Muslims contribute about 30 billion pounds to the UK's economy every year but an overwhelming number of them opt out of the government's pension plan because they consider it to be backed by investments that aren't in line with Islamic laws.
Ibrahim Khan and Mohsin Patel provide assistance and services to Muslims in the UK for their investments, personal finance and entrepreneurial journeys. They want to make Muslim community better-off by a socio-economic uplift in their livelihood to deal with problems like discrimination, under-representation and poverty.
“Need more people like these guys out there. Doing a fantastic job of delivering much needed services, advice, guidance and education,” a review says of Islamic Finance Gurus, Ibrahim and Mohsin, who aim to bridge the gap between classical Islamic scholarship and modern-day commercial awareness when tackling all the complex Islamic finance problems of today.
TRT World spoke to Ibrahim Khan on a number of issues from cultural discrimination in the workplace, to bank account exclusion and the absence of Islamic pension products.
“It’s an absolute disgrace that Muslims in the UK, a third of 600 Muslims that joined our poll don’t have a pension and of the ones they do, a large section of them don’t have a halal pension but they would love to have a halal option,” says Ibrahim, explaining the financial discrimination against Muslims. The community is missing out when sharia-compliant workplace fund are not available.
At least 30 percent of the respondents said they do not have a pension and among them, 80 percent expressed their shariah-compliance concerns, saying they stayed away because there was no halal option.
Islamic or halal pension funds work in a similar manner as conventional funds except that the Islamic pension funds only deploy funds in Shariah-Compliant investments, which include the exclusion of investments in alcohol brands, pork products, pornography, gambling, military equipment or weapons. The Shariah-Compliant investments are also free of Riba (interest) and Gharar (speculation).
“That’s staggering,” Ibrahim says and “this is literally going to lose the Muslim community in the UK hundreds of thousands of pounds over a generation and it’s really a fix.”
“40 percent of the employees said their employers don’t provide halal option. That just boggles the mind and the incredibly mainstream, very large companies don’t have a halal pension available. This is actually against the Equality Act of 2010 and there isn’t any government level guidance and there isn’t any real awareness of this whole issue” Ibrahim argues.
The 2010 Equality Act legally protects UK citizens from any kind of discrimination in the workplace and in wider society. It replaced previous anti-discrimination laws such as the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act, the Disability Discrimination Act 1995 with just one new umbrella section which offers protection against discrimination based on a person's nationality and citizenship while also extending individuals' rights in areas of life beyond the workplace in religion or belief, disability, age, sex, sexual orientation and gender reassignment.
The 2010 Equality Act covers everyone in Britain and protects people from discrimination, harassment and victimisation based on the nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
“Pension is an issue quite technical and quite boring and most people don’t realize the importance of it. The UK government introduced legislation a few years back making it compulsory for people to have pensions automatically, unless they opted out of them when they started a new job," Ibrahim says.
"Now 70-80 percent of the people in the UK have pensions but despite this legislation Muslims are actively opting out of pensions when they get the chance, only about one-third of them going for these pensions. The reason is probably twofold; one is lack of awareness on halal options and how to go about getting a halal option, which is an education issue and the government has a pension advisory service that they should make sure Muslims are educated about this and then the other key thing that government can do, is to put more pressure on employers to say that ‘you have to provide an Islamic option and make it very visible when people sign up for a pension’ so it’s so much easier people to have pension when they know that a halal option is there available”
Ibrahim says they are directly in contact with the Barclays pension administrators for a client. “They openly said they’re not gonna offer halal options because ‘there isn’t really a demand and obviously a need for it’ and yet there are 20 other mainstream pension options out there for everyone else. It should be relatively easy to just add one more option for Muslims”
“But the other big issue here is that Muslims who do have a pension, all of that money pretty much sits in one Islamic fund that is the HSBC fund. So, God forbid if anything happens to that fund the entire Muslim pension pot will suffer as a result of that. And yet for a mainstream, non-Muslim person, they have an option of 5, 20, 40 funds at times so that they can spread their pension out across 3, 4, 5 funds whereas for Muslims, for all Muslims it’s pretty much always just one pension fund. That’s the case for me as well, with my own pension”.
According to the Office of National Statistics data based on the 2018 Annual Population Survey at the Great Britain level (England, Scotland and Wales), there are 3,372,966 Muslims in the UK, making up 5.1 percent of the total population. The Muslim Council of Britain’s 2011 Census provides a frank snapshot of the state of British Muslim life focusing on the demographic, socio-economic, and health profile of Muslims. This detailed study shows poverty, deprivation, and disadvantage are social realities for many Muslims “The priority from the British Muslim perspective must be economic regeneration and policies for labour market entry.“
The Muslim Council of Britain’s 2011 Census also focused in on the doubling in number of elderly Muslims. Based on extrapolation of the 2011 data for the 55-74 age band, an approximate number of 190,000 Muslims in the 65-84 age band were expected by 2021. While UK Muslim communities are generally very young, the population is gradually getting older, and more are reaching retirement age. That’s why there is such importance placed in pension funds in the face of contemporary demands on family life, as opposed to the traditional values of caring for elderly parents. Pensions are a must to maintain their standard of living in retirement, and can provide protection to dependants in the event of a member's death, guarding Muslim families against poverty.
Financial inclusion is a key strategy to promote inclusive development, which empowers households to better manage financial risks and/or recover from the impact of shocks and crises. Recently, pension provider Options UK joined forces with Halal investment specialists to launch a fully diversified, Sharia-compliant workplace pension. As Christine Hallett, managing director of Options UK, says “there is a noticeable gap in this market with many employees not being able to access their auto-enrolment contributions as the funds they are invested in go against their faith.”
“Muslims contribute about 30 billion pounds to the economy every year in the UK. There are large Muslim owned businesses and Muslims among the top 100 richest people integral to the economy. From supermarket giant Asda and petrol station empire Euro Garages and ID checker Onfido to Muslim doctors, nurses and dentists in the NHS. Muslims are 5% of the population here in the UK but they constitute the 15% of the NHS workforce and these are fairly well paying professions. As a significant matter of welfare, this is a marginalised community from the financial perspective, they don’t have solutions available like halal insurance or credit cards, or a range of pension or investment funds for them. There is definitely profit to be made from them if mainstream financial companies were interested in providing services and products” Ibrahim explains.
There are ethical funds available according to the environmental, social and governance (ESG) standards under various names like socially responsible investing ( SRI) or impact investing. Although ethical funds help cater for many people who feel strongly about climate change, social issues or good leadership/governance, ethical funds are not necessarily Islamic funds. Sharia-compliant investing also follows the belief that all natural and depletable resources should be managed for future generations, but the process involves financial screening not only to avoid interest (Riba) and investing in industries including alcohol, gambling, firearms, and tobacco, but also to ensure securities are Sharia-compliant and investments in heavily indebted (must be below 33%) companies are avoided.
Ibrahim works on behalf of many Muslims to campaign on this point as he believes that every employer needs to have an Islamic pension fund option available, and if not, then this is against the Equality Act of 2010. But it is not easy for Ibrahim or his partner Mohsin or the many other Muslims working in high-powered industries like law and finance where alcohol is the social-bonding catalyst that allows people to make connections and get ahead. Those who are teetotal or for whom alcohol is forbidden cannot benefit from this advantage.
“There are cases and situations where you feel uncomfortable. The big one is in the training itself because if you are a lawyer or working in any of the professional services companies you have a training period. You will be doing all ranges of activities during orientation and there will be certain evenings like at a ping pong bar where you will be having drinks. If you are a Muslim and not happy to go along which I did too quickly and then I would miss out. I felt like I wasn’t necessarily as close to my intake of trainees as perhaps I could be if I had gone. That’s not good for the mental health of the person, not good for their morale and it’s not actually good for the company as well because you want your staff to be fully motivated.”
Ibrahim also mentions there is no culture of speaking up against it, and doing so is fraught with risk. “I’m someone who is barely confident, I wasn’t brave enough to speak up about that during my training. There are many other people in the same boat who regularly approach us.”
Many Muslims who complete training contracts are forced to work in non-sharia compliant industries for a specified time-period. “Many new graduates face a harsh reality when they want to go into these industries. Either they are forced to work in an industry that is against their religion or speak up and face a potentially damaging career impact as a result of speaking up” Ibrahim says.
Ibrahim constantly champions for inclusivity both in the City and out among the community through various platforms. In his latest piece for Muslims in the finance industry, Ibrahim describes the need for a more culturally-sensitive workforce. “I’ve met too many Muslims who, like me, felt they didn’t quite belong in the city and left. This comes at a cost to firms who invest heavily in new hires only to see them abandon ship after a few years. Often their employer will not know why, since these conversations have not been a part of the relationship from the get-go.”
Apart from the career itself, there is also the socialising aspect. “A lot of socialisation takes place over drinks either in a pub, bar or a restaurant. You can definitely go to these places for a meal, but there is a different level of connection that happens when you drink together I guess.”
Dr. Suriyah Bi’s 2020 study on Muslim Women’s experiences of work and career development reveals that of the 425 women surveyed, almost half of them (47.2 percent) stated they had encountered Islamophobia and discrimination as a challenge in the workplace. “A major obstacle highlighted in the workplace was the alcohol culture, which dominated networking events in particular. Workplaces are urged to instill a culture where it is acceptable to network over non-alcoholic beverages. Workplaces are also encouraged to offer nuanced and tailored diversity and inclusion training to expose their workforce to the range of conscious and unconscious biases. Employers can also increase the accessibility of flexible working as an option for Muslim women. Employers are also urged to issue clear guidelines as to behaviours that constitute as Islamophobic, anti-Muslim, and/or racist.”
Anecdotes from this Independent Piece show how alcohol in a social setting creates a barrier when networking. For many Muslims, as 26-year-old trainee corporate lawyer Maha al Habib discloses, drinking is the primary way her team socialises: “I feel my manager is closer to my colleague because she regularly joins them for Friday night drinks whereas I don’t. I’m worried that my career progression will be impacted if I don’t join staff at the pub.”
And Maha’s concerns about her chances of promotion aren’t unsubstantiated according to Dr. Bi’s study which shows that over 84.2 per cent of British Muslim women were found to be actively engaged in the labour market, almost half of all participants were earning below the ONS’s average household income of £28,000.Independent writes, “Maha’s decision to skip hanging out with her colleagues on Friday night is costing her the chance to rise to the 8% of BME partners at large law firms.”
Legal and financial institutions need to create a more diverse and inclusive workplace culture that is more aware of religious sensitivities towards certain issues, Ibrahim argues. “I’m not saying they should stop drinking, that’s not realistic, what I’m saying is that socialising events could include a range of activities like sports or like a meal at a restaurant and they can have their drinking events. Yet it shouldn’t be all just drinking events. Organisations need to do more in order to create a healthy, diverse networking culture in industry. Things need to change because if a Muslim is not comfortable socialising in the ‘after-work’ drinks culture, they are deprived of the essential networking opportunities that come with such activities.”
[NOTE: The article came from TRT World’s Eyes on Discrimination (EOD) Centre, which monitors and reports on offences, hate crimes and discrimination on the basis of gender, race, ethnicity, national origin and religion, or other related social categories. We promote and encourage respect for human rights and fundamental freedoms for all without distinction as to race, sex, language or religion.]