"The failure by incumbents to provide pension options which suit the needs of today’s saver is not only unjust, but it’s also a reckless mistake which will have far reaching consequences if not corrected."
According to data from Islamic Finance Guru, 206,720 working people are missing out on a vital element of financial security by not having a pension, but it’s not through a lack of interest. When asked, 80% of UK Muslims without a pension responded that they didn’t know compliant options existed or that they weren’t sure if the pension offered to them was Shariah-compliant.
According to calculations from Penfold, if the average person contributed just £50 into their pension a month from the age of 25 using the provider’s Shariah fund, they could expect to have a £55,755 pension pot by the age of 67. This means that collectively the 206,720 working Muslims without a pension could hold over £11.5bn when they reach retirement age, if directed towards pension providers who can offer Shariah-compliant investment options.
Pete Hykin, co-founder of Penfold, commented: "The pensions industry is sitting on a ticking time bomb, promising to threaten the financial wellbeing of hundreds of thousands of people. The failure by incumbents to provide pension options which suit the needs of today’s saver is not only unjust, but it’s also a reckless mistake which will have far reaching consequences if not corrected.
"The industry puts too much time and resource into developments which only benefit a select few. These efforts are misguided, failing to make pensions inclusive and with the customer front of mind. Making sure people are saving enough for retirement is the ultimate goal for the pensions industry, so there needs to be greater progress and emphasis on ensuring there are pension and investment options suited to all.
“With new, innovative pension options, such as Penfold’s Shariah-compliant investment plan, UK Muslims can be sure their pension aligns with their faith while providing financial security post-retirement. Employers and long-term industry incumbents need to follow suit so that Muslims are aware of the options available for securing their long term financial security.”
