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Bankruptcy: The impact on your pension

Many people declare themselves bankrupt each year. If you become bankrupt, it is important to understand the impact on your pension.

A recent ruling from the Court of Appeal (Horton v Henry) means that undrawn pension pots were not funds to which the bankrupt individual was entitled and therefore could not be made subject to an Income Payment Order (IPO) when someone is declared bankrupt. The ruling stated that, if the bankrupt was over the age of 55 and a decision to take benefits had not been made, the mere existence of a pension fund is not sufficient to establish an ‘entitlement’ for the purposes of an IPO. This means that creditors cannot force a bankrupt individual to access their pension if it has not been touched.

Being bankrupt can have serious implications for your future, both personally and financially. Information about the impact on your pension can be found here.

Any decision needs careful consideration and we recommend you seek financial and/or legal advice and speak to a debt counsellor before making any decisions. 

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