How a pension is dealt with in bankruptcy
Produced in partnership with Philip Hinks of 3 Verulam Buildings (3VB)
How a pension is dealt with in bankruptcy

The following Restructuring & Insolvency practice note Produced in partnership with Philip Hinks of 3 Verulam Buildings (3VB) provides comprehensive and up to date legal information covering:

  • How a pension is dealt with in bankruptcy
  • The position of a personal pension on bankruptcy
  • Bankruptcies predating 29 May 2000
  • Post–2000 bankruptcies
  • Approved/unapproved pension arrangements
  • The position with IPOs
  • Brexit

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for R&I?

The position of a personal pension on bankruptcy

A bankrupt’s estate automatically vests in the official receiver (or an insolvency practitioner if instead appointed at the time) as first trustee in bankruptcy (trustee) on the making of a bankruptcy order. Various items are excluded in this respect, including tools and equipment required by the bankrupt for business purposes, and clothing etc necessary for satisfying the bankrupt’s basic domestic needs (IA 1986, s 283(2)).

This Practice Note addresses the issue of what happens to an individual’s pension rights on the making of a bankruptcy order. It considers the effect of bankruptcy on occupational, personal and state pension arrangements.

Bankruptcies predating 29 May 2000

This section applies to persons made bankrupt as a result of bankruptcy petitions presented before 29 May 2000.

Rights acquired in relation to both personal pension schemes and occupational pension schemes are ordinarily recoverable

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