HMRC admits error affecting 1.4 million pensioners
HMRC has acknowledged that approximately 1.4 million pensioners were overtaxed last year due to a mistake in how state pension tax was calculated. The error, which has persisted since the 2010-11 tax year, led to over £2 million in excess tax collected in 2024-25 alone.
Chief executive apologises
In a letter to the Chair of the Public Accounts Committee, HMRC chief executive John-Paul Marks apologised for the error. 'I apologise for this error and especially to those pensioners who have been affected. I know that any shortfall matters, particularly to customers on fixed or limited incomes,' he wrote. 'I would like to reassure the Committee that HMRC is taking this issue very seriously and we are working at pace to put in place a solution.'
Scope of the overpayment
The number of affected pensioners has risen sharply: from 762,000 in 2022-23 to 1.17 million in 2023-24, and now 1.4 million in 2024-25. Additionally, 955,000 pensioners using self-assessment and 760,000 using simple assessment may have overpaid due to incorrect state pension figures used in HMRC's calculations, according to The Telegraph. On average, overpayments were around £2 per person, though the cumulative impact since 2010-11 is substantial.
No automatic refunds yet
HMRC has not announced automatic refunds. Instead, the department told Metro that customers who believe they have overpaid should contact HMRC through normal channels. This follows reports that up to 8.7 million pensioners may have overpaid tax last year.
Timeline and political reaction
The issue was flagged in August 2025 by Tory MP Richard Holden, but was not formally reported to the Department for Work and Pensions until October, according to the Sunday Times. Dan Tomlinson, the minister responsible for HMRC, previously stated that 'most pensioners pay the right amount of tax in real time,' but acknowledged that 'for a subset of individuals in receipt of the state pension, a calculation error means that their tax is calculated based on 52 weeks at the new rate. The difference in tax owed is approximately £5. Affected individuals can call HMRC to amend any incorrect figures of state pension.'
