The Church of England (CofE) Pensions Board has reported a year of strong investment performance, historic clergy pension reforms, and new responsible investment priorities in its 2025 Annual Review.

The board, which oversees £3.5bn of predominantly defined benefit (DB) pension assets, achieved a 9.5 per cent return in 2025, with average annual returns of 8.2 per cent over the past 20 years.

Public equities returned 17.9 per cent and emerging market equities returned 26.8 per cent.

The diversified income pool returned 5.6 per cent, while £593m was invested in gilts and liability-driven investment strategies at year-end.

All schemes remained at or above full funding at their most recent valuation, underpinning what the board described as a robust financial position.

CofE Pensions Board chair, Clive Mather, said the results provided "a fitting backdrop" as the board approached its centenary year in 2026.

“This year, we celebrate 100 years of providing pensions and retirement services to those who work for the Church,” he added.

"What better way to start our centenary year than to announce historic changes to clergy pensions, made possible by strong investment returns.

In July 2025, the General Synod backed a substantial package of benefit improvements to the Clergy Pension Scheme, with rule changes due to be finalised in February 2026.

The reforms will improve accrual rates to 1/60th of pensionable stipend from April 2026, uplift post-2011 service, remove the service cap for active members and award an additional pension increase for recent retirees, among other changes.

The valuation of the Clergy Pension Scheme found it to be more than fully funded, enabling improvements expected to deliver more than £1bn of additional benefits over the lifetime of the scheme, funded from existing assets, while also reducing the contribution rate to 21 per cent of pensionable stipends.

Alongside pensions reform, the board secured £95m of national church funding over three years to support retirement housing and new financial wellbeing services.

Plans for 2026 include the launch of a suite of financial products and guidance for clergy, such as grants to support long-term savings for newly ordained ministers, access to financial coaching and a new online “Finance Hub”.

Meanwhile, the board also unveiled five new responsible investment priorities, including a strengthened focus on systemic risks such as climate change, support for peacebuilding and human rights, and a 10-year vision for the mining sector through its Global Investor Commission on Mining 2030.

CofE Pensions Board chief executive, John Ball, described it as a "deep honour" to support members and residents in their service to the Church and in their retirement.

"It is a humbling responsibility to think that our youngest members will be drawing their pensions into the next century," he continued.

"This review shows how we are already laying the foundations to support our members well for many years to come.”

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