Pension pots not safe in bankruptcies

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Pension pots not safe in bankruptcies

This is a duplicate of the Blog Entry made on 4th April 2012 18:51.

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...

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Re: Pension pots not safe in bankruptcies

Fear for pensions protection as judge rules debtors CAN raid retirement savings

The law that protects the pension savings of bankrupts has been thrown into doubt by a landmark High Court judgement. Experts are warning that those of the 'right age' - aged over 55 - may now have to hand over their nest egg to creditors. A High Court ruling, made last week in the case of Raithatha v Williamson, means that the bankruptcy trustee will be able to draw from the bankrupt’s pension. Previously, a bankrupt's pension had been disregarded because it was not considered income.

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