Shari`ah-compliant Pensions for UK Muslimszulkiflihasan
Shari`ah-compliant Pensions for UK Muslims
Available at: http://ww2.onislam.net/english/news/europe/452636-shariah-compliant-pensions-for-uk-muslims.html
CAIRO – Eyeing to get a share of the booming Islamic finance industry, a British firm has launched a Shari`ah-compliant fund to enable Muslims to save for retirement, the Zawya website reported.
“We developed this product because we realized that there were no Shari`ah compliant registered pension schemes in the UK that supported Islamic wealth management,” Jo French, managing director of Pointon York, told The Islamic Globe.
Launched by Pointon York, a UK-based financial advisory company, the self-invested personal pensions (SIPP) allow British Muslims to save for retirement in compliance with religious and ethical principles.
Point York is the first firm to get Shari`ah-compliant accreditation by the Islamic Bank of Britain (IBB).
“People are being alerted to the risks of not putting enough aside in pensions for their retirement,” said Sultan Choudhury, the commercial director of IBB, according to The Independent.
The fund offers four products, one of which is the corporate SIPP, which is made up of three tiers to allow an extensive and varied range of investments.
The first level is the e- SIPP, which is a simple product aimed at individual savers who want to manage their pension investments online.
A second level is the Single Investment SIPP, a straightforward SIPP for clients wishing to invest in a single asset.
The third individual SIPP serves more sophisticated investors through a fully flexible SIPP allowing an extensive and varied range of investments.
Accordingly, investors will be able to save in a self-invest personal pension and choose from a range of Shari`ah-compliant assets. These could include cash, funds and property.
Savers will also be able to enjoy tax relief on their pension contributions.
Britain is home to a sizable Muslim minority of nearly 2 million.
The new fund is aimed to fulfil a growing demand for Muslims for Shari`ah-compliant products.
“As we developed the SIPP product we realized that many of the ethical concerns of our existing, non-Muslim clients were reflected in this Shari’ah compliant product,” French, the managing director of Pointon York, said.
Despite the presence of five Islamic banks, Britain’s retail Muslim market has been underserved for Shari`ah-compliant products and savings vehicles for a number of years.
“Retirement planning has been neglected because, among other reasons, the specific needs of Muslims have not been addressed,” Choudhury of the IBB said.
The IBB will monitor the SIPPs to ensure they do not invest in non Shari`ah- compliant markets such as gambling and tobacco.
Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
The Shari`ah-compliant system is now being practiced in 50 countries worldwide, making it one of the fastest growing sectors in the global financial industry.
Starting almost three decades ago, the Islamic banking industry has made substantial growth and attracted the attention of investors and bankers across the world.
A long list of international institutions, including Citigroup, HSBC and Deutsche Bank, are going into the Islamic banking business.
Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.