Hi 4654ae16.

A pension fund will generally be protected if you enter a trust deed. A rare exception might be if it could be demonstrated that someone had borrowed funds specifically to put into their pension and they then looked to enter a protected trust deed afterwards.

Income from a pension would be treated in the same way as any other kind of income in working out how much a trust deed contribution should be.

Taking a lump-sum from a pension during a trust deed might cause issues.

You can continue to pay into a pension during a trust deed; how you spend your money is a matter for you. However it's unlikely that much provision for this would be able to be made in the income/expenditure analysis used to work out what the monthly trust deed payment would be. The reason for this is that the creditors will want to be paid back as much as you can reasonably afford. Therefore a significant monthly pension contribution during a trust deed might be difficult to afford.

Might cause issues? Can you elaborate. Due to the recession etc pension benefits are being reviewed so if I cancelled the pen sion, took out what I have paid in only and found a new provider would I be breaking my TD? Thanks

Hi 4654ae16.

Kevin's answers in this recent thread cover many of the questions that come up in terms of lump sums from pensions. It isn't a straightforward or "black and white" area:

http://www.trust-deed.co.uk/forum/topic.asp?TOPIC_ID=1005

I wouldn't take money out of your pension, with a view to putting it into another later, without having the written go-ahead from your Trustee first. If it's a transfer from one pension to another this may not be a problem though I'd suggest you are still a little cautious.

Are you sure you are allowed to take money from the pension, 4654ae16? I think that may only be possible if you are over 55, and then only 25%

Its a council scheme and as it hasnt yet been running 2 years I think there is an opt out clause

Fair enough, I'm certainly no expert on pensions so imagine you are quite correct!

Thanks Kevin.

So what would be the legal viewpoint on say £1,200 of pension contributions if I were to withdraw this?

Thanks

Hi 4654ae16.

From previous threads it seems the subject of lump sums from pensions (and therefore I would assume removing cash from a pension as you are suggesting) isn't an area that is especially clear-cut.

Hopefully one of the experts can provide further information soon, but I would have thought you'd be looking for the agreement of your Trustee before you do this to avoid any prospect of losing the money to the trust deed.

Hi 4654ae16

I'm no expert on this however as TDA suggests you should really run this by your Trustee before you do it. Can you transfer the value rather than withdraw the money, as this may be a way round it?

Julie