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Ruling changes protection on pension pots

05 April 2012

In a judgment made by the High Court, a person who has attained retirement age (55 or scheme's retirement date if earlier) could now be forced to claim their pension as income and pay creditors for any debts owed. It was previously generally accepted that a person couldn't be forced to start their pension and it could therefore be protected from creditors.

When making the decision the Court held that:

"The proper interpretation in my judgment is that a bankrupt does has an entitlement to a payment under a pension scheme not merely when 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 payment."

A recent article by the Telegraph, indicated that this could now permit creditors to go after the pension payments of 11,000 bankrupt people who are over the age of 55.

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