Savers forced to dip into pensions early could pay double tax

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Fears savers will end up paying double tax if forced to dip into pensions early in the coronavirus crisis

By Ben Wilkinson for the Daily Mail

Published: | Updated:

Former pensions minister Steve Webb warns that overtaxing on pension withdrawals will be worse in lockdown

Savers forced to dip into their pension early in the coronavirus crisis could also be forced to pay more tax than they need to.

Former pensions minister Steve Webb today warns that overtaxing on pension withdrawals will be worse in lockdown. 

HMRC taxes some savers more than it should when they make one-off lump sum withdrawals, because it assumes the amount withdrawn will be taken as regular income — leaving the saver to reclaim overpaid tax. 

But falling income may mean many should be paying lower rates of tax, too. Mr Webb wants HMRC to think again.

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