It’s believed that hundreds of UK retirees have overpaid tax.
HMRC might owe you hundreds of kilos (Picture: Getty)
UK pensioners have been suggested to say again cash they could have overpaid in pension tax. New figures present that between October and December 2025, HMRC refunded £46.2m to pension savers.
Over 13,600 reclaim kinds have been submitted by taxpayers over these three months, with a median refund of greater than £3,000 per declare. This got here after pension withdrawals have been overtaxed on the emergency price.
A staggering £1.5 billion has been refunded to pensioners who overpaid tax on versatile pension withdrawals. Private finance consultants have revealed the three kinds you want to find out about if you wish to declare again pension tax you consider you might have overpaid.
In the event you withdraw the alloted tax-free 25% of your pension pot, your pension supplier might not be conscious of your tax code or different particulars of your earnings. This implies you possibly can find yourself paying tax you should not have. In different phrases, these withdrawals are taxed utilizing a higher-rate emergency tax code in case your supplier would not have these particulars.
You probably have taken a single withdrawal out of your pension pot, then it is essential to test that you have not overpaid. In the event you suppose you might have overpaid tax, it’s best to fill out certainly one of three kinds.
Which kind you fill out and file will depend on the state of affairs you might be in. These are:
HMRC improved its tax code course of in April 2025. Nevertheless, points nonetheless stick with ad-hoc withdrawals. Tax codes are actually routinely up to date for people newly receiving a personal pension.
The typical refund is predicted to be over £3,000. (Picture: Getty)
Lately, Tom Selby, director of public coverage at AJ Bell, stated: “Because of this complicated method, many are compelled to take issues into their very own palms to be reunited with their hard-earned cash.”
Mr Selby slammed HMRC for leaving the system unchanged since 2015 and stated there was “no signal of a retreat” within the variety of pension overtaxation claims it was processing.
“It’s now over a decade since pension freedoms and versatile pension withdrawals have been launched, and HMRC is but to handle one of many enduring flaws in its method to taxing those that select to flexibly entry their pension pots,” he added.
“However these figures are more likely to solely barely scratch the floor, as they solely seize those that fill within the related HMRC reclaim kind. In actuality, many can be reliant on HMRC placing their affairs so as after the top of the tax yr.”
In the event you full any of the above kinds, it’s best to be capable of get your a refund inside 30 days.
Mr Selby added: “A method savers planning to take a single withdrawal in a tax yr can probably keep away from the shock of a giant overtaxation invoice is by taking a notional withdrawal first.
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“This could imply HMRC is ready to apply the proper tax code to the second, bigger withdrawal.”
He added: “Alternatively, you possibly can fill out certainly one of three HMRC kinds, and it’s best to obtain your tax again inside 30 days. In the event you don’t do that, the Income says it can put you again within the right tax place on the finish of the tax yr.”
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