Once a year, three things deserve your attention: zakat calculation, purification, and a brief portfolio review.
Step 1: Calculate your zakat
The nisab in 2024 is approximately £4,500 (based on the gold nisab). If your total zakatable wealth — including investment accounts, cash, and business assets, minus liabilities — exceeds this, you owe 2.5% of the total.
Yusuf has £8,000 in his halal ISA, £2,000 in a current account, and no debts. Total zakatable wealth: £10,000. His zakat: £10,000 × 2.5% = £250. He uses a dedicated zakat calculator (NZF, National Zakat Foundation) to confirm the exact amount, then pays it to a verified charity.
Step 2: Calculate your purification amount
Check your platform or the ETF's annual purification rate. Multiply your total return for the year by that rate. Donate the result.
Fatima earned £600 on her ISWD holding. The published ISWD purification rate is 1.2% of income. Her purification: £600 × 1.2% = £7.20. She adds this to her sadaqah for the year.
Step 3: Review your portfolio briefly
- Is your monthly contribution still appropriate for your income?
- Has your goal changed — for example, are you now closer to needing the money?
- If you hold multiple funds, has one grown disproportionately large? Rebalance if so.
- Are you still comfortable with the platform's fees?
The review should take less than 30 minutes. You are not looking to make frequent changes. You are checking that nothing fundamental has shifted.
Zakat is one of the five pillars of Islam — a binding religious obligation. Purification is generally considered recommended. Together, they ensure your wealth remains clean and that a portion circulates back to those who need it. Investing and fulfilling these obligations simultaneously is not a contradiction — it is their point.