Have you been over charged on your pension withdrawals by HMRC?

Article by Phil

More “shocking” news from MHRC about how pension savers are being mistreated. Well perhaps not really “shocking” at all, if you work in financial services.
The latest figures from HMRC show that a record £46 million was reclaimed by pension savers in over taxation in the three-month period April – June 2019. That is a massive 37% up on the same period last year and affected 17,000 people.
Why? Well because HMRC continues to apply emergency tax rates to pension savers who are accessing their pension lump sums, under the “new” pension freedoms, which came into force in 2015 – that’s 4 years ago.
These figures are also likely to be vastly underestimated, because HMRC requires you to complete a number of complex tax forms in order to process the refunds, so most are not processed until personal tax rates are re-calculated in the following tax year.
The figure since 2015 is now £480 million.
It really is a scandal that after 4 years the Government/HMRC still hasn’t worked out a fair process for taxing access to pensions and continues to insist on a process of overcharging and refund. This money belongs to the pension holder, not HMRC. It’s a straightforward over charging issue – so where are the FCA in this? What action are they taking to protect consumers?
Very little it seems.

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