Pensions & Bankruptcy.

[puddlepuss]

Hi. I was declared bankrupt in 1997 & went through all the required procedure with the official receiver, producing a 'statement of affairs' & handing over my personal pension policy as required under bankruptcy law as it applied then.

 

However, I believe the law changed in May 2000 & most bankruptcies petitioned after this date would not be subject to the bankrupt's pension being forfeited to the official receiver?

 

Unfortunately in my case, I received a letter when I reached the age of 55 stating that the official receiver is the 'trustee' of my private pension & intends to realize the 'non-protected rights' lump-sum portion of my pension fund. (Luckily, I stopped paying into the pension when I became bankrupt so the amount the official receiver intends to claim is only about £9000).

 

Five years later having now just turned 60yrs old I am still waiting for them to do this. I have been in full-time employment since 2001 (my bankruptcy having been discharged) & have been contributing to my employers company pension scheme since then.

 

My concern is that the official receiver could also take my current company pension when I finally decide to retire, even though they have already informed me of the amount they intend to take from my old paid up pension?

 

I have also been informed by the [old] pension provider that I could take the protected rights part of the pension now if I wished, even though I am still working full-time. Is this correct? I have heard nothing from the official receiver so is it up to me to contact them & inform them that I intend to do this?

 

I know the obvious answer is to consult a financial adviser but I just thought that there might be someone on the forum who is in a similar situation & has had their pension taken by the official receiver? Any advice would be appreciated!

Edited January 5, 2014 by honeybee13
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[honeybee13]

Hello and welcome to CAG. I hope the forum guys will be along later with advice for you.

 

I understand a bit about pensions, but not the position as regards bankruptcy, so I hope the regular guys will have some comments for you on that.

 

I have also been informed by the [old] pension provider that I could take the protected rights part of the pension now if I wished, even though I am still working full-time. Is this correct? I have heard nothing from the official receiver so is it up to me to contact them & inform them that I intend to do this?

 

My understanding is that you can draw your pension after age 55 while you're still working, but you would pay tax on it. As I said, I'm not sure about the Trustee in Bankruptcy situation.

 

My concern is that the official receiver could also take my current company pension when I finally decide to retire, even though they have already informed me of the amount they intend to take from my old paid up pension?

As to your employer's scheme, my OH who describes himself as pensions bore, tells me it depends on what type of scheme it is. Do you happen to know that please? If you don't, I should be able to help you establish that.

 

My best, HB

 

[puddlepuss]

Thanks for the response & reply HB, much appreciated. I am in my employer's 'Defined Contribution' pension scheme whereby I pay a fixed monthly amount into the 'pot' and my employer then doubles that amount. As I said before, the official receiver wrote to me about 6 years ago to inform me how much of my private pension they would be taking (about £9000). They also gave me an option to buy back my pension rights if I could find someone to come up with the funds. Unfortunately, I didn't take up the offer! At the time I was in full time employment but I was not in a company pension scheme. This was well before I started working for my current employer. At the moment I am putting as much as I can into my current employer's scheme as it is a very good one (so I am informed!) so as to maximise my final pension fund when I retire in 5, 6 or maybe 7 years time (it keeps going up unfortunately!). I am worried now that the OR will also look at this pension too when the time comes. The annoying thing is the amount I was declared bankrupt over was £18000, not a particularly large sum by today's standards.

[honeybee13]

Thank you for that.

 

Would you know if the scheme was set up under a Trust? If you have the scheme booklet does it mention that or scheme Trustees? Or what is its name The [company name - don't tell us] xxx scheme?

 

I have a reason for asking this. OH tells me that if the scheme is under a Trust rather than a group personal pension, it's unlikely the bankruptcy trustee can touch it. Please tell me more.

 

HB

[puddlepuss]

Hi again HB. As I work for a very large water utility company in the North West, I believe the company pension scheme is managed by a firm of trustees. It used to be 'Winterthur Life' but I think it may have changed recently. Also, I have been informed that as I started contributing to this scheme well after my bankruptcy discharge, it would not form any part of my bankruptcy estate as far as the OR would be concerned? Hope that's correct! Thanks again for your advice & help. PP

[honeybee13]

Sorry, I don't know enough about bankruptcy to confirm your understanding.

 

If you want reassurance about the scheme that you're in, it would be handy to know who the Trustees are to make sure what type of scheme it is. Defined contribution could well be under trust, I believe, but in your position I would want to be sure.

 

Your call though.

 

HB