Overview

• HMRC processed 12,767 claims in Q2 2025, refunding £48.7 million to overtaxed pensioners, averaging nearly £4,000 per person
• Since 2015’s pension freedoms reforms, more than £1.2 billion has been returned to over 574,000 savers after excess tax deductions
• Emergency PAYE tax codes treat initial or irregular pension withdrawals as monthly income, resulting in steep upfront withholdings
• System updates earlier this year automated coding for regular payments but left first withdrawals subject to emergency rates
• Experts including Steve Webb and Helen Morrissey are urging HMRC to implement at-source taxation to remove reclaim burdens