Industry has failed to provide and communicate Shariah options to Muslims
There is an £11.5bn pensions gap for working British Muslims with a third not having a workplace pension, research from Penfold reveals.
The pensions provider said, according to data from Islamic Finance Guru, 206,720 working Muslims do not have a pension, with research finding that 80% of these saying they did not know compliant options existed or that they were not sure if the pension offered to them was Shariah-compliant.
Penfold said if the average non-saver contributed just £50 into their pension a month from the age of 25, they could expect to have a £55,755 pension pot by the age of 67 - meaning that the 206,720 working Muslims without a pension could hold over £11.5bn when they reached retirement age.
The provider said the industry had failed to provide and adequately communicate Shariah pension options to UK Muslims - saying today's figures "highlight the need" for schemes to provide options which align with a variety of faiths and values, so as not to exclude anyone from financial security in retirement.
Penfold co-founder Pete Hykin 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."
