Deb Nolan IFA Leeds - Court protects SIPP's in bankruptcy cases

Friday 11 November, 2016

Deb Nolan independent financial adviser (IFA) in Leeds / Bradford reviews how the court protects self-invested personal pensions in bankruptcy cases

The recent Court of Appeal on Horton V Henry has upheld the decision of the High Court by recommending that uncrystallised pension funds should remain protected from creditors if a person declares bankruptcy.  

Since pension freedom in 2015 there has been growing concern that pension savers with unclaimed pensions could be liable to an Income Payments Order (IPO).  During a bankruptcy case IPO’s are served by the trustee.

Deb Nolan, independent financial adviser in Lonsdale Services Leeds / Bradford office said: 

‘As Mr Henry was over 55 when he petitioned for bankruptcy under pension freedoms he was able to draw his pension.  The Trustee in bankruptcy wanted to force the crystallisation of Mr Henry’s SIPP and other personal pensions.  However, the judge concluded that if a person over 55 has not drawn money from their pension they do not have to use these pension savings to pay their creditors.  The decision will come as a relief to pension savers.  The flexibility of pensions and the tax incentives that they offer make them an important component of an individual’s financial planning.  So this ruling is good news for pension savers.’

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