Zakāt on UK pensions and ISAs

Pensions and ISAs hold most of British Muslims' savings. The rules are simpler than they look once you split things into their real categories.

Final-salary (defined benefit) pensions

You do not own a pot. You own a promise of future income. No Zakāt is due until the money is actually paid to you. Once payments begin, whatever you have saved from them on your Zakāt day counts like ordinary cash.

Workplace pensions and SIPPs

Here you do own an invested pot. Following Zakat Made Easy, pay each year on the zakatable portion of the fund, commonly about 25%, or your fund's own published figure. Some scholars allow deferring until you can access it; the calculator supports both treatments.

Cash ISAs

An ISA is only a tax wrapper. A cash ISA is fully accessible savings, so count the whole balance, just like your bank account.

Stocks & Shares ISAs

Same wrapper logic. The investments inside follow the normal rules: full value if you actively trade, or the zakatable ratio (about 25%) if you hold long-term.

Lifetime ISAs

The 25% government withdrawal charge before 60 (except for a first home) makes a LISA feel like a pension. Treat it like retirement savings, annual Zakāt on the zakatable portion, or defer if you follow that view.

Premium Bonds

The bonds themselves are your money held with NS&I, so their face value is zakatable. Whether the prize draw is permissible is a separate, debated question. Ask a scholar you trust.