Common questions

Yes. The guides, calculators, glossary and weekly email are free. Some links to providers may pay us a fee. That never changes what we say or the order of a table, and paid content is labelled.

No. It’s UK personal finance with an Islamic twist, and most of it applies to anyone.

No. It’s education. We explain how things work so you can decide for yourself. We can’t tell you what suits you personally, and questions of ruling are for a scholar you trust.

Start here puts the steps in order, from stepping away from interest to zakat and a will. The order matters more than picking the perfect product.

Any increase charged on a loan or debt, usually translated as interest or usury. The Qur’an prohibits it, which is why Islamic products use trade, leasing, partnership or agency instead of lending at interest. The contracts explained.

The contracts differ in who owns what and who carries the risk, which is what scholars look at. Critics point out that prices often track conventional rates, and some structures, such as organised tawarruq, are disputed. Read how a product works before deciding it satisfies you.

Islamic banks compete in the same market for the same customers and funding, so their expected profit and rental rates tend to follow the wider market. Following a market price isn’t the same as charging interest.

In a mudaraba you and the bank share profit in an agreed ratio, and a loss falls on the money you put in. In a wakala the bank acts as your agent for a fee and aims for an expected rate. More on both.

Each provider appoints a Shariah board of scholars, who review its products. Look for the board’s names in the provider’s documents, not just the word “Islamic”.

What an Islamic savings account expects to pay you, in place of interest. Banks aim to pay it, but it isn’t guaranteed in the way interest is. What “expected” means.

Yes, as at any UK bank. Eligible deposits are protected by the FSCS up to £120,000 per person, per banking licence. Accounts opened through Raisin are held with the named bank, so the same limit applies there.

Under a profit-sharing account, a loss would in principle fall on depositors. UK rules treat these accounts as deposits, so banks offer to make good any shortfall, and some customers turn that offer down on religious grounds.

It’s generally treated like interest for UK tax, so your personal savings allowance applies. A Cash ISA shelters it completely.

An ISA is a tax wrapper, so it depends on what’s inside. A high street Cash ISA pays interest. An Islamic Cash ISA pays expected profit. The full answer.

Yes. Islamic banks in the UK take customers of any faith or none.

Usually a home purchase plan. You and a provider buy the home together, then you buy its share bit by bit and pay rent on the rest. How it works.

Yes. Plans for a home you live in are regulated by the FCA, so you get the same kind of protections as with a mortgage. Buy-to-let plans generally aren’t.

No. Special rules stop stamp duty being charged twice when the provider buys the home with you. Your solicitor deals with it.

Sometimes. Compare the rate and every fee at the same deposit and term. Today’s rates.

It varies. Some providers go up to 95% finance to value for UK residents, though rates usually improve as your deposit grows. StrideUp asks for at least 15% on its plans for your own home.

Usually, but check for early settlement charges during a fixed period, and any yearly limit on overpaying. Overpay or invest?

Clear anything that charges you interest and build some emergency cash first. Then choose an account, such as a Stocks and shares ISA, and a broad shariah-screened fund. The order to do it in.

A conventional index fund holds every company in the index, including banks and others that fail Shariah screens. Islamic index funds track a screened index instead.

Look for a named Shariah board or a recognised index methodology, and read what it holds. A ten-minute check.

Screens look at what the company does, then test its debt, cash and income against limits. Our share screener shows the AAOIFI, S&P and MSCI tests side by side.

Giving to charity the small share of an investment’s income that came from impermissible sources, such as interest a company earned. Some funds do it for you, and some leave it to you.

Owning part of a real business and sharing its profit and loss isn’t gambling. Short-term speculation and some derivatives are a different matter, and scholars treat them differently.

Probably not by default, because default funds generally aren’t built with shariah in mind. Many schemes offer a shariah fund you can switch to. What to do.

Not before checking your options. Opting out usually means giving up your employer’s contributions. Switching to a shariah fund inside the scheme keeps them.

Usually, within the same scheme, by changing your fund choice. Moving to another provider is possible too, but check for fees and any guarantees you’d lose.

When your qualifying wealth has stayed at or above the nisab for a full lunar year. Many people pick a fixed date, such as a day in Ramadan, and do the sum then.

No. It’s 2.5% of qualifying wealth such as cash, gold and silver, shares and trade goods. Your home, car and belongings don’t count. Once you reach the nisab, it’s 2.5% of all of it, not just the part above the threshold.

Both are recognised. The silver nisab is much lower, so more people pass it, and many Hanafi scholars use it when wealth is a mix of cash and other assets. Ask the scholar you follow. Work it out.

Scholars differ. The National Zakat Foundation counts the zakatable assets inside a defined contribution pension each year. Others say nothing is due until you can take the money out.

The Hanafi school says yes. The Shafi’i, Maliki and Hanbali schools generally say no for jewellery worn for personal use.

Yes. Many people pay in instalments through the year. What matters is that the total covers what’s due by your zakat date.

Not to your parents, grandparents, children or grandchildren. In the Hanafi school, not to your husband or wife either. Other relatives in need, such as a brother or sister, can receive it, and scholars say it carries extra reward.

No. Your zakat is what you give. The 25p is tax HMRC returns to the charity. Gift Aid and Ramadan giving.

Before the Eid prayer at the end of Ramadan, for yourself and the people you’re responsible for. UK charities publish a set amount each year.

Fidyah is a payment to feed someone in need for each fast you can’t make up, for example through long-term illness. Kaffarah is the heavier penalty for deliberately breaking a fast without a valid reason.

Yes, if you want Islamic shares to apply. In England and Wales, without a will the intestacy rules decide who inherits, and they take no account of Islamic shares. Why it matters.

Close family take fixed shares set in the Qur’an, and what’s left goes to the nearest male relatives on the father’s side, with daughters and sisters alongside them. Who gets what.

Not through your will, because a bequest can’t go to an heir unless the other heirs agree. You can give gifts in your lifetime, and scholars urge fairness between children.

Not on its own in England and Wales. Without a civil registration, a spouse may have no rights under the intestacy rules, which makes a will even more important.

What passes to a spouse is generally free of inheritance tax, so leaving the rest in Islamic shares to other heirs can mean more tax than leaving everything to a spouse. A solicitor can plan for it.