Q: How is Zakat calculated on a pension?
A: To calculate Zakat on your pension, you need to:
Step 1: Identify the asset class information of your pension fund (see our Zakat on Pensions Guide for more info on www.zakatguide.co.uk/pensions)
This can be done by one of the following ways:
a) Look at the asset allocation on the Pension Factsheet in your statement.
b) Search the name of your pension fund on www.trustnet.com to see the asset allocation and breakdown.
Step 2: Determine the total percentage of Zakatable assets in your pension fund
Add up the percentage of all Zakatable assets in the pension fund.
Step 3: Apply the percentage on the total value of your pension fund
To determine the value of Zakatable assets, apply the percentage of Zakatable assets on your pension fund.
Step 4: Pay 2.5% Zakat on the figure determined from step 3
And Allah knows best!
Mufti Faraz Adam