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Topic starter
19/02/2018 9:48 pm
Hi I am new to the forum and looking for some advice. I was made bankrupted last August due to a deterioration in my health resulting in being on no pay for over 10 months. The sequestration went through in August due to my only income coming from benefits I have no payments to make towards it. My work have now agreed that due to my health issues I will not be returning to work and have agreed retirement before 55 due to ill health. As a result of this I have been given access to my pension pot. Does my pension pot now become an assets. I understand if I withdrew a lump sum at present It would be paid to my trustees but would also stop my benefits because of the lump sum. Yet I would be financially worse off with no lump sum and no benefits. After my discharge in August if I was to draw a lump sum at any point in the next 5 years would this still be payable to the trustees? (Trustees are aware of the pension and my retirement)
TIA
19/02/2018 10:57 pm
Hi Bluebear and welcome.
My understanding is that your pension pot probably isn’t an “asset” but if you draw money from it that would be seen as income.
My understanding is also that if you had sufficient income at any point for four years after your sequestration then a contribution might then become due.
Quite a technical area this, so hopefully Kevin or Sarah will share some further thoughts when they next visit the forum.
This page provides further information related to pension and retirement matters:
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20/02/2018 9:17 am
Hi Bluebear
Trust Deed Assistant is correct. Whilst your trustee cannot force you to draw down from your pension pot, if you choose to do so within 4 years from the date of your sequestration then those funds could be at risk of being gathered in by your trustee.
If you feel that you would not be able to cover your living costs without drawing from your pension then I would recommend you discuss your situation with your trustee. If you can show that a certain level of funds are required then they may be willing to confirm that they would not seek any contribution from your pension if you do take some of it.
The potential effect on your benefits is another important issue and one which I would encourage you to seek expert advice from a welfare rights adviser at your local free advice agency.
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Topic starter
20/02/2018 11:05 am
Thank you so much for your reply. I’ thought that might be the case but couldn’t find any information about it.
I’m only 5 years from the normally age of accessing the pot. I was concerned I may have to take a lump sum to cover the whole debt which would leave my pension short for the rest of my life. However if I could agree a contribution towards it I would feel better about that.
