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A High Court ruling means untouched pension pots of undischarged bankrupts could now be used to pay of creditors. The ruling handed down today (April 4) potentially changes the previously position which considered pensions out of reach as it was not considered as “income”. Today’s judgment in Raithatha v Williamson states a bankrupt does have an entitlement to a payment under a pension scheme not merely where the scheme is in payment of benefit but also where, under the rules of the scheme, he would be entitled to payment merely by asking for it.
The ruling was made in the case of Situl Raithatha, of Springfields Business Recovery & Insolvency, who was acting as trustee in bankruptcy and brought the application to make Michael Williamson, 59, access his pension. Commercial law firm EMW principal Damon Watt, who acted for Mr Williamson says the decision affects anyone of pensionable age under their pension scheme, even where they might not have reached the current “state” retirement age of 65, who becomes bankrupt.....Read more here---: Pension pots not safe in bankruptcies
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Mike Morrison, head of pensions development at Axa Wealth, has followed the case law. 'The Welfare Reform and Pensions Act was put in place to protect any pension money if someone was declared bankrupt. 'This case still has an appeal stage to go to but it could eventually lead to a change in the law.' The judge in the Raithatha v Williamson case, B Livesey QC, ruled that because the bankrupt is entitled to an income from the pension, assuming they are of the 'right age', then the pension is subject to the bankruptcy rules....Read more here--: Fear for pensions protection as judge rules debtors can raid retirement savings | This is Money