15 December 2016


In the case of Horton v Henry, the Court of Appeal has recently upheld the High Court’s decision that a Trustee in Bankruptcy cannot compel a bankrupt to draw down his pension rights where the bankrupt has not elected to do so.

The facts

This decision resolves the conflict between the first instance decision in Horton and the earlier High Court decision in Raithatha v Williamson, in which it was held that a Trustee in Bankruptcy (using an Income Payment Order or "IPO") could effectively compel a bankrupt to draw down his pension and pay some or all of it to the Trustee in Bankruptcy, even where the bankrupt had not elected to do so.

It has now been made clear that a Trustee in Bankruptcy cannot require a bankrupt to draw his pension (thereby causing it to crystallise and turn into income) for the purposes of an IPO.; The Court of Appeal concluded that permitting a Trustee in Bankruptcy to access undrawn pensions would be 'driving a coach and horses' through the statutory protections of a bankrupt's pension and drew upon the provisions of the Welfare Reform and Pensions Act 1999 (the "WRPA").

What does this mean for practitioners?

As far as Trustees in Bankruptcy are concerned, it is now clear that for post-WRPA bankruptcies, IPOs cannot attach to uncrystallised pensions where no election has been made by the bankrupt.

For trustees of occupational schemes, the undrawn pension entitlements of their members are, once again, protected from applications by Trustees in Bankruptcy.

If you are concerned about recently made requests in respect of undrawn pension entitlements, please contact Leonardo Robinson.

Key contact

Michael Hayles

Michael Hayles Partner

  • Pensions
  • Public Sector Pension Schemes
  • Financial Services

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