Q: Is it permissible to apply for an old age state pension? What is the Shariah ruling in this regard?
A: Our understanding of pension funds is that it is a combination of interest and Qimaar (gambling) according to the Shari`ah. Hence investing one’s wealth in a pension scheme is impermissible. However, if the pension fund is a government owned fund which renders assistance to the citizens of the country without investing wealth or with investing wealth (e.g. a percentage of one’s earnings go to the government with the aim of rendering assistance to their citizens in old age), then since it is the obligation of the government and their responsibility to take care of their citizens, especially if they are old and unable to fend for themselves, then this being the right of the citizens, it will be permissible for them to apply for it or seek it in whichever permissible way.
And Allah Ta’ala (الله تعالى) knows best.
Mufti Zakaria Makada
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)