Sharia pension plan
Invest in line with your faith without sacrificing pension pot growth with our Sharia pension plan.
A pension aligned with your faith
Muslims represent a quarter of the world’s population, yet less than 1% of global financial assets are Sharia-compliant.
By selecting the Sharia plan, your pension contributions are invested in a wide range of funds and companies that operate in a Sharia-compliant manner.
The Sharia plan has one simple all-in fee*. You'll only pay an annual fee of 0.88% for savings under £100,000, or 0.53% for any amount over £100,000.
* The fee includes a 0.2% subsidy from Penfold, following the restructure of the underlying HSBC fund, which will expire on August 30th. We are currently working on extending this or finding another fund at the same price, but the fees on this plan may increase. We will provide at least one month notice for any such change.
How is the fund Sharia-compliant?
Each fund within the Sharia plan has its own elected board who monitor the fund, its investments and the managing directors to ensure that they're being Sharia-compliant the whole time.
All major decisions have to be approved by the board. The board creates an annual Sharia certificate, to evaluate how the fund has adhered with Sharia principles, to prove that it is fit as a Sharia-compliant fund.
Islamic philosophy prioritises ethical investment, which means that Sharia-compliant funds don’t generate an income from unethical or non-halal means.
The Sharia board makes sure it restricts or excludes investment in industries such as alcohol, tobacco, pork, finance sector, weapons and adult entertainment.
The Sharia plan allows for up to 5% of income to come from non-compliant means, which is ‘purified’ and donated to community charities that support positive social change which is chosen by the Sharia board.
Islamic finance says that financially benefiting from lending, receiving or exchanging money is unfair and can create inequality. This is why no interest is earned or paid within a Sharia-compliant fund.
Instead, wealth is made by profits from trade and investment, rather than interest. This means that the assets in the Sharia fund are placed in a checking account which restricts earning interest on the money in the account.
Islamic finance rejects uncertainty because a risky investment could potentially involve selling goods and assets of uncertain quality, which goes against the Islamic principle of certainty and openness in business dealings.
This means a Sharia fund doesn’t use complex investment methods and instruments that could involve greater uncertainty, risk and speculation such as derivatives. Instead, the fund instead invests in listed company stocks, to make sure all transactions are clear and identifiable.
Where is the fund invested?
The Sharia plan invests solely in company stocks. This means that there is a higher growth potential over the long term, however there may be larger ups and downs along the way.
The plan invests in companies around the world, with with 75% in North America, 14% in Europe and 4% in Greater Asia.*
The plan invests across a wide range of industries, including 32% in Technology companies, 17% in Healthcare and 14% in Consumer Cyclical. The fund doesn't invest in Real Estate or Utilities.*
Figures correct as of March 2023.
In collaboration with HSBC
We're proud to collaborate with one of the world's largest asset managers, HSBC, for customers looking to invest their savings in line with Islamic principles on finance.
The plan invests in the HSBC Islamic Global Equity Index Fund and is a great option for those that are looking for a socially responsible way to invest their money under Sharia law.
As the plan sits on level 5 out of 7 on the risk and potential reward scale it means that the fund is also great option for those who are a long way from retirement, looking for strong, long-term growth and don’t mind ups and downs in value each year.
Have your say
The entirety of the Sharia plan is made up of stocks, which may include a small stake in companies like Apple, Microsoft, or Google. Most pension providers don't let you see which companies you're invested in.
Our view is that it's your money, you should know where it is. That's why our Explore Your Pension feature gives you complete visibility into your investments - including a breakdown of the individual companies you have a stake in.
Explore Your Pension also provides a platform for voting at issues raised at company AGMs. You can also see your vote history, how the majority of Penfold savers voted, and the vote result. Even better, it's completely anonymous.
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