Newly published statistics from HM Revenue and Customer that show it paid back over £26m of overpaid income tax to those who accessed their pensions have sparked outrage.

Earlier this week HMRC published its quarterly release on the pension freedoms for the second quarter of 2017, which revealed a total of £1.8bn had been accessed in the quarter.

It has now released information on the number of tax repayment claim forms (P55s, P53Zs and P50Zs) processed in respect of pension flexibility payments. In total throughout the second quarter the department processed 6,070 P55 forms, 3,408 P53Z forms and 1,098 P50Z forms. The total value repaid came to £26,835,357.

Commenting, Royal London Director of Policy Steve Webb said: “It is outrageous that in just three months HMRC has over-taxed people by more than £26m. It cannot be acceptable to take thousands of pounds per person in excess taxes and then expect people to have to claim that money back. The rules need to be changed so that only basic rate tax is deducted and any extra tax due is collected through the normal tax return process. This would be a far fairer system”.

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