How do I claim back emergency tax on a pension withdrawal?

Fill in the right HMRC form: P55 if you took some money and left the rest, P53Z if you emptied the pot and have other income, or P50Z if you emptied the pot and have no other income. HMRC aims to repay within 30 days. If you do nothing, HMRC should still refund you after the end of the tax year, but you wait much longer.

How much emergency tax will I pay on a pension withdrawal?

On the 2026/27 emergency month 1 basis, roughly the first £1,048 of the taxable part is tax free, the next £3,142 is taxed at 20%, the next £6,242 at 40%, and anything above about £10,430 at 45%. On an £18,000 taxable withdrawal that is around £6,530 deducted, even though a basic-rate taxpayer with no other income might owe only about £1,086.

Is the 25% tax-free lump sum affected by emergency tax?

No. The tax-free 25% is paid without any tax deducted. Emergency tax only hits the taxable 75%, or taxable income you take through drawdown after the lump sum.

Pensions & Tax

Emergency Tax on Pension Withdrawals

Q: Why was my pension withdrawal taxed so much?

If your provider had no up-to-date tax code for you, HMRC rules make them use the emergency code on a month 1 basis. That gives you only one twelfth of your £12,570 personal allowance and squeezes the whole withdrawal into one month's tax bands, so large chunks get taxed at 40% and 45% even if you are a basic-rate taxpayer.

By Sam Parkinson · Last updated: July 2026 · 6 min read

Take money out of a pension for the first time and there's a good chance far too much tax comes off it. Between January and March 2026 alone, HMRC handed back £44.1 million of overpaid pension tax across 13,942 claims, an average refund of about £3,164 (HMRC pension flexibility statistics). This guide explains why it happens, how big the overcharge can be, and exactly how to get your money back.

Why your first withdrawal gets overtaxed

When a pension provider pays you taxable income for the first time, it usually has no up-to-date tax code for you. HMRC's rules then make it use the emergency code, 1257L, on what's called a month 1 basis. That treats your withdrawal as if you'll take the same amount every month for the rest of the tax year.

So instead of your full £12,570 personal allowance, you get one twelfth of it. Instead of the full £37,700 basic-rate band, you get one twelfth of that too. A one-off withdrawal of a few thousand pounds gets squeezed into a single month's worth of tax bands, and big slices of it land in the 40% and 45% brackets even if you've never paid higher-rate tax in your life.

Slice of the taxable amount (month 1 basis, 2026/27)	Tax rate
First £1,048 or so	0%
Next £3,142	20%
Next £6,242	40%
Anything above about £10,430	45%

Maria, 60, takes £24,000 from her pot as a one-off. The first £6,000 (25%) is tax free. The taxable £18,000 gets emergency taxed: nothing on the first £1,048, 20% on the next £3,142, 40% on the next £6,242, and 45% on the remaining £7,568. Total deducted: about £6,530.

If Maria has no other income this year, her real bill on £18,000 is about £1,086 (20% of what's left after her full £12,570 allowance). She has overpaid by around £5,400, and it sits with HMRC until she claims it or the tax year is reconciled.

The 25% tax-free part is safe

Emergency tax never touches your tax-free lump sum. The 25% is paid with no deduction. It's only the taxable 75%, or drawdown income you take afterwards, that gets caught.

Hasn't HMRC fixed this?

Partly. From April 2025 HMRC started moving people who are new to pension income onto a proper cumulative tax code automatically and much faster, which cuts down the overcharging on ongoing withdrawals. But a first one-off withdrawal can still be taxed on the emergency basis before any code arrives, which is why refunds were still running at £44 million a quarter in early 2026. Don't assume it will sort itself out on day one.

How to claim it back

You have two options. Do nothing and HMRC should reconcile your tax after the end of the tax year and refund you (usually through a P800 calculation), which can mean waiting a year or more. Or fill in one form and get the money back much sooner. HMRC aims to repay claims within 30 days.

Which form depends on what you did:

Your situation	Form
Took some money out, left the rest in the pot	P55
Emptied the whole pot, and have other income (wages, State Pension, etc.)	P53Z
Emptied the whole pot, and have no other income	P50Z

All three are on GOV.UK and can be filled in online through your Personal Tax Account, or printed and posted. You'll need your National Insurance number and details of the withdrawal, which are on the payslip or statement your provider sends with the payment.

The small first withdrawal trick

If you're planning a large first withdrawal, there's a well-worn way to soften the blow: take a small taxable amount first, say £100. That first payment gets emergency taxed, but it prompts HMRC to issue your provider a proper tax code. Once the code is in place, your real withdrawal is taxed correctly from the start. Providers can't promise timing, so leave a few weeks between the two payments.

Planning your withdrawals?

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Two things to check before you withdraw

Taking taxable income can shrink your future allowance. Flexibly accessing taxable money (not just the 25% lump sum) usually triggers the £10,000 Money Purchase Annual Allowance, which caps what you can pay into pensions afterwards and blocks carry forward for pot contributions.
A big withdrawal can push you into a higher band for real. Emergency tax is a timing problem that gets refunded, but genuinely taking a large taxable sum in one tax year can mean genuinely owing 40% on part of it. Spreading withdrawals across tax years often costs less. Our annuity vs drawdown guide covers the options.

Common questions

Why was my pension withdrawal taxed so much?

Your provider had no tax code for you, so HMRC rules made it use the emergency code on a month 1 basis. You got one twelfth of your personal allowance and one twelfth of each tax band, so much of the withdrawal was taxed at 40% and 45% even if you're a basic-rate taxpayer.

How do I claim the tax back?

Use P55 if you took some money and left the rest, P53Z if you emptied the pot and have other income, or P50Z if you emptied the pot with no other income. All on GOV.UK, online or by post. HMRC aims to repay within 30 days. Do nothing and you should still be refunded after the tax year ends, just much later.

How much emergency tax will I pay?

On the 2026/27 month 1 basis, roughly the first £1,048 of the taxable part is tax free, the next £3,142 is taxed at 20%, the next £6,242 at 40%, and the rest at 45%. On £18,000 taxable that's around £6,530 deducted.

Is the 25% tax-free lump sum affected?

No. The tax-free 25% is paid without deduction. Only the taxable part of a withdrawal gets emergency taxed.

Sources

Repayment figures January to March 2026 (£44.1m across 13,942 claims): HMRC pension schemes newsletter, flexible payments statistics.
Forms P55, P53Z and P50Z and the 30-day repayment aim: GOV.UK.
Emergency tax code 1257L month 1 basis and 2026/27 bands: HMRC; worked examples cross-checked against Royal London and abrdn adviser technical guides.
Automatic tax code improvement from April 2025: HMRC pension schemes newsletter 166. Figures correct as of July 2026.

Written by Sam Parkinson

Sam founded Pension Sprout to make UK pensions easier to understand. He researches every guide from primary sources like GOV.UK, the House of Commons Library and MoneyHelper, and writes in plain English. He is not a regulated financial adviser, and Pension Sprout gives information, not personal advice.

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This article is for general information only and does not constitute financial advice. Tax treatment depends on your individual circumstances; figures relate to the 2026/27 tax year and are correct as of July 2026. Emergency tax amounts are illustrations, not guarantees. For advice tailored to you, speak to a financial adviser regulated by the Financial Conduct Authority (FCA), or get free guidance from MoneyHelper.