This month, we have some great news to share about our upcoming inclusion in the VouchedFor Top Rated Guide in the Telegraph.

Plus, we often get queries about emergency tax on pension withdrawals, and we thought it would be helpful to share an update here. As ever, if you have any queries, we’ll always be happy to help.

Look out for Intelligent Pensions in the VouchedFor Top Rated Guide in the Telegraph

We’re delighted to confirm that Intelligent Pensions, and all 11 of our financial planners, will feature in VouchedFor’s Top Rated Guide when it’s published in the Telegraph on 24 June.

As we shared earlier this year, Intelligent Pensions has been recognised as a Top Rated Firm, while each of our planners achieved Top Adviser status. These accolades are based entirely on verified client feedback, making them especially meaningful to everyone at Intelligent Pensions.

We would like to extend a sincere thank you to all our clients who have taken the time to leave a review and share their experiences. Your feedback not only helps us continually improve the service we provide but also helps others who are looking for trusted financial advice.

We’re incredibly proud to see this recognition featured in a national publication and grateful to our clients for the trust and support that made it possible.

Taking pension withdrawals? Understanding emergency tax

We regularly receive client queries about emergency tax on pension withdrawals, so we thought it would be helpful to share an update.

The industry has long hoped that HMRC would simplify the way emergency taxation is applied to pension withdrawals, but this has yet to happen. As a result, the current process can still lead to some clients paying more tax than initially expected.

As always, we’ll discuss this with you at the point you are considering a withdrawal, so there should be no surprises. However, we hope this update provides some useful background on how the process works and what to expect.

If you’re taking money from your pension through flexi-access drawdown, it’s important to be aware that your first withdrawal, and sometimes later one-off income payments, may be subject to an emergency tax code.

This is a process determined by HMRC and applies across the pension industry. Neither your pension provider nor your financial planner can influence the tax code applied to an initial payment before HMRC has issued the correct information.

When a pension provider does not yet have the correct tax code from HMRC, they are required to apply an emergency tax code to the payment. This can result in more tax being deducted than is ultimately due, particularly if the payment is made shortly after the start of a new tax year.

For clients taking regular withdrawals, this is often a temporary issue. HMRC will usually provide the correct tax code to the pension provider after the first payment, and your tax position will typically be adjusted automatically through subsequent payments during the tax year.

If you’re taking a one-off lump sum withdrawal, any overpaid tax may not be corrected immediately. In this situation, you have two options:

  • Wait until the end of the tax year, when HMRC will review your tax position and refund any overpaid tax.
  • Apply for a refund directly from HMRC, which may allow you to receive the money sooner.

The form required to reclaim overpaid tax depends on your circumstances, including whether you have fully withdrawn your pension or only taken part of it, and whether you have other sources of income.

While emergency taxation can be frustrating, it is a standard HMRC process rather than a decision made by your pension provider or financial planner.

If you’re considering taking a pension withdrawal and would like to understand the potential tax implications, please speak to your financial planner, who will be happy to help explain what to expect.

Get in touch

If you’d like to discuss pension withdrawals or any aspect of financial planning, we’d be happy to help. Email hello@intelligentpensions.com or call 0800 077 8807.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.