Being able to flexibly access your pension savings can be an incredibly valuable benefit in these challenging times. But making ad-hoc pension withdrawals will typically result in an overpayment of tax which needs to be reclaimed from HMRC.

This video explains how the emergency tax month 1 rule works and how it’s applied to ad-hoc pension withdrawals.

The Money Purchase Annual Allowance (MPAA) explained: The Pension Annual Allowance explained:

You may enjoy other videos in the pensions playlist –

📗 Buy my new book: The Retirement Café Handbook – Nine Accelerators for a Successful Retirement:

Thanks for checking out my YouTube channel – I’m Justin King and my aim is to help people to live successful lives. That often involves understanding your money.

If you enjoy this video, please press the like button to help more people like you find my channel.

If you’re planning your retirement and want to make the best use of your wealth to provide for your family throughout retirement and beyond, or work out how best to pay for a loved one’s care, I may be able to help you.

As a Chartered Financial Planner at boutique retirement planning practice, MFP Wealth Management, I help successful people retire with complete confidence. To explore whether I could help you, get in touch at

Get my weekly newsletter:
Check out my podcast:

Connect with me:
On Twitter:
On LinkedIn:

This video is for information and entertainment only. Nothing on this channel constitutes financial advice. Please do not make any decisions based on the contents of my videos; seek professional independent financial advice first!…(read more)

LEARN MORE ABOUT: Retirement Pension Plans

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

The ability to make flexible withdrawals from your pension is a valuable option for many individuals as they approach retirement. Being able to access your funds as and when you need them can provide a sense of financial security and peace of mind. However, early flexible pension withdrawals can sometimes come with an unexpected tax headache known as emergency tax.

Emergency tax is a flat rate tax that is applied to any withdrawals made from a pension before the provider has all the information needed to calculate the correct tax rate. This means that individuals who make an early withdrawal may end up paying more tax than they actually owe, as emergency tax rates are often higher than the individual’s actual tax rate.

The issue of emergency tax can cause frustration and confusion for pension holders who may not fully understand why they are being charged a higher tax rate. It can also result in a lower than expected payout, as a significant portion of the withdrawal may be taken up by emergency tax.

To avoid the headache of emergency tax, there are a few steps that individuals can take when making early flexible pension withdrawals. One option is to inform your pension provider of your tax code, which will enable them to apply the correct tax rate to your withdrawal. Providing this information in advance can help to ensure that you are not charged emergency tax.

Another option is to reclaim any overpaid tax by submitting a tax return to HM Revenue & Customs. This process can be time-consuming and may require the assistance of a tax professional, but it can help to recover any tax that was incorrectly deducted.

It is important for individuals to be aware of the potential for emergency tax when making early pension withdrawals, and to take steps to minimize the impact of this tax headache. By staying informed and proactive, individuals can ensure that they are not paying more tax than necessary when accessing their pension funds.