access to a 95- or 100-per-cent mortgage, for which the Church provides part of the property value as security. Another option would be for the Church to offer a means-tested contribution of up to £25,000 towards a deposit.

The document acknowledges that some retiring clergy will still require a Church-provided home in retirement, but suggests ways to restrict this, from smaller homes to increasing the minimum length of service required to qualify for subsidised Church housing, including for those who retire early on health grounds.

Currently, about 60 per cent of serving stipendiary clergy own property, and, of the 40 per cent who do not, about half will need help with retirement housing. The document says that, in future, stipendiary clergy may be less likely to own property when they reach retirement, given factors including rising property prices, the difficulty of saving, increased household costs, and the rise in vocations among young people with no former career and earnings.

On Tuesday, the Revd Eva McIntyre, who chairs CHARMERS, an independent fellowship of residents in CHARM houses and supported housing, said: “The proposals are presented in the positive light of ‘choice’; yet they are really the result of appalling underfunding and the Pension Board having to cut their provision.

“The idea that clergy living on a stipend can save for a deposit and buy a house in the current housing climate is completely unrealistic.”

The membership secretary of CHARMERS, the Revd David Phypers, agreed that the proposals “stem from chronic underfunding from the Church Commissioners. Strange, when their reserves are higher than ever.” They “undermine the basic employment contract for all clergy to provide housing for life”, he said. “On current stipends, clergy, particularly with families, will not be able to save for house purchase on retirement.”

An option not offered in the discussion document is that the Church Commissioners invest in the provision of rented housing. The proposal was set out in a resolution passed with just one abstention by Attercliffe deanery synod, in the diocese of Sheffield, on 9 November. The resolution states that the investment “should be sufficient to discharge the current debt held by the Pension Board in this respect and should also fully fund the future purchases of all retirement properties for the scheme”.

The Pensions Board reported in March that more than 75 per cent of rent from residents went towards its borrowing costs, servicing debt with the Church Commissioners, the interest on two long-term bonds, and a credit facility with Santander.

A supporting paper for the resolution by the secretary of the Retired Clergy Association, the Revd Malcolm Liles, suggests that enabling clergy home ownership is a “noble” aim, but “not in touch with reality”. He cites stipends falling in value, the lack of mortgages for people over 60, high property costs in the South, and the high numbers of clergy applying to the Clergy Support Trust.

Asked in the General Synod last week about the potential for such an investment, the First Church Estates Commissioner, Alan Smith, said that the Commissioners were reducing their investment in retirement property “as part of a strategy to reduce the Commissioners’ investment focus from over-exposure to the UK residential property market”.

The Pensions Board (PB) has emphasised that “no changes are proposed that would affect current residents.” But Ms McIntyre and Mr Liles questioned this. “People have already been told that they will no longer be able to move to a different CHARM property, should the need arise in the future,” Ms McIntyre said. “This will result in ageing retired clergy living in properties that are not suitable for their health and mobility needs.”

“I am already aware of tenants who have been told that they cannot move out of their rather expensive property to a cheaper one elsewhere in the country,” Mr Liles wrote. “And some in their 60s but wishing to retire in the next year or two have been told to put off their retirement until the Pensions Board can supply a rented house.”

On Wednesday, a spokesperson for the Board disputed this: “If someone needs to make a move later in life, we do our best to help them find the right option for their circumstances. That often involves looking at accommodation with other specialist providers, including faith-based charities. At present, there is very high demand for church housing from newly retiring clergy, who will get priority over those already housed. If someone moves out of a church retirement property, and needs help later in life with housing, they are welcome to come back and talk to us about options that might suit their needs, including the Board’s Community Living schemes. . .

“We would never tell anyone to put off their retirement. . . We strongly encourage potential applicants to come to us as soon as possible — as early as five years before their target retirement date. We can’t hold properties empty across the country; so it’s often not possible to meet short-notice demands. We advise all applicants that it can take two years to identify and prepare a property for their retirement.”

The Revd Clive Morton, a retired priest living in a CHARM house in Cornwall, was told to sell his house on being accepted for ordination training in the 1970s. “This was done on the understanding that, when retirement came, I would be ‘taken care of’,” he said on Tuesday. “Any proposals about retirement housing need to be looked at in the light of this promise.”

This week, a retired clergy spouse told the Church Times the extent of the budgeting problems that she and her husband were facing: 98 per cent of the church pension was consumed by CHARM rent, council tax, and water rates. “When we need to move from this property due to increased age and/or illness, we have been told it will not be possible under the proposed new plans, despite the assurances from Board that nothing will change for current residents,” she said. “Neither will it be possible for a clergy spouse to remain in the property, should she be widowed.”

She was concerned by the Pensions Board’s reiteration that it would offer retirement housing “for as long as the Church is willing to fund it” (News, 13 October). “This goes against the guarantee of assured tenancy for retired clergy and is very worrying to current and prospective clergy retirees.”

The deadline for responses to the discussion document is 31 January.

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