Data released by HMRC to Royal London under freedom of information legislation reveals that some pensioners have received tax refunds of more than £100,000.

Pensioners who make one-off withdrawals from their pension pots can find themselves overpaying after being subjected to an emergency tax rate.

Around 60,000 pensioners claimed refunds in the 2023/24 tax year, up 20 per cent on the previous year, according to the figures.

Some 11,700 pensioners claimed back £5,000 or more, with 2,400 given refunds of £10,000 or more.

The average refund in 2023/24 was worth £3,342, a nine per cent increase on the previous year – while the top 25 refunds averaged at £106,900.

Clare Moffat, pension expert at Royal London, said: “It’s incredible to think that some people withdrawing from their pension for the first time were entitled to emergency tax refunds in excess of £100,000.

“Not only do these taxes usually come as a massive shock, the unexpected tax amount can also scupper people’s carefully laid plans.

“HMRC recently announced an overhaul of its emergency taxing codes on pensions, which it promises will deliver quicker refunds, but that doesn’t mean people won’t still be charged the higher rate in the first place.”

A spokesperson for HMRC said: “Ultimately, nobody overpays tax as a result of taking advantage of pension flexibility.

“We will repay anyone who pays too much because they’re on an emergency tax code and individuals can claim a repayment much earlier if they wish.”