An Islamic SIPP adheres to Shariah principles by investing only in assets that are compliant with Islamic law. This means avoiding investments in prohibited industries (alcohol, gambling, conventional finance, etc.), avoiding interest-based transactions (riba), excessive uncertainty (gharar), and ensuring that investments are backed by real assets. All investments undergo rigorous screening by qualified Shariah scholars to ensure compliance.

Yes, in most cases you can transfer existing UK pensions into our Islamic SIPP. This includes workplace pensions, personal pensions, and other SIPPs. The transfer process is straightforward, and we handle most of the paperwork for you. However, we recommend careful consideration before transferring out of defined benefit (final salary) schemes, as these often have valuable guaranteed benefits that would be lost upon transfer.

Property investment within a SIPP can work in several ways. You can directly purchase commercial property (including offices, retail units, and industrial properties), invest in property funds, or participate in collective property ownership schemes. The property is held within the SIPP structure, with rental income and any capital gains flowing back into the pension tax-free. For direct property purchases, the SIPP becomes the legal owner of the property, and all associated costs (maintenance, insurance, etc.) are paid from the SIPP.

Property SIPPs offer significant tax advantages. Contributions benefit from tax relief at your marginal rate (up to 45% for additional rate taxpayers). Within the SIPP, rental income and capital gains are tax-free. When you reach retirement age, you can take up to 25% of your pension pot as a tax-free lump sum. If you purchase a commercial property through your SIPP, there's no capital gains tax when you sell the property, and rental income is received by the SIPP without income tax deductions.

Generally, you cannot access your pension before the minimum pension age, which is currently 55 (rising to 57 from 2028), without incurring substantial tax penalties. There are limited exceptions for cases of serious ill health. This restriction applies to all UK pensions, including Islamic SIPPs, and is part of the regulatory framework that provides the tax advantages of pension saving.

Our Islamic SIPP can be opened with a minimum investment of £5,000, or £3,000 with regular monthly contributions of at least £100. For direct commercial property investments, a more substantial investment is typically required (usually £50,000+), although our collective property ownership options allow participation in property assets from as little as £5,000 through pooled investments.

Returns in our Islamic SIPP are generated through Shariah-compliant methods such as:

• Rental income from property (Ijara)
• Profit from ethical business ownership (Mudarabah/Musharakah)
• Commodity trading with real assets (Murabaha)
• Capital appreciation of ethical assets

These methods avoid interest (riba) and instead focus on real economic activity and risk-sharing principles that comply with Islamic finance requirements.

Yes, staff members of schools, mosques, and other organizations can pool their pension resources through SIPPs to collectively purchase their institution's building. The property is then owned by the SIPPs and leased back to the institution, generating rental income for the pension while providing security of premises for the organization. This arrangement benefits both the staff members (who receive rental income into their pensions) and the institution (which gains long-term security and favorable lease terms).

Calculating Zakat on pension assets can be complex and opinions vary among scholars. The general principle is that Zakat is due on wealth that is owned and accessible. Since pension funds are typically not accessible until retirement age, some scholars consider them non-Zakatable until accessed. Others suggest calculating Zakat on the portion you would receive if you were to access the pension (accounting for taxes and penalties).

GPOD Wealth provides annual Zakat guidance for our SIPP clients, including calculations based on the underlying assets in your pension. We recommend consulting with a qualified scholar for your specific situation. Our team can provide the necessary information about your pension holdings to facilitate this process.

If you pass away, your SIPP can be passed to your nominated beneficiaries. The treatment depends on your age at death:

• If you die before age 75, benefits can usually be paid to beneficiaries tax-free
• If you die after age 75, benefits are taxable at the beneficiary's marginal rate

Beneficiaries have several options, including taking a lump sum, drawing an income, or leaving the pension invested. It's important to keep your beneficiary nominations up to date, as these are taken into account by the scheme administrators (although not legally binding). Islamic inheritance principles can be incorporated into your estate planning, and we recommend seeking specialized advice to ensure your pension assets are distributed according to your wishes and in compliance with both UK law and Islamic principles.