Many people worry that years of pension saving could be handed to creditors. In most cases, a pension pot that you can’t yet access stays outside your IVA. Things are different once you’re able to take money from it.
The short answer
- A pension you can’t yet access is not usually included in an IVA.
- If you’re receiving a pension, it counts as income in your IVA budget.
- If you can take a lump sum during the IVA, your IVA terms may ask you to consider it.
- Your own contributions can usually continue at a reasonable level.
- Rules can vary, so ask your insolvency practitioner how your IVA treats pensions.
Is my pension included in an IVA?
Pension pots held in registered pension schemes are generally treated as separate from the assets you offer creditors. While you’re below the age at which you can draw your pension, it isn’t usually touched.
What if I'm already drawing a pension?
Pension income, including the State Pension and workplace or private pensions, counts as income. It’s included when your monthly IVA payment is worked out, in the same way as wages.
What if I reach pension age during my IVA?
If you become able to take a tax-free lump sum during your IVA, your IVA terms may require you to consider releasing some of it for creditors. Whether that applies depends on the terms creditors agreed. Your insolvency practitioner will explain the position before your IVA starts, so check your proposal carefully if you’re close to pension age.
Can I keep paying into my pension?
Workplace pension contributions at a normal level are usually allowed as part of your budget. Big increases in contributions while in an IVA may be questioned, because they reduce what’s available for creditors.
Common questions
Can I get an IVA if I'm retired?
Yes. Retired people can get an IVA if their pension income leaves enough spare each month. Our guide to IVAs for pensioners explains more.
Will my workplace pension contributions stop in an IVA?
Not usually. Normal contributions are generally allowed in your budget.
Do I have to cash in my pension to pay my debts?
Not as a condition of getting an IVA, if you can’t yet access it. If you can access it during the IVA, your terms may ask you to consider a lump sum.
How IVA Advice Online can help
Every situation is different, and an IVA isn’t right for everyone. We can look at your income, spending and debts with you and set out the debt solutions you could qualify for, including options other than an IVA. To talk it through, get in touch.