1) Your Pension
Are you saving into a workplace pension? If not, you should be – it’s a great way of boosting your savings by getting free money from your employer. But here’s the quick win: by default, your money is probably being saved into a haram fund.
If, however, I told you that it’s pretty easy to switch over to a halal one, you’d do that right? Well you can. Basically it just involves either searching for it on the pension platform itself or speaking to the provider and let them sort it out. Search for terms like “Islamic” and “sharia” in your pension account, and that’s a big clue to it being a sharia-certified fund. Then properly check out the fund and make sure it has been signed off as being sharia-compliant.
It is vital you sort this out though. The last thing you want is your luxurious retirement cruises to be fuelled by haram money.
2) Your Bank Account
Most Muslims I know have got a bank account with a mainstream bank. By doing that, we’re basically feeding a haram economy, because most banks make their money by turning that money you deposit into interest-bearing loans for other people. As well as that, most mainstream current accounts attract interest. Even if you’re purifying it, the act of receiving interest is haram in itself. It’s much better not to receive interest at all than to give it away.
Unfortunately, Lloyds – the last bastion of hope as the only provider of an Islamic account – have stopped their Islamic account for new customers. Sad times. So what can we do?
As far as we know, there is no mainstream Islamic account any more. The best thing to do would be to open a current account with an Islamic bank like Al Rayan.
I don’t know how functional Al Rayan is from a day-to-day perspective compared to a Lloyds or a challenger bank like Starling Bank. So if Al Rayan is not really viable from a day-to-day use perspective, I would suggest that the least haram setup would be to have a current account with a challenger bank that doesn’t loan money out (like Monzo) but only use that for your day-to-day expenses. Otherwise, money goes into something like an Al Rayan current account.
Check out our article on the halal-ness of challenger banks.
Of course, anything that is surplus to your requirements that you don’t need instant access to, you should probably be investing anyway. Here’s a decent article on why.
3) Your Credit Card
Our view is that credit cards are halal (read more). But if you use one then there is one thing you should absolutely do. Log in to your account, and on the payments settings, have them take the credit card balance from your bank account in full every month.
What this ensures is that no matter what you have racked up on your credit card, it will get taken out on its due date automatically from your bank and you will never fall behind on payments. This ensures that you’re not racking up debt and, crucially, you’re not incurring an interest charge because you forgot to pay.
I’ve got this set up and it works a charm.
4) Your Investments
Making sure you are investing halal is one of the key things you can do. Do a full check of your current investments and weed out the haram ones.
If you are simply accumulating cash in your (halal) bank account then at least you’re not doing anything haram. But you are probably conscious that you want to invest it because money in the bank is doing nothing.
One of the easiest halal investment options is Wahed Invest (see our review here: where you can also get a £25 bonus).
Another hands-off option we like which is property-focused rather than stock market, is Yielders (it helps us if you sign up via this link).
Getting your house in order on this front is a vital way of ensuring not just that you’re putting money into halal things, but also that you’re actually putting your money to work rather than letting it stagnate in a bank account.
5) Do An Audit
One of the habits I’ve got into – and I recommend it – is keeping a document of your assets. I do this primarily for the benefit of my family for when I die (to make it easy for them to understand what I have). In fact, my intention is to keep it somewhere accessible and reference it within my IFG Islamic will.
The reason I mention it here though, is that the very exercise of putting down all your assets on paper will quickly highlight anything haram. You should then focus on eradicating that and switching to an Islamic alternative.
What do you recommend for quick ways to make your finances more halal? Let us know in the comments!
