www.iva.co.uk

im halfway through an iva with my wife she is due a state pension lump sum , can the iva touch this lump sum or is it discounted from iva calculations when calculating fifty percent payments to iva over and above agreed earnings, and is it discounted if she carries on working as well

Hi Andyh, one of our experts should be along to answer your questions.

Was any provision made in the IVA proposal/ modifications for your wife's pension?

If it it YOUR iva then your wife's earnings are her own. They are only used to calculate your share of the allowable expenditure, so if she earns more the creditors will assume she will take a greater share of the expenses, and your share will therefore decrease slightly, allowing a little more of your earnings into the IVA payment.

I think the pension lump sum will be ok but hopefully one of the experts will be along to clarify that.

If the IVA is yours alone the money is your wife's to keep. However, she could offer some as a full and final settlement of your IVA which would make it easier moving into retirement.

andyh states "im halfway through an iva with my wife "....

I presume from this that his wife is also part of the IVA and therefore the lump sum would have to be introduced to the IVA wouldn't it as it would be classed as a windfall ?

seams a little un fair that the lump sum thats been saved for ? 20years or so has to go on the iva?

You can always defer the lump sum and take a higher pension but you should take specialist advice.

I agree that independent advice should be sought. Does she have to take the lump sum now? Can she defer it until after the IVA has completed?

Hi Andy,

I also get the impression from your wording that your wife is in the IVA. I am assuming that you are talking about the lump sum from a deferred state pension which can be drawn any time after 12 months have accumulated? If so, this might help.

I am in a joint IVA with my husband and was in a similar position half way through our IVA. I wanted to defer my pension so I referred to my IP who confirmed that there was no requirement to introduce any pensions into our arrangement which meant if I subsequently decided to draw down the lump sum I would be able to keep it. Whether this is unique to my own proposal or is the general rule regarding state pensions I am unsure but hopefully an expert can advise. If your wife is in the IVA, as already advised on here, refer to her IP for clarification of her proposal. She may find she can keep it – or some of it. If not, if you could hang on, don't forget the state pension can be deferred for as long as you wish, there is no obligation to draw it within a specific time (the DWP tables calculate up to 15 years!)
I decided to wait until after our IVA completes then we will have some money towards replacing the car etc.

Also seek clarification from your IP regarding drawing weekly/monthly pension, I think it would be classed as additional income if someone is still working and therefore need to made available for the IVA.

I'm very surprised if an IP will agree to deferring drawing state pension until an IVA is completed. The pension is additional income which, when drawn monthly, adds to the payments creditors receive.

Would it not depend on the individual proposal, John, everyone's circumstances are different. That is why I suggested to the poster to check back with his IP for clarification. Surprising as it may seem my company pension was excluded from my arrangement and the creditors agreed to it. I queried regarding my state pension later on because I wasn't sure and my IP confirmed that there would not be a requirement to draw it down if I did not wish to do so and could therefore defer it.
In our case, taking into consideration what our final contribution to the creditors was likely to be, our IP must have considered this to be fair.

It is down the individual proposal and I believe I've read before that pensions have been excluded.

My pension (If the govt allow me to have one, when the time comes) has been specifically excluded in my proposal

When I first looked into doing an IVA the options for me was either going down the five year route when my pension lump sum would be excluded, or to use the pension lump sum as an F & F. On balance the return to creditors was roughly the same and although it meant that my monthly pension payments were slightly less chose the F & F option as age was not on my side so think that pension lump sums are generally excluded