HMRC repays £46m in excess tax on pension withdrawals
1st August 2019
The number of over-55s who have had to reclaim tax after taking money from their pension pots has hit a record high.
Quarterly figures published in HMRC's Pension Schemes newsletter show more than 17,000 savers reclaimed tax worth £46 million between April and June 2019.
Around 14,000 people claimed back £29m in the same quarter last year, the official statistics showed.
Pension freedoms have offered over-55s more choice when it comes to accessing their retirement savings since 2015/16.
But these withdrawals are increasingly being over-taxed by the Revenue on an emergency basis.
The matter of reclaiming that excess tax is complicated, with taxpayers having to complete one of three different forms.
Steve Webb, director of policy at Royal London, said:
"It's a scandal that people who legitimately access their own money, using freedoms given to them by the government, are being over-taxed by HMRC.
"Nearly half-a-billion pounds have had to be prised out of HMRC's hands [since 2015/16] and returned to its rightful owner.
"Thousands of people every month are having to fill in complex paperwork to recover tax they should never have had to pay. "
Speak to us about reclaiming tax.