HM Revenue & Customs (HMRC) has processed repayments totalling more than £50 million to pension savers who were overtaxed on flexible withdrawals, according to newly released official figures. Between April and June 2026, over 12,500 individuals reclaimed overpaid tax, with the average repayment reaching nearly £4,000 per person.
The total sum refunded during the second quarter of the year stood at £50,353,656.76, as revealed by HMRC data. This follows widespread issues with emergency tax codes applied to flexible pension access, which have left many retirees out of pocket while awaiting reimbursement.
Breakdown of Repayment Forms Processed
In the period from April 1 to June 30, HMRC processed 10,200 P55 repayment forms, 2,001 P53Z forms, and 411 P50Z forms. These forms are used by individuals who have taken flexible payments from their pension and need to reclaim tax deducted under emergency codes.
The scale of the issue highlights ongoing administrative challenges, as pension savers continue to face delays in receiving their own money back from the tax authority.
Expert Calls for Faster Reimbursement Process
Adam Cole, retirement specialist at wealth manager Quilter, commented on the figures: “HMRC’s latest figures show that between April and June 2026 more than 12,500 people had to reclaim tax after accessing their pension flexibly, with more than £50.3million repaid in the second quarter of the year.”
Cole stressed the financial impact on retirees, noting: “The average repayment stands at almost £4,000, not an insignificant amount of money. 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.”
Political Context: Personal Allowance Freeze Under Scrutiny
The repayments come amid broader debates about pensioner finances and tax policy. Prime Minister Andy Burnham has been urged to make changes to the £12,570 personal tax-free allowance, particularly as state pensioners face the cost of living crisis.
Cole noted that “the new Government has backed away for now from the idea that the personal allowance should be unfrozen and uplifted.” He added that state pensioners still face financial pressures despite annual increases under the triple lock, saying: “A move that would help pensioners and reduce their administrative burden given how close the state pension is to that allowance.”
The Makerfield MP has vowed to keep the triple lock in place, with Chancellor John Healey due to deliver the Autumn Budget in October. Healey has confirmed October 28 as the date for the fiscal statement in the House of Commons.
Impact on Pension Savers
The average repayment of nearly £4,000 represents a significant sum for many households, yet the process of reclaiming overpaid tax can be complex and time-consuming. For those who have accessed their pension flexibly, emergency tax codes often result in excessive deductions, requiring proactive steps to reclaim what is owed.
While HMRC has processed these repayments, the continued frequency of such errors suggests systemic issues that may require policy intervention. As the Autumn Budget approaches, campaigners and financial experts are calling for measures to simplify the tax system for pensioners and prevent future overpayments.
