Managing Reserves

The guidance and downloads on this page are currently under review. The information is still useful to get your PCC started with thinking about reserves, but check back for updated guidance or see the links below.

For full guidance on see:

Whether you are blessed with significant reserves, or breaking even each month, every PCC needs to do a few things .

Develop a policy

As a charity, every PCC should consider whether it needs to hold reserves. Whether the decision is to hold reserves or not, you should have a clear policy explaining this and refer to it in the Annual Report.

Determining the level of reserves necessary to meet both the current and future needs of the parish, will take thought and prayer. The time spent in devising such a policy is likely to be dependent on the level of reserves the PCC holds rather than the size of the congregation or where the church happens to be located. The importance of taking care over reserves applies to all PCCs, although the level of detail needed will vary with the parish’s size and circumstances.

• Download our simple guide to parish reserves policies
• Explore four examples of parish reserves policies
• See some Frequently Asked Questions about reserves

Decide if and where your reserves will be invested

However much or little you hold, PCCs will need to decide where reserves are held or invested, even if this is as simple as placing surplus cash in a deposit account. This should be reviewed periodically, and whenever economic circumstances change – either at the parish level, or within the wider economy. All PCCs should review where their reserves are invested if they haven’t done so recently.

The Ethical Investment Advisory Group (EIAG) provide practical advice to three National Investing Bodies (NIB) of the Church of England, to enable them to invest in a way that is distinctly Christian and Anglican. You may find their advice and reviews for the NIB helpful for identifying ethical, environmental and social considerations when thinking about investing reserves.  

Why spend time thinking about reserves?

This is an important topic for a number of reasons :

• The principles of accountability and transparency mean that PCC members should be aware of the level of free reserves for which they are responsible.
• It is good stewardship to ensure these reserves are used to gain maximum benefit for the parish as a whole in its pursuit of the whole mission of their church. The idea of simply keeping money for a general ‘rainy day’ is no longer regarded as an adequate reserves policy on its own.
• In short, the Charity Commission expects trustees to explain and justify reserves in line with the charity’s risks, plans and future needs.

Updated: April 2026 (Content under review)