Scottish Widows Workplace Shariah Complaint Pension Plans


Question for our Mufti Faraz Adam

I was auto-enrolled into my workplace pension scheme. I contacted HR to opt me out again as this isn’t shariah compliant. I explained my views and my company was happy to carry out some research to find a shariah-compliant pension scheme to suit my needs.

I was sent two options from Scottish widows; Are any of the below shariah compliant?

  1. Scottish Widows Ethical Pension (Series 2)
    Not too sure if this is screened by a Muslim but it only invests in ethical stocks. I assume this isn’t permissible as it may not be screened through the Islamic lens?

  2. Scottish Widows Specialist Global Equity Pension (Series 2)
    “The Fund will invest wholly into the HSBC Islamic Global Equity Index Fund.”
    This is what Scottish Widows state as their shariah-compliant fund. Are you in agreement?

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Second this question. I’ve just started a new role which uses Scottish Widows as the pension supplier and therefore have the same issue. Can we have some clarity on the permissibility of these two options? JazakAllahu Khayr

Salaams brother Yasin,

I did a bit of research myself and have come to the conclusion of both options, as below;

  1. Option 1, although being an ethical pension scheme, as we don’t know if it is (probably isn’t) screened by a muslims or according to our shariah principals then we would have to deem this as impermissible (or doubtful). I have chosen to stay away.

  2. Option 2, After research I have found that this pension scheme is halal as it is in line with our shariah principles. Scottish widows refer this scheme as their shariah compliant option. I was also told (not fact checked) that this has been approved by our Mufti Taqi Usmani.

So definitely go for option 2!
Please also do your own research. If you come to the same conclusion as me then please do let your fellow muslim friends and family know too. So they can change their pots immediately, if they haven’t already done so.

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