After Pope Clement VII refused to approve the annulment of Henry VII’s marriage to Catherine of Aragon, urged by the King, the English Parliament passed a series of acts that separated the English church from the Roman hierarchy. This was the first official establishment of the Church . Since then the Church of England has gone through many changes, its’ importance in the world fluctuating over time. With signs of the Church in decline sprouting up in this post-enlightenment age, as according to the Office for National statistics there has been nearly an 8.3% decrease in Christianity in England and Wales since the 2011 Census , it causes one to wonder whether its finances have suffered the same fate and to what extent has the Covid-19 pandemic in the UK affected it?

It may come as a surprise that according to the 2020 Church Commissioners for England Annual report the Church has an endowment of £9.2 billion, having received a return of 9.7% per year over the last ten years and growing from £8.7 billion at the start of the year . Investment wise their objective is a return of CPIH+4.0% in the long-term to support the costs of running of the Church, with its 16,000 church buildings and 42 cathedrals that due to their age carry huge maintenance bills. The returns from the investment fund approximately account for 15% of the Church’s running costs, as well as funding the pensions of retired clergymen and the charitable work done by the Church in the poorest areas of the nation. The largest source of income for the Church are donations, which finance around 75% of its just over £1000 million a year running costs. Alongside, returns from its’ investment fund, as well as donations, the Church receives funds through the £42 million Listed Places of Worship Grant Scheme, which has supported over 13,000 places of worship .

Despite the Church’s considerable revenue streams there are hundreds of clergymen facing financial hardship, forcing some to resort to credit cards or even a high-interest payday lender to maintain a reasonable standard of living. The extent of this issue can be observed with the help of Clergy Support Trust, a charity which supports destitute Anglican clergymen, that reports in 2018 they gave £1.8 million worth of grants to 459 clergymen . Financial issues regarding clergymen are not a recently emerging trend, but an issue that has been developed over decades. This can be concluded as in 1963 the Church Commissioners paid for 75% of clergymen stipends, but in 2015 only around 10% were funded by the Church with there being no ongoing support in many dioceses and parishes. This phenomenon can be in part explained simply by the fact that the Church has been historically spending above their means. Another factor that has contributed to this is the rising cost of running the Church of England. 

The Covid-19 pandemic had a striking impact on the operations of the Church with more than half of the 12,500 Anglican parishes in England having closed their churches to public worship. However, was the Church hit as hard financially due to the pandemic8? With increasing costs of living and unemployment, it was obvious that donations would decrease. Unsurprisingly, according to the Parish Finance Statistics of the Church in 2020 the number of planned givers fell by around 43,000, which was the biggest annual reduction over the period9 . Additional evidence that the reduction in donations caused by the Covid-19 pandemic had disastrous effects on the Church was that in response to struggling parishes and cathedrals the Church Commissioners provided £75million of immediate liquidity support and established a £35million Diocesan Sustainability Fund programme, plus a £20m Cathedral Sustainability Fund10. Covid-19’s effect on the Church’s investment fund was much less than one would presume as in 2020 the economic damage that was waged by Covid-19 was offset by loosening of monetary policy by Central banks across the globe, alongside the successive rounds of quantitative easing and immense fiscal stimulus packages. 

Fears that the Church of England is in the ‘red’ are unneeded, with the total income for 2020 and total gains on investment assets being £128.5 million and £777.4 million respectively, and the total expenditure being £318.3 million. However, it must be acknowledged that the Covid-19 pandemic affected the finances of the Church with a reduction in income from the previous year of £46.8million, albeit not as much as expected due to unprecedented monetary and fiscal policy. The waning of the demand for the Church, accompanied by its’ rising costs make it improbable that the status quo will be able to be kept in the future.