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Pensions not affected by Raithatha v Williamson Case - Bankruptcy UK

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Pensions not affected by Raithatha v Williamson Case

The High Court has refused to follow the Raithatha v Williamson case, where it was held that a bankrupt aged 55 or over could be forced to draw down his/her pension to pay creditors. Prior to May 2000, a bankrupt’s personal pension vested in their Trustee in Bankruptcy.

This changed following the introduction of the Welfare Reform & Pensions Act 1999 and pensions were finally deemed untouchable following the Lesser v Lawrence and Krasner v Dennison cases in 2000.

The case is going to appeal in the Court of Appeal, but it looks as if, for the moment at least, the Official Receiver and Trustees cannot compel a bankrupt to draw down his/her pension if the bankrupt has not already elected to draw on his pension prior to the bankruptcy. So pensions are once again off limits as the law originally intended.

As it stands, the OR / Trustee can only:

(a) Challenge any excessive contributions made by a Bankrupt into a pension scheme on the basis it was an attempt to put assets out of the reach of creditors or

(b) Include any income received by a bankrupt from a pension scheme as part of an Income Payments Arrangement / Order

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Bankruptcy UK

Bankruptcy UK