HMRC has admitted to overtaxing roughly 1.4 million pensioners last year after an error in the way it calculated state pension tax.
The mistake, which dates back more than a decade, has led to retirees being overcharged since 2010-11.
In 2024-25 alone, the tax office collected more than £2 million in excess tax from pensioners.
In a letter to the Chair of the Public Accounts Committee, HMRC’s chief executive, John-Paul Marks, apologised for the error.
He said: ‘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.
‘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.’
In total, roughly 1.4million pensioners paid too much tax last year, which was up from 1.17million in 2023-24 and 762,000 in 2022-23.
In addition, 955,000 pensioners in self assessment and 760,000 in simple assessment may have paid too much tax last year due to the wrong state pension figure being used in HMRC’s calculations, The Telegraph report.
Most affected pensioners overpaid by around £2 on average, although the issue has potentially impacted millions of people since it first arose.
At the moment, HMRC has not said it will automatically refund everyone who has overpaid.
Instead, in a statement to Metro, HMRC said that customers who believe they may have paid too much tax should contact the department through its usual channels.
This can be done either through phone helplines, online digital assistants, webchat or you can write to them through the post.
To find specific contact details based on your tax query, you can use the official HMRC Contact Finder.
This comes after it was revealed last month that up to 8.7million pensioners may have paid too much tax last year.
According to the Sunday Times, the issue was flagged in August last year by Tory MP Richard Holden, but was not officially reported to the Department for Work and Pensions (DWP) until October.
Dan Tomlinson, the minister responsible for HMRC, previously said ‘most pensioners pay the right amount of tax in real time.’
But he added: ‘HMRC has become aware 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.’