Overtaxed Pensions

by | Jun 4, 2024 | Insights

The overtaxation pensions bill has passed a hefty £1.2billion after a record £198million was repaid to savers in the 2023/24 tax year, according to figures from HM Revenue & Customs. In the first three months of this year alone more than £48.5million was repaid to people overtaxed on pension withdrawals.

This highlights just how much the tax system needs an overhaul to handle people accessing pension savings flexibly from age 55, via the pension freedoms. After nine years those accessing pensions shouldn’t be hit with shock tax bills and have to claim back overpaid tax or wait for HMRC to repay at the end of the tax year.