The Children's Mutual has launched the UK's first Shariah compliant child trust fund. The Shariah Baby bond is a stakeholder account that is targeting 100,000 Muslim families within the UK because it complies with their religious beliefs.
From mid January 2006, the government will be opening an account for families. These accounts will be evenly distributed among the providers that have elected to take them.
For Muslim families, this will probably mean that their voucher is allocated to a child trust fund account that is not Shariah compliant.
Our view
Muslim's are not allowed to recieve or pay interest. Children's Mutual's move alongside those who offer Shariah compliant mortgages is nothing more than a paly on words within a contract. People still get growth on savings and still pay more to buy property when they borrow money.
Best of luck to them all though if that is what is needed to enable all to save and borrow.