Income from pensions after bankruptcy
If you’re retired and your only income is a state pension and pension credits, the official receiver won’t usually order you to pay anything after your bankruptcy.
If you get any other income on top of your state pension and pension credits, for example a private pension, you may have to make payments after your bankruptcy.
The official receiver will check your pension and other income and your living costs. If you have any money left over after you’ve paid your essential household costs, the official receiver will set up an income payment arrangement or IPA where you make monthly payments for three years. This happens in around 1 in 5 bankruptcies. (Source Insolvency Service figures 2012-14).
An IPA should be set at an affordable amount and you can ask for it to be changed if your circumstances change. The payments are made to the official receiver or a ‘trustee’ they appoint. If you don’t make the IPA payments, the official receiver can take court action.
Making pension fund payments after bankruptcy
If you're paying into a company pension, the official receiver will usually take these payments into account when working out if you need to pay anything after your bankruptcy. You may be asked to reduce the payments to the minimum amount until you’re discharged from bankruptcy.
The official receiver may not allow you to continue paying into a private pension while you’re bankrupt, but you can start your payments again once you’re discharged.