Workplace pensions
What a default fund usually holds, what sharia fund options exist, and the trade-offs in switching.
The default fund
Auto-enrolment in the UK places contributions in a default fund unless the member chooses otherwise. Default funds are broad-market and typically hold conventional banks, insurers and interest-bearing bonds — none of which pass an activity screen.
Most large workplace schemes now offer a sharia fund as an alternative, usually an equity fund tracking a screened index. Members are generally not told this at enrolment, so the choice has to be sought out.
What switching costs
A screened equity fund is usually all-equity, so it carries more volatility than a default fund that shifts towards bonds as retirement approaches. Charges are often higher, and the choice of funds narrower. Employer contributions are not affected by the switch.
Those are trade-offs to weigh, not reasons either way. Sahn does not recommend a fund, and the scheme's own documents and a qualified adviser are the right places to take this.