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Saving For a Space Ship

Pension Grab From People Made Bankrupt - R4 Money Box

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http://www.bbc.co.uk/programmes/b04hm99n

12.25 mins in

Pension grab from people made bankrupt

Money Box has been told that as the law stands the freedom to take our pensions out from age 55 will be extended to trustees in bankruptcy who will be able to snaffle the lot to pay our creditors should we become insolvent after the age of 52.

It will be subject to a few conditions such as making sure we can provide for our family.

But whereas the present rules only put a quarter of the fund at risk, from April it could all be. And the Treasury says it will not change the law. Two experts debate the issue.

Duration: 30 minutes First broadcast: Saturday 20 September 2014 On Money Box

Edit: article is followed by piece on dodgy instant access saving accounts and Uk ponzi scheme prosecutions

Edited by Saving For a Space Ship

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Seems it'll always be at a court's discretion. The argument hinged on a case where a bankrupt had a 7-figure pension pot and the court ruled that the 25% lump sum was an asset the creditors could access.

I'd've thought you could still beat the system - albeit at a cost - once you hit 55. Before bankruptcy, convert the fund to an old-fashioned annuity. Though if you're still earning an income (a lifestyle bankruptcy, as opposed to going bankrupt in an honest business failure or loss of job), the court might take a dim view of that.

Most interesting for HPC: this looks like just the kind of risk to deter parents from going into debt to support their offspring buying a house ... B)

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Would think it's a bad thing from an enterprise point of view as I would imagine a lot that do go for the dream pub/shop/restaurant/other lifestyle business do so in their fifties. Possibly even more so with house buying becoming ever later.

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