23 April 2026
Pension flexibility statistics
“HMRC’s latest figures show that between January and March 2026 almost 14,000 people had to reclaim tax after accessing their pension flexibly, with more than £44.1m repaid in just three months. While the number of reclaim forms is down by around 9% 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% year on year. That suggests fewer people may be caught by emergency tax, but when it happens the sums involved are larger, leaving retirees out of pocket while they wait for HMRC to return their own money.
"PAYE was designed for predictable monthly earnings, not ad hoc pension withdrawals, and as a result it continues to generate avoidable overpayments that have to be corrected after the fact.
“All of this is happening at a time when tax pressure on retirees is increasing. With the personal allowance frozen until April 2031 and the state pension taking up a growing share of it, more people are being dragged into tax. When flexible pension withdrawals are then layered on top, emergency tax becomes more likely and more costly.
“HMRC has improved the speed of repayments, but these figures show the system is still fixing errors rather than preventing them. 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. In the meantime, careful planning and professional advice remain essential to avoid paying too much tax at the point of withdrawal.”
Normal minimum pension age details
“The newsletter also highlights more detail about the upcoming changes to the normal minimum pension age, which is due to rise from 55 to 57 in April 2028. While the direction of travel has been clear for some time, HMRC’s latest update focuses on how the rules will work in practice and who will be treated as having authorised access once the change takes effect.
“In broad terms, the draft regulations are functional rather than radical, providing reassurance that access at 55 will continue to be treated as an authorised event for those who already qualify. For most savers, that brings greater clarity rather than new risk.
“The group that needs to pay closest attention are those born between 6 April 1971 and 5 April 1973. 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. For anyone planning to use pension withdrawals to bridge the gap between work and later retirement, that makes timing and forward planning far more important.”
