Zakaat is the Fourth Pillar of Islam.
It is an annual payment made by Muslims. It is not a tax imposed by Islam, but a due fixed by Allah (S.W.T) so that the wealth of a person may be purified.
Zakat becomes due on savings which have been kept for one full year.

Two and a half percent (2.5 %) of the total money is given to the poor and needy. For, example, if a person has £100.00 in savings which he has kept for a year, Zakat of £2.50 will be Farz on him.
It is important to note that Zakat is paid by each person not each household.

Zakat is an act of worship. It is also a way of showing sympathy to those who are less fortunate. It is meant to take away from our hearts greed and the love of money. It is also to build the gap between the rich and the poor.
It is a Hadith of the Prophet (S.A.W) reported by Hazrat Abu Huraira (R.A) that: “Every morning two angels come down from the Heaven. One says, “O Allah! Reward all those who give in Your cause,” while the other says, “O Allah! Uproot every miser who withholds”.