HMRC is set to repay more than £50 million to pension savers who were overtaxed when accessing their retirement funds. Figures show that over 12,500 people reclaimed overpaid tax on flexible pension withdrawals between April and June 2026, with HMRC refunding a total of £50,353,656.76 during the three months. The average repayment per person was around £4,000.
Refunds Increase Despite Fewer Claims
Adam Cole, retirement specialist at Quilter, noted that although the number of reclaim forms has fallen compared with the same period in 2025, the total amount refunded has actually increased by £2 million. "The average repayment stands at almost £4,000, not an insignificant amount of money," he said. "Instead, retirees are being left out of pocket while they wait for HMRC to return their own money — a process that could and should be quicker or avoided altogether."
Emergency Tax Codes Cause Overpayments
Overpayments often occur when emergency tax codes are applied when people first access their pension flexibly. This means more tax is deducted than what is owed. These emergency tax codes are applied to the first flexible pension payment before HMRC can accurately register an individual's annual income, creating a mismatch between the tax deducted and what is owed.
Forms Processed and Advice
HMRC has processed 10,200 P55 repayment forms, 2,001 P53Z forms, and 411 P50Z forms between April 1 and June 30, suggesting that these financial issues continue to impact pension savers every year. Pensioners are being urged to check their tax codes to ensure they are not overpaying, and to check whether they are already entitled to a refund from HMRC.
