|TOP|As the Church of England faces a growing pensions crisis, congregations across the country are preparing to dig deep into their pockets.

Suffolk is just one of the congregations that could be asked to raise as much as £600,000 more a year to cover the shortfall in the Church’s final salary pensions, which it says are essential for retiring vicars, reports the East Anglian Daily Times.

The Church of England is facing the prospect of closing its final salary schemes to new members if the money to cover the deficit cannot be gathered through local-level collections.

The looming crisis has been largely attributed to changes in pension legislation by the Government as longer life expectancy and lower investment returns continue to put pressure on the current pensions system.

Suffolk churchgoers have just recovered from raising a record £5.1 million to cover a budget shortfall which triggered fears of a vicar recruitment freeze.

|QUOTE|Nick Clarke, spokesman for the Diocese of St Edmundsbury and Ipswich, said last week: “It's extremely disappointing that, because of changes by the Government which the church has no control of whatsoever, Suffolk's churchgoers will be facing a potentially massively increased requirement to ensure the clergy pensions are paid in full from this point forward.”

While vicars earn relatively little, they are given a house, coupled with support for bills and council tax, as part of their pay package. The problem occurs when the vicars are retired.

But Mr Clarke explained: “The downside is that they are quite dependent on final salary schemes to help them buy a house when they retire.”

Under the current total budget of the church in Suffolk, nearly £905,000 are allotted to pensions.

|AD|Nicholas Edgell, chief executive officer of the diocese, told the diocesan synod last week: “Based upon the most recent figures provided by the Actuary, the present contribution rate of 33.8% will rise to perhaps 46% or even 57%, should the pension regulator require the existing deficit to be cleared in not more than ten years.

“Converting percentages into pounds focuses the mind. The Church of England will need to find additional payments of between £18m and £36m per year.

“To focus the mind still further, the recent press release stated that 'these costs will need to be met by the dioceses from contributions made by parishes'. In our diocese, I calculate that this will amount to £300-600,000 per annum.”

A six-month consultation is due to begin with diocese on the pension review after Easter.