{"id":795422,"date":"2026-10-08T01:38:18","date_gmt":"2026-10-08T01:38:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/795422\/"},"modified":"2026-10-08T01:38:18","modified_gmt":"2026-10-08T01:38:18","slug":"hmrc-handing-out-19-3m-in-payments-to-millions-of-state-pensioners","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/795422\/","title":{"rendered":"HMRC handing out \u00a319.3m in payments to millions of state pensioners"},"content":{"rendered":"

It comes after HMRC admitted an error after using the wrong state pension figures to calculate the tax owed by some pensioners\"A<\/p>\n

Individual payments will vary(Image: Getty)<\/p>\n

HMRC is handing out \u00a319.3million in payments to millions of pensioners who were overtaxed on their state pension. Around 3.2million pensioners will receive a refund<\/a>, with individual payments varying.<\/p>\n

It comes after the tax office acknowledged earlier this year a mistake<\/a> in which it used incorrect state pension figures to calculate the tax owed by some pensioners.<\/p>\n

The state pension<\/a> increases every April, but the rise does not always take effect on the first day of the new tax year. The higher rate frequently comes into force a few days after April 6.<\/p>\n

Click here<\/a> to get the biggest stories straight to your inbox in our Daily Newsletter<\/p>\n

As a result, HMRC rules state<\/a> that it should calculate your annual taxable state pension using one week at the previous tax year’s lower rate and 51 weeks at the new higher rate.<\/p>\n

However, the tax office has charged some pensioners the higher rate for the full 52 weeks, which means those affected will have paid more tax than they should have.<\/p>\n

HMRC is set to refund \u00a319.3M to around 3.2 million people, with the average repayment being around \u00a36 per person, though it will vary between individuals.<\/p>\n

The Government body will issue refunds automatically by adjusting PAYE tax codes, crediting self-assessment accounts or through other payment methods where necessary. It expects to complete this process during the 2026\/27 financial year.<\/p>\n

The Telegraph, which first uncovered the discrepancy, reports that the error dates back 15 years. However, the HMRC correction exercise will only go back as far as the 2020\/21 tax year.<\/p>\n

HMRC advises anyone who believes they were affected beyond this date to get in touch, and these requests will be considered on a case-by-case basis.<\/p>\n

In a letter to the Treasury Select Committee (TSC) last month, HMRC chief executive John-Paul Marks said: “I am sorry that this error occurred and recognise the impact on affected customers.<\/p>\n

“As set out in my earlier letter, we will also conclude an Internal Audit review, ensuring the lessons are identified and applied in future.”<\/p>\n

The state pension increases annually in line with the triple lock pledge, which guarantees it rises by whichever is highest out of inflation, wages or 2.5%.<\/p>\n

Don’t let an algorithm decide what Manchester news you see – click here to add the MEN as your preferred Google source<\/a><\/p>\n

Fresh figures reveal that average wage growth, including bonuses, stood at 3.9% in the three months to July. By comparison, inflation currently sits at 3.1%.<\/p>\n

The new state pension is presently worth \u00a312,547.60 a year but would increase to \u00a313,036.40 if a rise of 3.9% is applied. This would also take the state pension above the \u00a312,570 tax-free allowance, which represents the amount you can earn each year before becoming liable for tax.<\/p>\n

The Treasury has confirmed that those whose sole income is the state pension “without any increments” will not be required to pay income tax – though it has yet to clarify precisely how this will work.<\/p>\n","protected":false},"excerpt":{"rendered":"It comes after HMRC admitted an error after using the wrong state pension figures to calculate the tax…\n","protected":false},"author":2,"featured_media":795423,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,2218,2222,1447,4178,4174,4175,2221,56,54,55],"class_list":["post-795422","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-hmrc","tag-money","tag-pensioners","tag-pensions","tag-personal-finance","tag-personalfinance","tag-state-pension","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/795422","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=795422"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/795422\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/795423"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=795422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=795422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=795422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}