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How Safe Is Your Pension?

In today’s uncertain financial world it is a worry to the majority of people that the monies they have paid into their pension pots throughout their working lives will actually be available to provide an income for them in their retirement.

This can become even more complicated if you are made bankrupt.  What then happens to the money that you have saved to provide for your retirement?  Is this money available to be used by your Trustee in Bankruptcy to pay off your creditors?  The Government introduced new rules in April 2015 that meant pensions are accessible of cash from the age of 55 and this muddied the waters further. 
From a legal perspective there was an earlier case, Raithatha –v- Williamson, that had suggested pension pots could be used by the Trustee in Bankruptcy to pay creditors.  However there was some clarification on this point in an appeal in the Horton –v- Henry case which stated that pension pots could not be used by the Trustee in Bankruptcy to pay off creditors.   The only time a Trustee in Bankruptcy could claim money from your pension would be if you were taking an income on a regular basis and this would then become available to the Trustee in Bankruptcy to potentially pay off your creditors.  I believe that this Judgment clarifies the position for both Trustees in Bankruptcy, creditors and bankrupts and confirms the position that the law considers that pension pots cannot be used by Trustees in Bankruptcy to pay a bankrupt’s debts.
If you are currently subject to a Bankruptcy Order or are a Trustee in Bankruptcy then please do not hesitate to contact our David Farmer who will be able to provide specific legal advice in relation to any questions you may have as a result of  this decision by the Court of Appeal.