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Thousands of pensioners could be owed hundreds - in many cases thousands - of pounds after being overtaxed when accessing their retirement savings, new figures have revealed. According to the latest pension flexibility statistics from HMRC, nearly 14,000 people submitted claims between January and March 2026 to recover tax paid on flexible pension withdrawals. In total, more than £44.1million was repaid over the three-month period.

While the number of claims has fallen by around 9% compared with the same period last year, the total amount refunded has remained largely unchanged, sparking growing concern about the scale of overpayments. Adam Cole, a retirement specialist at Quilter, has said the figures point to a shift in the size rather than the frequency of errors.

"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," he said.

"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."

The issue stems from the PAYE system, which is designed for regular monthly income rather than one-off or irregular pension withdrawals. As a result, many retirees are initially taxed too heavily when accessing their savings flexibly.

Mr Cole added: "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."

The problem is being compounded by wider tax pressures. The personal allowance has been frozen until April 2031, while the state pension is taking up an increasing portion of that allowance, dragging more retirees into the tax net.

"When flexible pension withdrawals are then layered on top, emergency tax becomes more likely and more costly," Mr Cole said.

Although HMRC has sped up the repayment process, he warned that the system is still reactive rather than preventative.

Mr Cole said: "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."

He urged retirees to plan carefully before making withdrawals, adding that professional advice can help avoid overpaying tax upfront.

Separately, HMRC has provided further detail on changes to the regular minimum pension age, which is set to rise from 55 to 57 in April 2028. The updated guidance clarifies how the rules will work in practice, particularly around who will still be able to access their pension at 55.

Mr Cole said the changes are largely reassuring for most savers: "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."

However, he warned that a specific group could be caught out - those born between April 6, 1971 and April 5, 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 those planning to use pension withdrawals to bridge the gap between stopping work and later retirement, the change could have significant financial implications, Mr Cole warned, adding: "That makes timing and forward planning far more important".