What this meant in practice was that if the pension exceeded the level of debt, the debtor might not be able to become bankrupt in the first place.

This was a slightly surprising move.

While it is understandable to look out for the interests of creditors who find themselves out of pocket through no fault of their own, it appears to go against the policy aim of the Welfare Reform and Pensions Act that pensions should be protected.

Perhaps more importantly, it is an approach that has had no parliamentary or judicial scrutiny.

While it is not yet clear how the amended policy is being applied in practice, if nothing else it seems to allow a fair degree of discretion at that initial phase.

And where there is discretion there is often uncertainty.

So where does this leave us?

From a legal standpoint, it is clear that pensions are (broadly) protected.

Pension funds cannot be claimed outright. A debtor cannot be compelled to crystalise their pension.

From a broader perspective, however, this protection may be academic if a debtor finds they have no choice but to access their pension before they can apply for bankruptcy in the first place.

Are pensions protected under bankruptcy? The short answer must therefore be yes and no.

Martin Jones, technical team leader at AJ Bell