More than just news
People’s pensions may no longer be safe if they go bankrupt after a formerly indebted businessman lost a court case preventing creditors from raiding his retirement pot.
However following a High Court judgment yesterday, a bankrupt person could now be forced to draw their pension and hand it over to creditors.
The case in question involved Leicester businessman Michael Williamson, 59, who owes around £1.25 million to Martin Shepherd, a former business partner.
The court ruled that because Mr Williamson is over 55 – the age at which he can start drawing down his pension – he is entitled to payment from his pension scheme. This money should be considered as income and therefore should be used to pay back Mr Shepherd and other creditors, the court said.
The decision could allow creditors to go after pension payments of the 11,000 people over 55 who declare themselves bankrupt every year.
Damon Watt, a partner at law firm EMW who represented Mr Williamson, said: “Up until now those who had reached retirement age were perceived to have some limited protection over their pension. This decision strips away that protection.”
Anne-Marie Winton, a partner at law firm Nabarro, told Pensions Week: “Pensions will no longer be seen as a safe hiding place for money people don’t want anyone else to touch. In some ways pension income is no different to any other form of income that creditors can take – and it sounds like the court is chipping away at the law on this.”
Mr Williamson, who ceased being bankrupt last November, was granted permission to appeal the decision.
Dear Lord..Thank you..God Bless..M
Remember how Ron Paul was saying America should go bankrupt instead of borrowing. Does this mean if we did our nation would be handed over to creditors, such as China? This brings up much bigger issues.
I believe Ron said that about the "too big to fail" banks that were bailed out. I dont recall him saying America as a whole should go bankrupt.
Time to start a different pension plan that creditors cant get at. Its called a coffee can buried in the back yard.