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Muslim workers in the UK face pension gap of £11.5 billion

Muslim employees face a pension gap of up to £11.5 billion, according to research from pension firm Penfold.

The research found 206,720 working Muslims in the UK didn't have a pension.

Much of this could be attributed to a lack of awareness about Sharia-compliant pension policies, which don't invest in non-halal industries such as alcohol, tobacco, pork, and the finance sector.

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Shakil Butt, founder of HR Hero for Hire, said a lack of senior Muslim HR professionals is contributing to the lack of awareness.

Speaking to HR magazine, he said: "Shariah compliant simply means a pension scheme that typically has been considered by a panel of Muslim jurists who understand both the Islamic stipulations and the pension market sufficiently to ensure what is being offered is ‘halal’ or permissible under Islamic law or Shariah.

"The lack of senior Muslim HR professionals is part of the issue and symptomatic of a profession which has not been sufficiently welcoming to minorities from ethnic backgrounds with most Muslim employees having diverse ethnic heritage.

"Consequently Muslims are largely absent in the wider HR community so they are not able to influence policies and decisions that impact Muslim employees."

Pete Hykin, co-founder at Penfold, said that businesses need to work harder to provide pension options that suit all employees.

He said: "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."

Butt added that Sharia pensions would appeal to more than just Muslim workers.

He said: "Shariah compliant pension funds are not limited to what is considered harmful to wider society but also what is beneficial such as environmentally friendly investments or social enterprises supporting communities.

"For that reason Shariah compliant pension funds are not limited in appeal to Muslim employees but because of the strict definitions of what is permissible ethically. They can also appeal to people of other faiths and no faith who want to ensure their money is not being used in an unethical way rather in service of society so presenting this as an option to all employees ensures no is being excluded."