My old work friend Alan Chaplin has directed me to an opportunity for CDC which I hadn’t the imagination to see myself. Islamic people , planning for their retirement and a retirement income may need a Shariah pension.
Interesting – seems you and Claude are right corporate-adviser.com/analysis-sha…
CDC gets a mention as being a possible solution – @henrytapper.bsky.social this might be of interest if you’re not already aware.
— Alan chaplin (@alanchaplin.bsky.social) April 18, 2026 at 7:31 PM
The gist of Muna Abdi’s article is this
Annuities are not compatible with Islamic finance rules because they rely on interest-based mechanisms to provide a fixed income.
This leaves he UK’s Muslim population is ageing with 300,000 recorded over 60s in 2021, and another 300,000 expected to reach that age by 2030. They are increasingly reliant on retirement saving (housing is not the growth option it was). Shariah funds exist in most workplace pension schemes but decumulation looks tougher, without a sharia option, Muslims are reluctant to use retirement funds as pensions.
Recent surveys carried out by Islam Channel and Islamic Finance Guru indicate large proportion of Muslims who do not have insurance and pension have cited Shariah compliance issues as the reason.
Muna continues
Of the Muslims that enrol in their workplace pension – approximately 40 per cent cited that the pensions offered by their employers did not offer a Shariah compliant option. This clearly highlights that a large number of Muslims are either avoiding pensions altogether or feeling forced to compromise their beliefs. This situation not only affects individuals’ financial futures but also has broader social and economic implications.
This is one for the Pensions Commission but it may be one for a CDC Proprietor willing to offer a Sharia section of a scheme or maybe a Shariah CDC scheme (though that sounds too exclusive for CDC).
“Annuities are an insurance policy that does not comply with interests and risks. But something that looks and feels like an annuity, I believe exists overseas. There is flexible drawdown, with fixed income that is compliant. There’s a CDC framework now that we can use to design something in decumulation that gives us a lot more flexibility around the underlying investment. DB income is compliant.”
A Shariah section of a CDC scheme could operate an investment policy and comply with other Sharia principles (avoiding annuities and interest based solutions).
Shabna Islam of Hymans Robertson tells Corporate Adviser
..exploring the CDC framework could help design a more flexible, Shariah-compliant alternative to annuities in the UK
My initial reaction as I consider how to build a CDC scheme for 2027 is that simply offering a CDC choice at retirement will be too expensive for the scheme – too lacking in potential take up and yet another choice for Muslim savers that the article accepts are not experienced in taking DC pension choices (who is?)
Brian Hill of Islamic Wealth Management and Rob Reid, known to this blog, point out that it is up to both sides of the provider and Muslim practices to work together
Robert Reid questions why the issue has been overlooked, stating:
“Given the lengths that were gone to accommodate the Plymouth Brethren with pensions freedoms, one wonders why this hasn’t received more attention before now.”
Meanwhile
Hill emphasises that the challenge is not just on the providers’ side but also within the Muslim community itself, which, he argues, needs more education on financial products to create demand for compliant solutions.
I suspect that a section of a CDC UMES pension scheme would work. There needs to be commitment from employers with Muslim staff and drive from the Muslim community. This is going to take some organising but I’d be happy to discuss how this might work if some of the names quoted in this article can meet ( I can offer meetings with the Pensions Mutual team).
So if you are quoted on Muna Abdi’s article – I’m sure I can find time to be in touch and explore further! henry@agewage.com or henry@pensionsmutual.co.uk