IVA and Pensions. Next year, when the cap comes off withdrawals that can be made from a private pension fund, is it likely that IPs will insist that pension funds (minus tax)are handed over? Are there any other possible impacts of pension changes, such as insisting on increased GAD percentages for withdrawals?
I'm not sure what's covered in the latest protocol but they used to be generally excluded from IVA's. That's not to say you couldn't use the 25% tax free element as an offer to finish one early, although not the smartest of moves, me finks.
I'm sure they'd like to, but I have a feeling at some human right level it'll be ring fenced and blocked, least it should be
I'm thinking though it would be a great bargaining tool with your creditors to come to an arrangement outside of an IVA... There's a killer of a business in there somewhere!!
This could be a ticking time bomb with profound impact on IVAs and private pension funds. Removing the restrictions on the use of pension funds was a highly political move - according to the National Statistics Office, more than 50% of the wealth of the wealthy is tied up in pension funds - so this was a mechanism to allow the wealthy to get their hands on the money - hence the jokes about Lamborghinis! I hope some expert is having a very careful look at this. Anyone who is old enough at any point during an IVA to have any kind of access to a private pension fund could be vulnerable. I don't know if any protections are being put in place by the legislation, in order to ring fence private pensions. It could also impact bankruptcy.
The Welfare and Reform Act of 1999 ringfences pension funds from insolvency proceedings, and I don't see that the change in pensions law will affect that - however if someone wanted to use their pension funds to settle debts, this is now made far easier for them. Perhaps we will see a flurry of full and final IVAs being put forward in the future.
GD.23 don't think it much to do with someone who carefully saved for 40 years, doesn't fit the profile. But it does increase the governments tax receipts, as it'll still be taxed, it's targeted on the "small pot" holder taking the lump, rather than the guaranteed annuities of 10%-11% fixed for 10 years!
Thank you for your observations Melanie. I'm no legal expert - just someone with a serious concern. As far as I know, the Welfare and Reform Act 1999 does not ringfence pension funds from insolvency; it ringfences pension funds from bankruptcy (but not necessarily all income from a pension fund) - so presumably, if pension funds are ringfenced from IVA proceedings, there must be some other legal mechanism that does that. I haven't looked at any enabling legislation (I don't even know if it is available yet) for the proposed changes to pension funds, but as the old saying goes, 'the devil is in the detail'. As I said, I'm not a legal expert, but I think I may need to do some digging. Sponge, thank you for your comments - where can I find an annuity at 10-11%?
The ruling in IVAs re pensions generally follows the bankruptcy position, however most responsible IPs will have pensions specifically excluded within the IVA proposals they propose for their clients.
If you can master travelling back in time, I'm your man!
People in business with a ltd company to their name have been able to access their private pension pots, for some years through the SSAS tool. Even age is no barrier, given the right circumstances!
