Pensions over-taxation ‘scandal’ hits record level of £47m

Pension savers hit with the emergency ‘Month 1’ tax bills from HMRC for accessing their pension reclaimed a record £47m using official forms in Q2 2019, according to latest figures.

HMRC’s figures show that the total amount reclaimed now stands at £480m since the reforms were introduced in 2015. The average reclaim has risen from £2,003 in Q2 2018 to £2,715 in Q2 2019
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Royal London director of policy and external communications Steve Webb said: “‘It remains a scandal that people who are legitimately accessing their own money, using freedoms given to them by the government, are routinely being over-taxed for the convenience of HMRC.

“Thousands of people every month are having to fill in complex paperwork to recover tax they should never have had to pay. The latest figures show that this problem is now reaching epidemic proportions, with nearly half a billion pounds having to prised out of HMRC’s hands and returned to its rightful owner. The new Chancellor needs to address this issue as a matter of urgency.”
 

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