Pension over-taxation: major breakthrough
HMRC pledges to improve how tax code information is used after pensioners reclaim £50 million in the past three months.
22nd January 2025 16:09
by Myron Jobson from interactive investor
- In a recent pensions schemes newsletter, HMRC stated from April 2025 it will improve how tax code information is used for those people who are new to receiving a private pension, so they pay the right amount of tax from the outset
- From 1 October 2024 to 31 December 2024, HMRC processed refunds totalling £49,514,458.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Automatically updating tax codes for pensioners on temporary codes is a significant step forward in simplifying what can often be a confusing process.
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“For too long, pensioners have borne the brunt of systemic inefficiencies, with many unknowingly overpaying tax and waiting months for refunds. The recent revelation that HMRC refunded nearly £50 million in just three months underscores the scale of the issue.
“This change not only ensures that pensioners are taxed more accurately in real time but also reduces the financial and emotional stress of overpayment.”
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