A row between Uber and some of its drivers is shining a light on how many Muslims feel unable to save for retirement because they do not have access to Sharia-compliant pensions.
Trade unions representing Uber drivers say the ride-hailing app’s introduction of a pension scheme that does not offer a Sharia-compliant fund is letting down Muslim drivers, who account for a majority of its workforce. Union leaders have now threatened Uber with legal action. The row underlines the broader need to ensure Muslim savers and investors have access to pension plans that enable them to plan effectively for retirement.
To comply with Sharia law, pension funds must not invest in companies involved in activities that contravene the principles of Islam. This will include businesses that produce or sell alcohol, tobacco, arms and pork. Funds with exposure to gambling also fall foul of Sharia laws – even some financial services will render funds non-compliant.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Research published last year found 30% of Muslims in the UK did not have a pension, with the lack of Sharia-compliant options cited as the leading reason.This represents a market failure, since the UK is home to 3.4 million Muslims, but some pension providers are taking advantage of that opportunity. Both Nest and The People’s Pension offer Sharia-compliant funds to millions of savers in work-based pension plans.
• The volume of savers breaching the annual and lifetime allowance pension contribution limits has hit an all-time high, new data from HM Revenue & Customs reveals. The number of taxpayers exceeding their annual allowance rose 24% in the 2019-2020 tax year, the most recent period for which HMRC has published figures, while breaches of the lifetime allowance rose 19%. With tax levies of up to 55% on the excess, the data underlines why savers must get to grips with the allowances, which catch out more people each year.
• Will your pension last you a lifetime? The number of centenarians in the UK is set to grow 78% over the next 20 years, with more than 29,000 Britons aged at least 100 by 2041. The prediction, from financial planners at Bowmore Wealth Group, shows why savers must think carefully about how to ensure their pension funds last for as long as they need them. Buying an annuity that pays a guaranteed lifetime income may be worth considering, although since inflation-linked annuity rates are still low, this is not a straightforward decision.
• The number of British expatriates living in countries where they do not receive increases to their UK state pension now stands at almost 500,000. Britons can claim their state pension even if they retire overseas, but it will only increase in line with raises in the UK if their new home has a social security agreement with Britain. In most countries (including Australia, Canada and New Zealand), their pension is frozen at the level payable when they begin claiming. The anomaly now affects half of all Britons moving overseas.
-
How to pay in a chequeReceiving or writing a cheque has become much less common in recent years as instant bank transfers have grown in popularity. Amid widespread bank branch closures, we explain what to do if you get a cheque, and how you can pay one into your bank account.
-
Crypto assets of seven million UK investors at risk – how to keep yours safeCryptocurrency wallet rules make it hard to track down assets after someone has died, even if they leave a will saying who they would like to inherit them
-
Why is Britain's industrial base crumbling?Opinion More and more factories in the UK are closing, and the government doesn’t seem to care. What’s going on?
-
Scotland's former first minister Nicola Sturgeon leaves behind a toxic legacyOn the left, Nicola Sturgeon is seen as something of a political hero. That makes sense… but only if you exclude her actual record in office
-
Fifty years of investment fiascos – a few examples to learn fromA benign market backdrop over the past 50 years has not prevented recurrent routs, says Max King
-
How to use SAYE and SIP schemes to multiply your moneyEmployers’ savings or share-incentive plans like SAYE and SIP schemes can help top up your pension
-
Just Group has the wind behind it – should you invest?Just Group, a retirement products provider, is well placed to profit from a growing annuity market
-
Why strong currency is the key to upward mobilityChange your social status and your life by saving money in strong currencies, says Dominic Frisby
-
Flex first, fix later: a hybrid retirement strategy to considerYou needn’t choose between income drawdown and an annuity in retirement. What is a “flex first, fix later” approach?
-
A new wealth tax is a terrible idea. The rich are already being hit by sneaky taxes – Merryn Somerset WebbOpinion Ideologues want to squeeze more tax out of the rich with a wealth tax. They’re already wrung dry, says Merryn Somerset Webb
