Question
What zakat do i have to pay on my personal pension. The money i put in is not compulsary. I put in £3600 each year in my pension. Half the pension fund is invested in a property fund the other is invested in ethical shares. The value of the pension fund increases more than the £ 3600 each year. Do i pay zakat on the total value of pension fund each year?
My secound question is that my wife is a school teacher in england, she has pension through the govermnent. The value of her pension is not known. Her pension is paid when she retires as is eqivalent to her final salary. The pension is taken out from her wages directly and the money is not invested?. The contribution she makes each month is not compulsary.
Answer
1. In principle, if the pension fund invests your contribution in a company that deals in buying and selling, then Zakaat is due on the capital amount amount as well as on the profits. If the pension fund invests in a company that does not deal in buying and selling, for example, the company hires out rooms, then Zakaat is due only on the dividends and not on the capital amount. We are not sure whether the property fund deals in buying and selling or deals in hiring. We also do not know the details of the ethical shares. You may, however, apply the above mentioned principle.
2. Zakaat will be due on your wife’s contribution to the pension fund. She does not have to pay Zakaat on the government’s contribution to the pension fund. In both situations, your pension fund as well as your wife’s pension fund, the other laws of Zakaat must be taken into consideration. In the main, there must be at least the minimum Nisaab of Zakaat or more for one whole year. If you have a liability equal to or more than the minimum Nisaab of Zakaat, then Zakaat will not be due.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai
As sallam Alykum:
ReplyDeleteI have a pension plan in which I pay in and my employer pays in equally. It is invested in a fund and I can not control how it is invested in that fund. All I know is that my money is invested in a particular fund. I get an annual summary each year explaining what my expected fund value is going to be when I retire and how much is in my fund right now. I will not get that money till I retire. Do I need to pay zakat on the whole amount I have got in the pension pot?
I also had an old pension plan from another employer which I pay in about 70 pounds each month. There is no employer contributions in that now but there was when I am employed. How do I pay zakat on that?
Thanks.