High Court decision backs pension protection in bankruptcy

Decisive judgement currently being appealed

Carmen Reichman
clock • 2 min read

A new decision by the High Court has ruled undrawn pension funds cannot be accessed in the event of a bankruptcy, protecting them from being used to pay off debts.

In Hinton v Wotherspoon the court ruled on 19 May undrawn pensions can not be made subject to an income payments order (IPO). An IPO is a court order whereby a person in bankruptcy is asked to contribute funds of their income towards settling debts with their creditors. Currently, a trustee in bankruptcy does not have immediate access to an individual's pension plan if no income is being drawn. The High Court now confirmed the mere existence of a drawdown fund was not sufficient to make an IPO. This was because at the point of taking benefits there are still decisions to be made...

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