Many people may not be aware but your ‘untouched’ pension funds are usually protected from your creditors if you get into financial difficulty or face bankruptcy. This may not be the case if you have already accessed your pension fund via annuity or flexible drawdown where an ‘attachment to earnings’ order may be applied for.
Committing Fraud with Creditors
A recent case, Bacci v Green  EWCA Civ 1393, where Mr Green had fraudulently secured a £3 million loan with artwork offered as security from FundingSecure, a peer-to-peer lending platform. Mr Green did not own the artwork (his father owned the art gallery business) but his pension fund owned a share of the building in a very expensive area of London and when the peer-to-peer platform FundingSecure went into liquidation, the peer to peer lenders (i.e., the people who actually lent the money via the FundingSecure platform) to Mr Green, had the debt judgement order assigned over to them to pursue Mr Green who filed for bankruptcy. This then went to the Court of Appeal.
We will not go into all the technical matters of the case here, but in simple terms:
We must agree with the Court of Appeal. You cannot commit fraud, then when found out, file for bankruptcy and not pay your debts when you have £millions ‘stashed’ elsewhere e.g., in pension funds.
We believe it is in the ‘public interest’ to be fair and equitable result that if you commit a fraud, all your assets, including pension funds should not be protected/ring fenced.