The plan to provide retirement funds for millions who do not already have a company pension is likely to include a special option that would not invest in companies deemed sinful under Islam.
Ministers are keen to get Muslims saving with the Personal Accounts Delivery Authority, as many who have low-paid jobs or who have moved to Britain in recent decades are unlikely to have put away much for their old age.
The prospect of some aspects of shari’a law such as divorce proceedings and dispute resolution being enshrined in the English legal system – raised by the Archbishop of Canterbury and Lord Chief Justice this year – remains highly controversial because of fears that the system discriminates against women and that a two-tier approach would be divisive. But more and more financial products are being tailored to cater for Britain’s population of 2 million Muslims. The religion’s holy book, the Koran, forbids Muslims from making money from money, so they cannot use products that involve the charging of interest nor invest in traditional financial services firms. Gambling, drinking, and pornography are also seen as immoral under Islam, so Muslims cannot put their money into companies that promote these activities.
The Islamic finance market is estimated to be worth £500million already and is growing rapidly. Families can already get shari’a-compliant baby bonds under the Government’s Child Trust Fund scheme while the UK is likely to become the first Western country to issue Islamic bonds in order to raise money from the Middle East.
The decision to provide a shari’a-compliant pension fund is another sign of the growing influence of Islamic law in British public life and in particular the country’s finance industry.
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