HMRC urges anyone aged 55 and over to come forward for free £3,691

Anyone over 55 could be owed £3,691 by HMRC due to a tax trap. New figures from HMRC, which is now working under the Labour Party government, today revealed that almost £44.3million was refunded to retirees between July and September 2024 alone.

Jon Greer, head of retirement policy at Quilter, expressed concern about the system's flaws. John said: “The PAYE system is designed for regular income and struggles with the complexities of flexible pension withdrawals.

"As a result, many pensioners are overtaxed, and the refund process can be frustratingly slow." Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said in a statement today (Thursday): “The tax bill can come as a nasty surprise for people expecting to access their savings without a hitch and can throw off financial plans."

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Jon said: “It is vital that those considering pension withdrawals amid these budget rumours seek professional financial advice. Advisers can help structure withdrawals effectively, ensuring savers do not fall foul of the tax system’s pitfalls.

“Until the system is changed, we are likely to continue seeing many savers caught out and forced to reclaim significant sums of money.” To claim back yourself, you will need to fill out one of three different forms - which will depend on how you have accessed your retirement pot and your personal circumstances:

• P53Z form - If you’ve emptied your pension pot and are still working or receiving benefits
• P50Z form - If you’ve emptied your pension pot and aren’t working or receiving benefits
• P55 form - If you’ve only accessed part of your pension pot

You can get these forms on GOV.UK, and you can fill out these forms online or send them in the post, HMRC explains on its website. If filled out correctly, HMRC says you will get your tax refund within 30 days.