Contributing to pension schemes

Fatwa ID: 02419

Answered by: Maulana Jamal Ahmed


I am wishing to enrol for my employer's pension scheme. However, I would

like confirmation first to ensure it is halal.

I contribute 10%, and my employer matches it. I believe this is permissible, as it would be considered a gift?

It's really the investment aspect that needs to be reviewed. I invest in the HSBC Amanah fund, and it states it is shariah compliant, but of course from my perspective this needs to be confirmed.



بسم الله الرحمن الرحيم

According to Mufti Shafi rahimahullah, you should refrain from voluntary contribution towards a pension scheme because it has similarities with Riba.  (Nawadir Fiqh p.325 Vol.1)

(Extracted from FatawaRahimiiyah p152 v.3, Nizamul-Fatawa p.213)

With regards to HSBC Amanah, they claim to refrain from all haram investments.

The Fund does not invest in shares of companies whose primary activity involves any of the following goods or services:

  • Alcohol
  • Tobacco
  • Pork-related products
  • Weapons
  • Defence
  • Entertainment
  • Conventional financial services

In addition, the Fund does not invest in companies with levels of borrowings and financial assets beyond levels deemed tolerable by the Shariah Supervisory Committee.

If the company refrains from Riba and other haram products then it should be fine to invest in it.  It is best to refer to the scholars who are members of the advisory board. 

Only Allah knows best.

Written by Maulana Jamal Ahmed

Checked and Approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

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