The Children’s ISA was the first to launch the UK’s first Shariah junior ISA when the new tax-free savings investments became available in November 2011.
Backed by Scottish Widows Investment Partnerships, the Children’s ISA Shariah model means investments are made under strict Shariah Law and Islamic investment guidelines allowing Muslims to also take advantage of the junior ISA scheme.
“With the cost of university fees and concerns that many of our children will be unable to own their own homes, junior ISAs are a great way to save at no risk and get tax savings,” said David Dawson, Savings Director from the Children’s ISA.
“We have now teamed up with Scottish Widows Investment Partnership to launch a Shariah model because their reputation is unrivalled in this field and we felt it important that we offer our Muslim customers the chance to invest in a Children’s ISA.”
| Account name | Initial fee | Management fee | Minimum deposit | Transfer in |
|---|---|---|---|---|
| Shariah Junior ISA | 5.00% | 1.60% | £50 per month or £500 lump | Yes |
- Invests in line with Islamic Investment Guidelines
- One of Europe’s largest asset management companies
- IPad2 Competition – a prize draw to win a IPad2
Read more about the Shariah Junior ISA on the Children’s ISA website
The Shariah model invests in companies on the Dow Jones Islamic Stock Index and investments are also screened through The Shariah Advisory Board, ensuring they meet the strictest ethical investment principles.
Why choose Scottish Widows Investment Partnership for Shariah investing?
Apart from the fact that SWIP, a major global investor, is one of the UK’s largest asset management companies, with £146.1 billion of funds under management, they have also created a framework for supporting investment according to Shariah principles. This consists of a disciplined screening process designed to exclude non-compliant equities and an advisory board to rule on the suitability of individual investment ideas.
Islamic investment guidelines and other non-Islamic income Investment restrictions
In accordance with Islamic principles, investments in the following industries are forbidden:
- gambling
- tobacco
- the production or sale of pork products
- the production of intoxicating liquor
- arms manufacturing
- cinema, and all media that contain pornographic material such as broadcasting, videos and DVDs
- non-Islamically structured banking, finance, investment or life insurance business, or any other interest related activity.
Investable criteria
Companies invested in must also adhere to the following guidelines (subject to confirmation from the Shariah Advisory Board):
- interest revenue shall not exceed 5% of total revenue
- non-Islamic structured borrowing must not exceed 30% of the total market value
- of the company’s stock
- cash plus accounts receivables plus interest bearing assets shall not exceed 30% of the company’s adjusted total assets.
- Each company shall be comprised of 51% non-liquid assets.
SWIP Islamic Global Equity Fund
The Fund is designed to provide investors with:
- an investment solution that complies with Shariah Law and Islamic Investment Guidelines
- a Fund that is grounded in ethical investment principles
- opportunities for competitive returns by investing in a diversified portfolio of global equities
- the potential for long-term capital growth
- access to some of the world’s top performing companies across global markets and sectors
- access to SWIP’s global investment expertise.
Recent reports* have found that Shariah investments can net on average between 10-15% growth but just 5% growth over 18 years using the full £3,600 allowance can net £115,000. – a substantial pot of money that will fund more than just their time at university. As of 5th April 2013 the limit has risen to £3,720.
*Source: Financial Times June/July 2010
Please note that both Muslims and non-Muslims can invest in Islamic finance.
For further information, visit the The Children’s ISA website and apply for the Shariah Junior ISA
