Shadow Chancellor Rachel Reeves has launched a scathing attack on the Department for Work and Pensions (DWP) following revelations that 210,000 state pensioners received incorrect tax codes – with many now facing unexpected tax bills.
Pension Tax Chaos
The DWP admitted this week that errors in its systems led to incorrect PAYE tax codes being issued to thousands of pensioners between 2020 and 2023. The blunder means many retirees unknowingly underpaid tax on their state pension income.
Reeves Demands Action
In a letter seen by The Independent, Reeves wrote: "This is yet another example of pensioners being let down by this government's incompetence." She has demanded urgent clarification on:
- How the errors occurred
- What support will be offered to affected pensioners
- Measures to prevent future mistakes
Financial Fallout
Analysis by investment platform AJ Bell suggests some pensioners could face tax demands running into hundreds of pounds. Tom Selby from AJ Bell warned: "Many pensioners on fixed incomes will understandably be worried about unexpected tax bills."
The DWP has stated it is working with HMRC to correct the errors, but critics argue the damage to trust in the pension system may take years to repair.
