Penfold reveals £11.5bn pensions gap for UK Muslims

Working British Muslims have an £11.5bn pensions gap, new analysis from Penfold has revealed.

This shortfall in retirement savings can be partly explained, according to Penfold, by the failure of the industry to provide and adequately communicate Shariah pension options to UK Muslims.

According to data from Islamic Finance Guru, 206,720 of working Muslims (a third of all UK Muslims) are missing out on a vital element of financial security by not having a pension.

When asked, 80 per cent 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 £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, meaning that collectively the 206,720 working Muslims without a pension could hold over £11.5bn when they reach retirement age.

According to Penfold, the figures highlight the need for the pensions industry to “recognise that the needs of today’s saver have evolved”.

Penfold argued that incumbents must 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, 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 that 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 that 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."

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