Shortage of Sharia-compliant pensions lets down savers
A lack of Sharia-compliant pensions is leaving many people unable to save for retirement.


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.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
8 of the best properties for sale by the sea
This week: the best properties for sale beside the sea – from a six-storey Georgian townhouse in Tenby, Pembrokeshire, to a house on Scotland’s Knoydart peninsula overlooking the Sound of Sleat
By Natasha Langan
-
Is UK prime property making a comeback as a safe haven asset?
Cheap prime central London property is attracting overseas buyers, helping it regain its safe haven status
By Marc Shoffman
-
A new wealth tax is a terrible idea. The rich are already being hit by sneaky taxes – Merryn Somerset Webb
Opinion Ideologues want to squeeze more tax out of the rich with a wealth tax. They’re already wrung dry, says Merryn Somerset Webb
By Merryn Somerset Webb
-
Has your pension plunged in stock market turmoil? How to avoid creating real shortfalls
Sliding stock markets are no reason to sell out of your pension in a panic, says David Prosser
By David Prosser
-
Pensions revolution: how to profit from the trends shaping the UK pension system
The UK pension system is one of the biggest in the world. Big changes are under way, says Rupert Hargreaves
By Rupert Hargreaves
-
What MoneyWeek writers read and watched in 2024
Here's a roundup of MoneyWeek's favourite books, films and TV shows in 2024
By Dr Matthew Partridge
-
Parents face £1,000 'nanny tax' – how to afford it
Hiring a nanny is about to become even more of an expensive hassle for families, especially those in London. Here's how to cut costs
By Ruth Jackson-Kirby
-
Is it cheaper to be a sole trader?
It might be cheaper to be a sole trader due to changes to the tax system
By David Prosser
-
Should you switch your pension fund?
Many pension fund options are poor performers, thanks partly to high charges. Is it worth switching?
By David Prosser
-
The best fintech apps on the market
From digital banking to investment platforms, here are the top fintech apps on the market right now, according to David C. Stevenson
By David C. Stevenson