Pension withdrawals: an emergency best avoided

Many savers are paying too much tax on their pension withdrawals, says David Prosser.

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HMRC's emergency tax code is a potential disaster you want to avoid
(Image credit: Copyright (c) 2015 Shutterstock. No use without permission.)

A flaw in the tax system means tens of thousands of people pay too much tax on pension withdrawals, forcing them to claim refunds from HM Revenue & Customs (HMRC). The problem, first identified when the pensions freedom reforms came into force in April 2015, has now reached epidemic proportions, with the industry calling on HMRC to change its procedures.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.