Alburaq has launched a Shariah compliant capital protected savings product.
The product, which is offered in partnership with Bank of Ireland, will allow savers to deposit a minimum of £500 with Bank of Ireland for five years in an account structured according to the Islamic principles of Wakala.
At maturity, savers will receive their initial capital back together with 100% of any gain in the performance of a basket of 20 shares in global companies selected from the Dow Jones Islamic Titans 100 Index.
Keith Leach, head of alburaq at ABC International Bank, says there is still limited availability of Shariah compliant savings products in the UK, as Islam restricts the kind of companies deemed acceptable.
“This new account is an easy way for Muslim savers to gain exposure to the equity markets, in a secure way. While it is considered permissible within Islam for Muslims to own shares, there are restrictions on the type of companies that are considered allowable,” he says.
“The companies must not be over reliant on debt nor must they be engaged in activities that conflict with the principles of Shariah. Many of these principles will be similar to those required by ethical investors.”
Pension savers need to engage with their retirement options far earlier than is currently normal to ensure they save enough through their lifetime, according to a report from the Association of British Insurers (ABI).
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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