Protecting the pot

The rights of an individual under either an occupational pension scheme or a personal pension arrangement often constitute an individual’s most significant asset after his or her house. Where an individual is declared bankrupt, the trustee in bankruptcy (TIB) will be keen to realise all the individual’s assets, including any value in the pension scheme, in order to satisfy those debts. However, there are strong public policy arguments in favour of protecting pension rights even for an insolvent individual. This is to encourage retirement savings at a level sufficient to ensure that the individual will not be left destitute in old age, when unable to earn an income, and therefore be reliant on the state. Conversely, it is not in the interests of creditors to allow individuals to use pension arrangements to put their wealth out of the reach of those creditors. The competing public policy pressures in this area have therefore led to sometimes difficult shifts in the attitude of the courts and legislators on how