HMRC Warns Millions of Pensioners About Tax Bills

Millions of UK state pensioners are facing increased tax burdens due to the government’s continued freeze on personal allowance thresholds, which is pushing more retirees into paying income tax as state pensions rise. Experts warn that with the state pension now just £600 below the personal allowance and inflation likely to drive it higher, many pensioners may soon owe income tax even if their only income is from the state pension. Additionally, thousands of pensioners who access their private pensions are being hit with emergency taxes, often overpaying by thousands of pounds and having to navigate a refund process with HMRC. Recent figures show over 15,000 pensioners reclaimed an average of £2,800 each in overpaid tax between January and March, highlighting ongoing issues with the current tax coding system. While HMRC is working to streamline tax codes to reduce overpayments, experts and advocacy groups are calling for urgent reform to protect pensioners from unexpected financial strain. The combined impact of frozen thresholds and emergency tax codes is leaving many retirees unprepared for their actual tax bills and creating administrative challenges in reclaiming overpaid amounts.