The tax department may write to you if you owed a tax refund
HMRC has provided an update regarding tax refunds for pensioners. The department clarified its rules in response to a query from a taxpayer.
The person said they planned to retire at the end of April, becoming a “non taxpayer”. They queried whether it would be more beneficial to adjust their salary for the upcoming 2026/2027 tax year now to “claim back the tax”.
In response, the department first asked them to specify if they would have a “continuing UK source of income” post-retirement. The person confirmed that their income would solely come from pensions and that their total income would fall “below the personal allowance”.
According to the personal allowance, you can earn up to £12,570 each tax year without being liable for income tax on this amount. HMRC offered this advice to the taxpayer: “So once you retire and you’ve got your P45, you can contact the helpline and we can take the details over the phone.
“We’ll use the P45 info and instruct your pension provider to refund any overpaid tax through your pension payments.” Another aspect to consider when planning for retirement is your state pension.
Changes to the state pension
You become eligible for the state pension upon reaching 66 years of age. Nevertheless, this is set to change imminently, with the qualifying age rising from April 2026.
It will gradually increase to reach 67 by April 2028. The full new state pension presently stands at £230.25 weekly, equivalent to £11,973 annually.
The triple lock policy will boost payments by 4.8 per cent from April, lifting the full new rate to £241.30 per week, or £12,547.60 annually, marginally beneath the personal allowance threshold You can check how much state pension you’re projected to receive using an online tool on the Government website.
Should you have been taxed incorrectly by the end of the tax year, which ends on April 5, HMRC will typically get in touch regarding the discrepancy.
The revenue service will dispatch either a tax calculation letter, commonly referred to as a P800, or a simple assessment letter. You will only receive one of these letters if you’re in employment or drawing a pension.
The letters are dispatched between June and March of the next tax year. If you’re registered for self assessment, HMRC will automatically amend your bill and no letter will be issued.
If you think you are owed an amount but you don’t get a letter, there is an online tool available on the Government website to determine whether you’re entitled to claim a refund.