It happens more often than you might think. Thousands of people overpay tax on pension withdrawals or other income like benefits and pensions in the current tax year. HMRC figures show that in the last quarter of 2025 alone, over £46 million was repaid to savers who flexibly accessed their pensions and faced emergency tax codes.

In February 2026, with the 2025/26 tax year well underway, many are still discovering they have overpaid. The good news is you can claim it back, often quite quickly if you act during the year.

Common reasons include emergency tax applied to first pension lump sums, incorrect tax codes on state or private pensions, or unused personal allowances when mixing pension and other income.

Here is a clear guide to spotting overpayments and getting your refund.

Why Overpayments Happen on Pensions

When you flexibly access a pension (taking more than the 25% tax-free lump sum), the provider often applies an emergency tax code. This treats the payment as if it is your only income for the year, sometimes taxing at higher rates like 40%.

In reality, your total income might stay within the basic rate band or even under the £12,570 personal allowance. This leads to over-taxation.

HMRC repays these amounts routinely. Recent data shows average refunds around £3,300 to £3,400 per claim for flexible withdrawals.

Similar issues arise with:

  • State pension plus part-time work (personal allowance applied only to earnings)
  • Private pensions where tax codes do not reflect full allowances
  • Benefits or other income not adjusting PAYE correctly

If your tax code looks wrong or you received a large deduction, check your position.

Check If You Are Owed a Refund

Start by reviewing your payslips, P60 (end-of-year certificate), or pension statements. Look for unexpected high deductions.

HMRC may send a P800 letter if they spot an overpayment, but do not wait for it. You can claim proactively.

For flexible pension access, if you took only part of your pot and will not take more regular payments this year, you qualify for a mid-year refund.

Other cases include overpaid tax through PAYE on employment, pensions, or benefits.

You generally have four years from the end of the tax year to claim, but acting sooner gets money back faster.

How to Claim Your Refund

The process depends on your situation.

For overpaid tax on flexible pension withdrawals in the current year:

Use form P55. Download it from GOV.UK or fill it online where available.

Provide details of:

  • The pension payment and tax deducted
  • Expected other income this tax year
  • Why the pension provider could not refund directly

HMRC aims to repay within 30 days if everything is correct, often via Faster Payments.

If you have fully accessed the pension pot, different forms apply like P53Z or P50Z depending on employment status.

For general PAYE overpayments (including state/private pensions or benefits):

Contact HMRC through your personal tax account online. Update your tax code or request a refund.

If the tax year has ended, claim via Self Assessment or a simple refund form.

Many use HMRC’s online services or helpline (0300 200 3300) for guidance.

Keep records like P45, P60, or pension statements handy.

Tips to Avoid Future Overpayments

Ask your pension provider or employer to apply the correct tax code early.

If mixing incomes, inform HMRC of changes promptly.

Review your tax code annually via your personal tax account.

Professional help from an accountant speeds things up, especially with complex cases.

Stay on Top of Your Records

Good organisation makes claiming easier and helps spot issues early. For those running businesses or checking company details alongside personal tax, fast access to public records supports overall admin.

The Companies House on the Go app lets you search company information, view filings, confirmation statements, and updates straight from your phone.

Download for iOS: https://apps.apple.com/us/app/uk-companies-house-on-the-go/id6743302358

Or Android: https://play.google.com/store/apps/details?id=com.companiesonthe.go

For more on efficient company and admin management, visit Companies on the Go.

Overpaid tax on pensions or benefits is common but fixable. In 2026, with ongoing flexible access and PAYE adjustments, many reclaim thousands without much hassle.

Check your statements, use the right HMRC forms like P55, and submit promptly. Most refunds come quickly once processed.

Do not leave money sitting with HMRC. Claim what is yours and use it where it matters most.

If unsure, reach out to HMRC or get advice. Small steps now can make a big difference to your finances.