Is the ‘Help to Save’ Scheme Halal or Interest Based?

Answered by Mawlana Ilyas Patel

Question

The UK government has a Help to Save scheme. Help to Save is a savings scheme for low-income earners. Savers can deposit between £1 and £50 a month into their account and receive a government bonus– even if money has been withdrawn. Savers will earn a 50-pence bonus for every £1 saved, and the bonus payments are paid in the second and fourth years. Is this Halal money, or is the bonus money interest?

Answer

In the Name of Allah, the Most Merciful and Compassionate

I pray you are in good faith and health. Thank you for your question.

This scheme is not permissible. The Help to Save account is run on the National Savings & Investment (NS&I) platform. NS&I is the Government’s savings provider. When saving or investing with NS&I, you’re lending to the government, and your money is utilized to generate profit via various methods, including purchasing bonds and other investments.

It is impermissible because when one deposits money into a Help to Save account, one is forwarding a loan to the NS&I, which the government guarantees to pay back with an additional bonus. Islamic law prohibits taking benefits from lending money.  The juristic principle mentioned, “any loan that draws a benefit is a form of usury.”

[Ibn ʿAbidin, Radd al-Muhtar]

I would like you to go through the valuable answers and links below. You will receive guidance and direction in sha Allah.

Related

• Get help with savings if you’re on a low income (Help to Save): How it works – GOV.UK (www.gov.uk)
• Help to Save explained – MoneySavingExpert
• Provision and Work: A Reader – SeekersGuidance
• How Does One Perform The Prayer Of Need (salat al-haja)? – SeekersGuidance

Why not begin your search for knowledge by signing up for a course on SeekersAcademy (seekersguidance.org)?

I pray this helps with your question.

[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel is a traditionally-trained scholar who has studied within UK, India, Pakistan, Syria, Jordan and Turkey.

He started his early education in UK. He went onto complete hifz of Qur’an in India, then enrolled into an Islamic seminary in UK where he studied the secular and Alimiyyah sciences. He then travelled to Karachi, Pakistan.

He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK where he was a librarian and a teacher of Islamic sciences.

He currently resides in UK with his wife. His personal interest is love of books and gardening.