Q: When should Zakat be paid on a defined contribution pension scheme?

A: Zakat on a pension fund is due immediately with the rest of one’s Zakat. However, if the Zakat payment is relatively large, one may spread these payments out across the year and pay in advance of one’s Zakat anniversary. On one’s Zakat anniversary, a Zakat calculation must be made to ensure the total Zakat liability has been paid.

If the Zakat payment on the pension savings is beyond one’s financial capacity and brings genuine difficulty to oneself, one should pay whatever small amount they can at present. In addition, they should keep a record of what is outstanding and intend to pay it off in the future when finances permit.

And Allah knows best!

Mufti Faraz Adam