Savers have now reclaimed £305million in overtaxed payments since reforms launched in 2015 (see attached spreadsheet)
Average value of each reclaim is £2,400 – although this only covers those who have filled out official forms
Tom Selby, senior analyst at AJ Bell, comments:
“HMRC’s insistence on overtaxing people on their first pension freedoms withdrawal runs counter to the reforms and risks causing unnecessary financial hardship to millions of people.
“While it is good that over £300million has now been repaid to savers through the official forms, the reality is most people who are overtaxed do not fill out these forms and so rely on HMRC to reimburse them – a process that could take months.
“The level of overtaxation is therefore likely to be significantly higher than the official figures quotes by the Government. We urge HMRC to at the very least review its approach to the taxation of pension freedoms withdrawals, which was never consulted upon and has already caused huge problems for hundreds of thousands of people.”
Source: HMRC pension scheme newsletters