Ajmal Bhatty
Promoter of Ethical Financial Solutions
Founder of World-Of-Takaful

THE FUTURE OF UK SHARIAH-COMPLIANT PENSIONS

The UK pensions ecosystem is undergoing a critical review, with the UK Pensions Regulatory bodies, assessing the availability of “Shariah-compliant pension solutions”. In their first consultation with the UK Islamic Finance and Halal Economy Hybrid Group, a dedicated “Pensions Panel” was established to drive this initiative forward, aiming to integrate ethical, inclusive, and faith-aligned financial solutions within the UK’s retirement landscape.

Globally, pension systems are confronting major challenges—”longevity risk, demographic shifts, economic volatility, and gender disparities”. In the Islamic finance sector, Shariah-compliant pension funds account for only “5%” of total Islamic financial assets under management, despite the growing demand from aging Muslim populations.

The UK faces a distinct set of obstacles:

1. Limited Shariah-compliant pension options
2. Low pension savings among Muslims
3. Widespread lack of awareness of pension tax benefits and employer contributions

This gap in retirement security risks financial exclusion for Muslim retirees and poses broader socio-economic consequences. The shortage of Shariah-compliant pension solutions in UK is especially stark in the de-accumulation phase, where savings convert into retirement income. Addressing this issue requires innovative compliant solutions, including equity-based and real estate-backed assets, alongside “regulatory support” and “financial education” for the Muslim community.

MAKE YOUR VOICE HEARD – PARTICIPATE IN THIS SURVEY

SURVEY LINK

To ensure that policymakers, regulators, and pension providers understand the demand for Shariah-compliant pension solutions, interested individuals and employers are invited to participate in a “survey”. The insights gathered will be incorporated into a report to be presented to the “Pensions Regulator”, highlighting the “strong demand but limited supply” of faith-based pension options in the UK.

This initiative marks a pivotal moment in shaping a “financially inclusive future”—where faith-based principles and economic sustainability converge to empower all retirees and strengthen the UK’s broader pension system.