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The latest data from HM Revenue and Customs (HMRC) shows that the tax body issued £48.7 million in refunds between April 1 to June 30 for overpaid tax on pension withdrawals. Retirement expert Helen Morrissey said that the figures indicates close to 13,000 refund forms were processed during that timeframe with the average refund worth around £3,800. ‌

Ms Morrissey explained that people accessing a lump sum from their pension for the first time can be taxed too much. The main reason is that the HMRC system mistakenly believes that the same amount will be withdrawn every month, which can lead to an unexpected tax bill. ‌

However, the head of retirement analysis at Hargreaves Lansdown explains the money can be reclaimed from HMRC, but it can be an ‘admin headache’. ‌

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