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Thousands of pension savers overpaid their taxes by £56million in total in the last three months.
Savers are urged to check if they could be owed on average up to £3,550 each after new results show HMRC they processed around 16,000 tax refund claims in the last three months.
Usually, people can take the first 25 percent of their pension tax-free, and anything over that is taxed.
However, when taking a lump sum, they can be taxed at an emergency rate and end up paying more than they are meant to.
Anyone accessing their retirement savings over the age of 55 could be overpaying.
People can make a repayment claim yourself if they don’t want to wait, otherwise, they’ll get it back at the end of the tax year.
The exact amount one will get back is dependent on what was taken for their pension, other income they have if any and their tax rate.
John Greer, head of retirement policy at Quilter, said: “This emergency tax situation can be particularly frustrating for people trying to access their funds quickly.
“It arises due to an oddity within the PAYE system when people start to take money from their pension as they are not taxed using the correct tax code.
“The cost-of-living crisis is putting real pressure on everyday finances and people may be considering accessing their pension flexibly as a result.
“The system is in real need of an overhaul, as the current process is leaving an increasing number of people facing emergency tax at a time they need their money most.”
How to claim a tax refund
Britons can use the Government website to find out what specific form they need to fill out to claim their refund.
If someone has withdrawn all of their pension, and they’ve stopped working, they should fill in a P50Z form.
People who are still working but have emptied their pension pot should return a P53Z form.
But if someone has taken out a chunk, they need to submit a P55 form.
It could take up to six weeks for someone’s money to be returned.
