High Court ruling may protect bankrupts' pensions after freedoms take effect

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A man in bankruptcy has retained his personal pension after a High Court judge decided he should not be compelled to hand it over under an Income Payments Order (IPO).

The landmark ruling could mean bankrupts' pensions are protected after ‘freedom and choice' takes effect in April despite an earlier judgement opening up the full cash lump sum for insolvency claims. In Raithatha v Williamson in 2012, a judge held that a bankrupt of pensionable age could be forced to draw their 25% tax-free lump sum and give it over to trustees in a bankruptcy. However, the judge in this latest case - Horton v Henry - ruled that even though a bankrupt aged 55 or over was entitled to access their pension, they were not obliged to draw it for the purposes of an IPO. ...

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