HM Revenue & Customs (HMRC) repaid more than £44m to pension savers in the first quarter of 2026, as its latest update also provided further detail on how the increase to the normal minimum pension age (NMPA) will operate in practice.

Figures published in HMRC’s April 2026 pensions newsletter showed that 13,942 repayment claims were processed between January and March, with a total value of £44.1m.

Quilter retirement specialist, Adam Cole, said the data highlighted ongoing issues with the taxation of flexible pension withdrawals.

“While the number of reclaim forms is down by around 9 per cent compared with the same period last year, the total amount repaid has barely changed, which is a telling detail.

“The real shift is not the number of people affected, but the size of the mistakes being made. The average repayment has risen to just over £3,160, up almost 10 per cent year on year.”

Cole argued that the issue stemmed from the PAYE system, which was “designed for predictable monthly earnings, not ad hoc pension withdrawals”, resulting in overpayments that must later be reclaimed.

He also warned that the issue is being exacerbated by wider tax pressures, including the continued freeze on the personal allowance until April 2031.

“Until pension taxation better reflects how people actually access their money in retirement, thousands of savers will continue to face unnecessary complexity and cashflow disruption,” he added.

Alongside the repayment figures, HMRC also provided further clarity on the planned increase in the NMPA from 55 to 57, due to take effect from 6 April 2028.

The update confirmed that transitional arrangements will allow individuals who have already accessed, or become entitled to, pension benefits before that date to continue receiving payments without interruption.

In particular, members aged 55 or 56 before April 2028 who have already designated funds, purchased an annuity, or started a scheme pension will be able to continue receiving those benefits as authorised payments after the change.

However, HMRC clarified that any further benefits crystallised after 5 April 2028 will generally require the individual to have reached age 57, unless a protected pension age or other exception applies.

Nucleus technical director, Andrew Tully, said the clarification was welcome but limited in scope.

“This is much-needed clarification by HMRC, but it feels like the minimum possible flexibility which could be offered,” he stated.

“Allowing people who have already started to take benefits to continue to do so makes sense. However, many people gradually phase benefits, and this will mean that the process will have to be paused and no further benefits can be crystallised until the individual reaches age 57, creating planning issues for some people.”

Tully also warned that some savers may look to crystallise benefits ahead of the 2028 deadline to retain flexibility.

Cole added that the changes would particularly affect those approaching retirement in the early 2030s.

“The group that needs to pay closest attention is those born between 6 April 1971 and 5 April 1973,” he said.

“Under the old rules, they would have expected to access their pension at 55, but if they have not taken benefits before April 2028, they may need to wait up to two additional years.”

Cole stressed that the changes reinforced the importance of forward planning for those intending to use pensions to bridge the gap between work and later retirement.

HMRC said further details on the transitional regulations will be provided once draft legislation is published for consultation.

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