UK - Pensions of occupational scheme members who have become bankrupt are now safer from the claims of creditors.
A change in the law now places pensions outside of a bankrupt’s estate. However, actuary and consultant Lane, Clark & Peacock warns out that, on application from a court, the whole or part of a pension in payment can still be included in a bankrupt estate for a specified period.
This occurs where a court finds that a bankrupt’s total income is in excess of the reasonable domestic needs of the bankrupt and his family. The court may also claim pensions where contributions are deemed to be excessive and made for the purpose of placing assets beyond reach.
Barring such exceptional circumstances the occupational pensions of all those declared bankrupt on or after May 29, 2000, are automatically excluded from a bankrupt's estate.
By contrast, unapproved pension arrangements can still be included in a bankrupt’s estate, unless the court agrees that the whole or part of these rights must be excluded on the grounds of the financial necessity of the bankrupt and his family. By David Rowley
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