Does the OR always take your pension?

Lily-Rose_3

I ask this, because my friend went bankrupt in late 2009, and she and her husband surrendered works pensions from jobs they left in 2005 and 2007. (She paid in 7 years, he paid in 9.) She recently bumped into a friend who used to live near her, who said that the people in the house she lost in the bankruptcy, keep getting letters occasionally for her (and her husband.) Not a lot of stuff as she gave everyone the new address. Not the pension company or old employers though, as the pensions were to be taken at the bankruptcy.

Long story short, she went back to the old house, and the new owners gave her some letters, and they were from the pension companies that she and her husband were with. According to the letters, both pensions are still active! She phoned both companies, and they confirmed both pensions were still active, and were currently being predicted to pay out about £150-175 a month each in approximately 12-13 years. (Not a massive amount, but as I said, they only paid in for 7 and 9 years.)

The OR she dealt with dispensed with her and her husband's case about two years ago, and they were discharged in 2010.

Is this unusual? Or not? Could it be that the amount that could be cashed in, wasn't worth the OR bothering with? (as if they were cashed in rather early, they may have been worth less than a grand each.) How come they never took the pension? Anyone else had this happening?

Lily-Rose_3

Anyone?

TheGardener

Hi - I had a look around and found this in the FAQ section of the ORs technical manual on the insolvency website re pensions : All approved pensions in cases made on a petition presented on or after 29 May 2000 are excluded from the bankrupt’s estate. This includes not only the pension fund itself, but any related rights such as the right to receive a death benefit or the right to bring a legal claim in respect of the pension (see paragraph 61.21).
I think this means that their pensions - as long as they were part of an approved pension scheme, might have been exempt because it was about when the petition was presented rather than when the pensions date from.
I'm sure one of the experts on here might be able to confirm or correct me as I'm not 100% certain?

longtermplanner

Pensions are not normally touched unless you appear to have done something unusual. If you have just put £25k into your SIPP and then you go bankrupt, the OR will not surprisingly want the money back.

(The exception here is if you are entitled to start receiving a pension, then you can't decide not to take it. But it doesn't sound as though that is relevant for your friend.)

debt_doctor

Yes indeed the pensions (if HMRC approved - never found one that isn't) are exempt as assets in BR, so belong to the former BR.


A lump sum during BR and whilst under an IPA is claimable.


DD

Lily-Rose_3

Wow, that's great to know. Thank you so much everyone. My friend said that the woman at the C.A.B said (back in 2009) that they will take the pension, and that she must give all the information on it, as they will want anything paid into it. She must have been going off old information I guess.

She did also tell my friend that the OR will close all your bank accounts, and that she needs to have her wages and any tax credits, child benefit etc, paid into a friends account, but when she asked the OR, he said they would never leave them with no bank account. So it seems as helpful as the C.A.B. were with many things, they gave her misleading information on both counts.

Thanks so much for this info. I will pass it on,