Pension savers pummelled by millions in tax overpayments – ‘it’s a disgrace!’ | Personal Finance | Finance

“It would be much fairer simply to deduct basic rate tax from pension withdrawals and then adjust the amounts paid if this did not give the right answer, rather than overtaxing thousands of people every month.”

Jon Greer, head of retirement policy at Quilter, has described the system as “clunky”.

He added: “It’s a little known quirk of the PAYE system that often results in considerable tax overpayments.

“This highlights the importance of getting financial advice before touching your pension. HMRC will make a repayment automatically, but this could take some time so if you want a refund to come through more quickly, then make a repayment claim yourself to avoid waiting for HMRC.