Bankruptcy Involving Fraud and Pension Protection

Published / Last Updated on 07/06/2023

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 [2022] 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:

  • The Welfare Reform and Pensions Act 1999 protects all types of pension arrangements from bankruptcy and the creditors of the individual pension scheme member.  If income or drawdown is already in place from the pension, it is not protected.
  • Mr Green was over age 55 and had a right to draw his pension from age 55 but had not yet done so. 
  • The creditors sought to override the fact that you can draw benefits from a scheme when you chose to and requested an equitable execution order, in short, and in line with other cases, getting the High Court to open his pension fund to pay benefits as this was the fairest thing to do.  Why should Mr Green have £millions in a pension fund but be allowed to file for bankruptcy and not be forced to pay his creditors?
  • The High Court agreed to allow the creditors solicitors the right to instruct the pension scheme trustees to release tax free lump sums and taxable lump sums and give up any enhanced protection and higher lump sum protection from Lifetime Allowance charges that Mr Green had already in place. 
  • This was appealed by Mr Green.
  • The Court of Appeal then ruled with the creditors and threw out Mr Green’s appeal.


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.

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