Cashed In Your Pension? You Could Be Owed Money

Have you taken cash from your pension since 2015? If so, you may have overpaid tax, and be due a refund from HMRC. The new “pension freedoms” that the government introduced allow people to cash in their entire pension at once, after the age of 55. But the taxman will have applied the “emergency” tax code to such a withdrawal, and that may have pushed it into a higher tax bracket. You should be refunded the difference eventually, but you can also apply now, to speed up the process.

The Telegraph reports

“So a basic-rate taxpayer might be pushed into a higher tax bracket by cashing in a typical £50,000 pension pot in a single transaction… The tax office will eventually refund the excess tax paid but this could take more than a year, leaving pensioners with thousands of pounds less than they expected… However, you can write to HMRC to claim your overpaid tax more quickly. Recent figures show that around 10,000 people did this between July and October, receiving £29.7m back… Savers should visit the Government’s website to reclaim tax through one of three forms. Whether or not you are receiving any other income determines which form you should use.”