Since writing my previous article, there has been a further development concerning the impact of bankruptcy on personal pensions plan, particularly due to the recent case of Horton v Henry.
In this case, the Judge considered whether a Trustee in Bankruptcy could obtain an Income Payments Order when no decision had been made by the bankrupt to draw his pension prior to the making of the Bankruptcy Order.
Here, the bankrupt had numerous pension policies, which he was entitled to crystallise, but had not chosen to do so. The Judge held that a bankrupt could only become entitled to a payment under his pension after definite amounts had become contractually payable.
As detailed in my previous article, a Trustee could treat these amounts as income for the purpose of obtaining an Income Payments Order. However, the Judge was of the opinion that, until such time that the bankrupt chooses between the various ways in which the pension benefits could be taken, there would be no entitlement to any payments against which an Income Payments Order could be made.
This has since been appealed and a hearing is expected to take place towards the end of May 2015. I will of course provide a further update as soon as a judgement has been made.
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