1 in 5 British Muslims surveyed have used a food bank since August 2021

Introduction

Mid-2021 – As the world seemingly began to emerge from the grip of the COVID-19 pandemic, the UK plunged into crisis as a combination of various domestic and geopolitical factors caused inflation to soar, energy costs to see unprecedented price increases and prices for household items to jerk forward. Against this backdrop, wages struggled to maintain their real value and the UK population began to experience a real cost of living crisis. 

Notable research has been conducted to understand the impact of the crisis on the wider population of the UK though limited data exists exploring the impact on minority communities – both ethnic and religious. To determine the impact on the Muslim community, findings must be extrapolated from studies with a much broader remit. 

For instance, The Institute for Fiscal Studies noted that in April 2022, the annual rate of inflation for the poorest 10% of households is 3% higher than the richest 10% of households – 10.9% as opposed to 7.9%. The British Muslim population sits at the intersection between low-income, working class and urban communities that have less liquid assets to absorb rising costs. Similarly, with 50% of the Muslim population considered to be in poverty, compared to 18% of the national population, based on data collected between 2009-11, it is likely that the community is disproportionately represented in the poorest 10% of households.

Furthermore, research from the New Economics Foundation noted that Black, Asian and other minority ethnic households will experience an increase in their cost of living that is 1.6 times higher than their white counterparts as a proportion of their income. With over 90% of the 3.3million British Muslim population being comprised of minority ethnic communities, preliminary data suggests that the British Muslim population will be disproportionately impacted by the cost of living crisis. 

To fill this data gap, Muslim Census surveyed 1,568 Muslims aged 18-65+ living in the UK to explore their experiences through the cost of living crisis and how the experience of the past year has impacted various facets of their lives – from their mental well-being to their savings and ability to afford household bills and expenses. It is worth noting that the crisis is far from over this study has explored what could be just the early stages of the crisis with it expected to continue and its impacts to become more pronounced. 

Comprehensive and targeted change can only be accomplished through clear and precise data sets. With the data from this survey, Muslim Census aims to empower community changemakers and policymakers – from grassroots organisations to the national Government – in developing the initiatives to enact these changes.

This study has been made possible thanks to the support of Algbra and the National Zakat Foundation, organisations at the forefront of encouraging financial literacy and social mobility for British Muslim communities. 

This summary report and the associated research study were designed and written by Mai Shehab, Nazim Uddin and Hudeyfa Nur. For any queries regarding the content of this report, please contact team@muslimcensus.co.uk.

Handling Rising Costs

The primary impact of the cost of living crisis and the rise in inflation is the difficulty experienced by the entire population in affording their bills. This is particularly prominent across the British Muslim community where 54% of Muslims noted some level of difficulty when paying at least one of their household bills since August 2021 whilst 13% experienced difficulty every single month in the same period. This increases to 64% of Muslims with household incomes of £20,001-£30,000 although only 19% of those with household incomes above £100,000 experienced difficulty in paying at least one of their household bills. 

More than half of all British Muslims have experienced difficulty in paying at least one bill in the last year 

Data from the Financial Conduct Authority indicates that people from ethnic minority communities, particularly the black community, are experiencing more difficulty compared to their white counterparts with 27% of black people saying they found it a heavy burden to keep up with bills compared with 15% of all UK adults.⁴ In a similar vein our data suggests that since August 2021, 66% of the British Black African Muslim community in the UK have experienced difficulty in paying their household bills – notably higher than any other ethnic minority community. Similarly, 1 in 5 British Black African Muslims struggled to pay at least one of their bills every month compared to 13% of all those surveyed. 

With respect to which household bills Muslims have experienced the most difficulty in affording, of those who struggled, more than 75% experienced difficulty in paying for gas, electricity, household groceries and clothing.

It is worth noting that 54% of all Muslims noted some level of difficulty in paying their energy bills in the last three months. This compares to 1 in 3 people at the national level who experienced the same difficulty in the same period according to a study carried out by Ipsos or 42% of people according to data collected by the ONS.

The disproportionate impact of the crisis on low-income Muslim households continues as over 60% of Muslims with household incomes between £10,001-£30,000 noted difficulty in affording their energy bill in the last quarter compared to 1 in 5 British Muslims with household incomes of over £90,000.

Similarly, over 10% of those surveyed noted that they lived in social or council housing whilst a further 40% indicated that they were in receipt of some form of benefits. In both groups, over two-thirds of Muslims noted that they have experienced difficulty in affording at least one household bill.

Likewise, British Muslims with Pakistani heritage, who make up the largest ethnic group within the British Muslim population, experienced the most difficulty in their ability to afford their energy bills in the last three months. Notably, according to data collected by the Government, 76% of households from the Pakistani ethnic group were in the two lowest income quintiles (£13,300-£20,500) – this is the highest percentage out of all ethnic groups whilst 10% of Pakistani households were in the 2 highest income quintiles (£35,700-£54,000+) – the lowest percentage out of all ethnic groups. 

 65% of Muslims had to take out some form of debt to manage everyday costs and bills 

To manage these difficulties, 65% of all Muslims have had to take out some form of debt to accommodate their everyday costs and bills since August 2021 – whether this was reliance on their credit cards, utilising an overdraft or a buy now, pay later scheme or having to take out a long term or pay-day loan. As expected, Muslims with low household incomes, those in receipt of benefits or in social and council housing are all disproportionately impacted. 

Similarly, in a further attempt to manage rising costs, 40% of British Muslims have had to choose between paying one bill at the expense of another since August 2021. This remains consistent across age, ethnicity and location though for Muslims in part-time employment and those in low-income households, this trends at over 50% having to choose between their bills at some point in the last year. Perhaps more interestingly, Muslims who are homeowners with Islamic mortgages are almost twice as likely to have to choose between bills with 56% having to choose as opposed to 31% of homeowners without a mortgage and 39% of Muslims with a conventional mortgage.

Food Banks and Zakat

Almost 1/3 of Muslims living in the UK have had to miss a meal to afford their household bills in the last year.

Further to the ability to afford and pay the rising costs and bills, the crisis has impacted several areas of the day-to-day lives of millions. Indeed, 29% of Muslims have had to miss a meal to afford their household bills within the last year. A quarter of those Muslims reported that they have had to miss meals every month. Muslim men appear to be harder hit than Muslim women with over 33%, compared to 25%, reported to having to miss a meal. 

British Muslims in the West Midlands and the North West were the most affected where 38% and 40% of those surveyed missed a meal at some point to accommodate their bills compared to 30% of Muslims in London. The disparity between the regions is perhaps unsurprising when considering that the median full-time income in London is over 32% more than that it is in either the West Midlands or the North West.

Muslims in social and council housing are once again disproportionately impacted where over half of Muslims reported having missed a meal. Interestingly, Muslim homeowners with an Islamic mortgage, as opposed to a traditional mortgage, were considerably more likely to have missed a meal with 64% reporting as such. 

Perhaps more concerning is that 19% of all British Muslims have relied on food banks in the last 12 months, with the majority of those – 65% – using food banks within the last 3 months. As is the case with Muslims who have had to miss meals, Muslim men are noticeably more impacted where 23% of men used a foodbank in contrast to 15% of Muslim women – it is unclear from the data why such disparities exist. 

Young Muslims are also at a considerably higher risk of having to rely on food banks with 30% of Muslims aged 18-24 noting use at some point in the last year compared to 20% of Muslims aged over 45. It is then unsurprising that 1 in 4 Muslims who are students or part-time workers, in which there are significant proportions of young Muslims, used a food bank in the last year. 

Furthermore, as expected Muslim households with lower incomes found themselves using food banks far more than those in higher wage brackets. Almost half – 48% – of Muslims with household incomes of between £20,001-£40,000 report that they have used a foodbank in comparison to 8% of Muslims with household incomes over £100,000. It’s worth noting that the median household income within the UK sits firmly within the former wage bracket at £30,500. Similarly, Muslims in receipt of housing benefits are 5 times more likely to have used a foodbank than Muslims who are not in receipt of benefits – 9% compared to 45%.

Interestingly, Muslims within the white community are disproportionately impacted with over 30% reporting that they’ve used a food bank in the last year compared to 13% of the Bangladeshi community and 11% of the Indian community. The Pakistani and Black African communities sat slightly above the average at 21% and 22% respectively. 

Further to this, a staggering 1 in 4 British Muslims reported having requested Zakat in the last twelve months. Though this does not necessarily equate to 25% of British Muslims meeting the criteria and thresholds that would allow them to receive Zakat, it does contextualise data from the National Zakat Foundation which noted that requests for support to the organisation increased by 70% in the 12 months prior to March 2022.

Similar trends to foodbank use emerge here where over 20% of Muslims aged 18-24 requested Zakat in the past year in comparison to 20% of those aged 45 or over. Likewise, over 30% of Muslim students or those on part-time or zero-hour contracts have found themselves requesting Zakat compared to 21% of Muslims working full-time.

Again, 26% of Muslims with household incomes of £20,001-£40,000 noted that they had requested Zakat in the last year compared to 8% of Muslims within the highest wage bracket. Furthermore, 45% of Muslims who receive housing benefits requested Zakat in stark and considerable contrast to 15% of Muslims in receipt of no benefits. 

Muslim communities in the North appear to be more significantly impacted with over 27% of Muslims in the West Midlands, Yorkshire & Humberside and in the North West having requested Zakat in the last 12 months, compared to 17% in the South East. 

Similar to foodbank use, Muslims from the white community have requested Zakat the most when represented as a proportion – 28% compared to 19% and 15% for Bangladeshi and Indian communities respectively. Muslims from the Pakistani or Black African communities again sit above the average with 26% and 25% having reported having requested Zakat since August 2021. 

84% of Muslims have had to make changes to their lifestyle as a result of the crisis

Such profound impacts on the financial well-being of British Muslims have continued beyond simply the ability to afford bills and household expenses. Indeed, in an attempt to accommodate rising costs through the cost of living crisis, 84% of Muslims noted several lifestyle changes that they’ve adopted in the last 12 months.

Mortgages, Rent and Debt

The cost of living crisis and the rise in inflation has also impacted the property and personal mortgage industry within the UK where the mortgage interest rate has risen above 6% for the first time since 2008. Such an impact has translated into tangible repercussions for the British Muslim community where over 50% of Muslims with a mortgage or those who pay rent, reporting an increase in their payments in the last 12 months. 

56% of Muslims have seen an increase in rent or mortgage payments of Muslims

Increasing payments appear to be regressive with 61% of Muslims with a household income of £20,001-£30,000 reporting price increases as opposed to 45% of those with a household income of £100,000. Likewise, 73% of Muslims in receipt of housing benefits experienced an increase in contrast to 53% of Muslims who receive no government welfare benefits. 

Interestingly, 70% of Muslims with an Islamic mortgage reported an increase whereas only 51% of Muslims with a standard mortgage noted increasing payments, perhaps indicating a need for affordable credit alternatives within the scope of the ethical boundaries of Islam and Muslims. The risk of increase faced by those with an Islamic mortgage is even more than those experienced by Muslims in social or council housing where 66% experienced increasing rent costs. 

With such considerable proportions of the Muslim community noting rent and mortgage price increases, it is unsurprising that 1 in 2 Muslims have missed or have been late on their rent or mortgage payments since August 2021. Muslims with an Islamic mortgage are again disproportionately impacted where 65% have reported being late as opposed to 33% of Muslims with a conventional mortgage. More dramatically, the former group reported always being late at a rate 5x greater than those with a standard mortgage – 15% as opposed to 3%. 

Of further concern, of those Muslims who have used a foodbank at some point in the last three months, 4 out 5 reported that they were also late on their rent or mortgage payments with close to 20% indicating that they were always late.

Over 50% of Muslims saw their savings decrease in the last year 

The impact on personal finance is also considerable where over 51% of Muslims noted that their savings had decreased during the crisis with this being fairly consistent across location and ethnicity demographics. However, where 45% of Muslim men experienced a reduction in their savings, Muslim women fared substantially worse with 57% indicating that their savings had reduced in the last 12 months. 

Similarly, older Muslims appear to be more affected where two-thirds of Muslims over 45 reported reduced savings in contrast to 42% of those aged 18-24. Similarly, 39% of single-person households noted a decrease in their savings in contrast to 57% of Muslims in households with 6 or more people indicating an increasing reliance on savings to accommodate the household costs of larger households. 

With respect to increases in debt held by Muslims, 45% of British Muslims reported an increase in their debt since August 2021. This remains consistent across all various demographics – including gender, location, ethnicity and income although this rises to 52% of Muslims aged 45 or over compared to 42% of Muslims between 18-24. 

Mental Health and Future Concerns

The cost of living crisis has undoubtedly put an enormous financial strain on Muslims within the UK. It is without surprise then that 60% of Muslims said that they are financially worse off now than they were this time last year. Nevertheless, such strain extends beyond simply financial bounds with more than three-quarters of British Muslims reporting that the crisis has detrimentally impacted their mental health with almost 20% indicating a very significant impact. Such impact remains relatively consistent across age groups, locations and ethnicities. 

Over 75% of Muslims noted a detrimental impact on their mental health as a result of the crisis 

However, this increases dramatically to 82% of Muslims earning between £20,001-£30,000. Likewise, 95% of Muslims on part-time employment contracts experienced a decline in their mental health compared to 78% of those employed full-time once indicating the disproportionate impact of those less likely to have fluid assets and disposable income. 

Muslims in public-facing employment are also at a considerably higher risk of their mental health being detrimentally impacted by the crisis with 93% and 91% of Muslims in the Hospitality or Events industry and in Social Care indicating that their mental health was detrimentally impacted over the last year. 

In terms of a forward outlook, almost 61% of British Muslims noted that their ability to afford their household bills was one of their main concerns about their future financial stability – this increases to 72% of Muslims in social or council housing. Similarly, where 39% identified job security as a main concern, this increases to over 50% of Muslims with part-time employment contracts or zero-hour contracts. 

Though the cost of living crisis has been caused by international and domestic developments largely beyond the control of the general population, including Muslims, the ability to manage the impact of the crisis can be helped through increased financial literacy. The OECD noted that 67% of adults in the UK are assessed as financially literate whereas our research indicates that less than half of Muslims feel informed when it comes to their financial literacy and understanding. Worryingly, younger Muslims feel less informed than their older counterparts with 52% of Muslims over 45 identifying as informed as opposed to one-third of Muslims between 18-24. 

Similarly, how informed Muslims feel also trends upwards with 27% of Muslims with a household income of £10,001-£20,000 indicating that they are informed compared to over two-thirds of households in the highest wage bracket. Similarly, Muslims in social or council housing report the lowest level of financial understanding – 40% – compared to homeowners – 56%. 

 

Though not a direct comparison with the OECD’s findings, such statistics demonstrate the requirement for Muslims to support themselves as a community in building financial literacy – particularly for young Muslims and those with low household incomes. Despite this need, it is concerning to note that only approximately one-third of Muslims are comfortable talking about finances openly with their family, friends or their wider community. Having said that, an overwhelming majority of Muslims in the UK – 73% – would be receptive and interested in community spaces that would facilitate and encourage increased financial literacy within the Muslim community. 

The passages below include some of the testimonies of Muslims and their experiences through the first year of the cost of living crisis: 

The cost of living crisis has personally changed how I feel about spending money on myself and treating myself. I almost feel guilty and worry about how it could get so much worse.

I don’t know where my tax is going. NHS is non-existent, public services and schools are overworked and underfunded yet I’m paying an extortionate amount of tax, it’s daylight robbery.

How do I sound Islamic choices regarding mortgages and loans when interest rates are so high and the Islamic alternatives are often more expensive?

Very worried, and also worried about people who have less than me and my kids and how they will cope in the future.

My hope of owning a house on my own has now gone, I have 2 dependents who get no benefits and the cost of food/energy increasing – worried about my long-term financial management

I once asked my local mosque if I could access zakat payment from them in order to feed my children. I was told clearly that no one in the UK can be that needy so all their zakat collections go towards efforts to alleviate poverty abroad. I was at my lowest point but as a single mother, my voice could not be heard. Alhumdulillah, still alive and missing meals with a smile.

A word from Algbra 

Algbra was founded to help our most diverse communities spend, save and grow their money with an ethical finance platform that deeply understands them and caters to their needs. We know the current financial system is not doing enough for those very communities and this report highlights how one such community is disproportionately affected by the cost of living crisis. 

It’s why Algbra, with our community-first approach, has embarked on transforming how financial services should be done. We started an initiative called Chai Mama, a regular session to equip mums, and women more generally, with the knowledge they need to feel confident and empowered in all of their financial decisions. This resonates with the findings from the report highlighting the gendered impact of the cost of living crisis, disadvantaging women. And the overwhelmingly positive feedback we have received has shown us how crucial it is to run these financial well-being sessions, with requests for us to run in-depth sessions on the specifics of investment, pensions, and even cryptocurrency.

This report also echoes findings from a report Algbra authored with Mastercard entitled “Lifestyle and Values Banking” which highlighted the needs of over 9 million “financially overlooked” consumers that are seeking financial products accommodating their values and beliefs. It’s why Algbra, through its Values and Ethics Policy, has committed to inclusive, ethical and sustainable digital financial services that empower communities through exceptional products that align with their values. The policy is compliant with Environmental, Social and Governance (‘ESG’) and social impact best practice, as well as Sharia standards. 

But ultimately, the cost of living crisis is a financial one. And we are committed to helping our customers by providing 1% cashback on all of their spend and offering rewards that will make a material difference to their day-to-day lives. We are also excited about the suite of products that will be available to our consumers in the near future, from competitive home purchase plans to non-interest based loans. 

A word from NZF 

Since our inception in 2011, we have distributed £25 million of Zakat to over 45,000 Muslims in need. The principal aim of our intervention is to cover basic financial needs so that those who are struggling get some much-needed respite from their situation and feel cared for by the Muslim community. 

For Muslims facing hardship, we give several weeks’ worth of financial support. The amounts given are based on the work done by the Joseph Rowntree Foundation on the minimum income needed for a basic standard of living. Recently NZF has increased the amounts given to all those in need by a further 15% to cover the increase in the cost of living. 

NZF will also be giving additional payments of £400 to up to 600 households facing rising energy bills during the coming winter months. The payments support families most affected by the spiralling cost of living but do not attempt to solve more entrenched problems within the social security system. 

Any Muslim in need can apply for help in four areas: Hardship Relief, Housing, Work and Education. The NZF team carefully checks the identity, financial situation, and eligibility for Zakat of every applicant. In order to help recipients quickly and to preserve their dignity, NZF makes direct cash transfers wherever possible. Recipients who don’t have a bank account can pick up their cash transfers from the UK’s network of Post Offices.  

Recent figures illustrate that an overwhelming majority of applicants – 97% – agree that the help from NZF has helped them feel closer to the Muslim community. In addition, 95% agree that the help from NZF has increased their faith and 86% agree the money they have received has helped them get their finances back on track. These findings support the positive impact of Zakat in building a thriving, closer Muslim community in the UK. 

Methodology and Limitations

This survey was conducted among 1,568 Muslims in the UK aged 18-65+. The interviews were conducted online between September 14 2022 – October 10 2022. The majority of responses – 1,154 – were obtained through email invitations whilst the remaining responses were obtained through the various social media channels of Muslim Census and through our partner organisations. 

The results of any sample are subject to sampling variation. The margin of error varies based on the size of the sample. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3% from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. 

To increase the accuracy of the sample, overall statistics have been weighted by gender to ensure that the male-to-female ratio for Muslims in the UK according to this study is similar to that recorded by UK Census data of 2011. 

However, controlling for all variables is challenging. For instance, as the interviews were conducted exclusively by an online survey in English, considerations of access to the internet, and various language barriers, amongst others were not accounted for. Similarly, Muslims who have engaged with Muslim Census as an organisation and have completed previous interviews are more likely to have responded to this particular survey. This may potentially skew the results in favour of Muslims who are politically engaged, educated to Level 4 or higher, have an online presence in some capacity and are English-speaking. 

Overall, however, given the large sample size which has considerable location, age and ethnicity coverage, we can be confident that this study provides valuable insight into the experiences of British Muslims through the cost of living crisis.

Data Tables

Ethnicity	No. of Responses / % of Sample
Bangladeshi	321 (20%)
Pakistani	580 (37%)
Indian	169 (11%)
Other Asian	66 (4%)
Black African	119 (8%)
Arab	94 (6%)
White	106 (7%)
Black Caribbean	9 (1%)
Mixed	55 (4%)
Black other	5 (0.3%)
Prefer not to say / Other	44 (3%)

Age	No. of Responses / % of Sample
18-24	520 (33%)
25-34	490 (31%)
35-44	330 (21%)
45+	224 (14%)
Prefer not to say / Other	4 (0.2%)

UK Region	No. of Responses / % of Sample
London	696 (44%)
West Midlands	200 (13%)
Yorkshire & Humberside	143 (9%)
North West	177 (11%)
South East	83 (5%)
East	40 (3%)
East Midlands	92 (6%)
South West	35 (2%)
North East	25 (2%)
Scotland	39 (2%)
Wales	30 (2%)
Northern Ireland	2 (0.13%)
Prefer not to say / Other	6 (0.38%)

Gender	No. of Responses / % of Sample	Weighted No. of Responses / % of Sample
Male	644 (41%)	811 (52%)
Female	920 (59%)	754 (48%)
Prefer not to say / Other	4 (0.26%)	3 (0.1%)