Smart Pension has launched the first fully-diversified Shariah-compliant workplace pension, the first DC master trust to offer this option at scale.
The Halal Workplace Pension is launched in conjunction with Wahed, the Islamic digital investment platform. Smart says this new launch is designed to meet demand for workplace pensions form the UK’s Muslim employers and its 3.9m Muslim population.
The Halal Workplace pension offers a managed investment glidepath as the default investment option. Most existing Shariah-compliant pension offerings are single equity funds that members have to actively select, and feature no risk management in the run-up to retirement age, unlike non Shariah-compliant default funds.
The Halal Workplace Pension is available to employers who want to only offer Shariah-compliant workplace pension investment options to their employees. The investment option will be available across the UK to all of Smart Pension’s 1.4 million members later in the year.
The Halal Workplace Pension can assist employers who seek to enhance the long-term financial security of their Muslim colleagues. It levels the playing field, offering the same benefits that non-Shariah invested colleagues enjoy, alongside the-technology they would expect from an ecommerce app or digital bank.
The Muslim population has the youngest age profile of any faith group in the UK, with an average age of 27, significantly younger than the UK’s general population. In 2021 the Office for National Statistics found that 84.5 per cent of Muslims in the UK were 50 or under, compared to 62 per cent of the overall population. However, one third of Muslim employees don’t have a workplace pension, with 78 per cent citing concerns around Shariah compliance.
Smart Pension chief investment officer Paul Bucksey says: “This new pension scheme sets a new standard for financial wellbeing and pension provision among the UK’s Muslim population.” He says it combines Wahed’s reputation for Shariah-compliant investing with Smart Pension’s scale, industry-leading technology and customer experience.
He adds: “British Muslim employers and employees have been missing out on a fair investing landscape for too long, with little choice when it comes to investing their pension. This has left many Muslims in the UK feeling disconnected from financial services as well as their pensions. We hope the industry follows our lead and trustees and pension schemes consider how they can provide greater diversity and inclusion across their schemes.”
Wahed head of UK Syed Ahmed adds: “Wahed’s mission of financial inclusion through accessible and faith-based investing is strengthened through our collaboration with Smart Pension, one of the UK’s leading workplace pension providers.
“This pioneering pension scheme ensures equitable opportunities for Muslims, adhering to Shariah principles. It represents a significant step towards levelling the pensions landscape and nurturing financial empowerment”.
Hymans Robertson head of DC provider relations Shabna Islam adds: “Smart Pension and Wahed have taken this crucial step in the right direction – improving diversity, equity and inclusion in the DC workplace pensions market. By offering a Shariah-compliant managed investment option they are breaking barriers in the access to pensions for the Muslim community.
“As an independent third-party evaluator of the DC master trust market and a British Muslim, it’s been very sad to see how the Muslim community has been handicapped through a lack of choice on pension scheme investment options. I’m excited about where this journey will take scheme investment options and hope that other providers will take note. It’s about time we helped those who are less engaged with pensions to trust pension providers. Offering better options that align with savers’ beliefs will improve their outcomes.”
