The scandal began when pension freedoms were introduced in 2015, allowing people to withdraw money from their retirement savings from the age of 55 onwards. Any withdrawals are added to your total earnings for that year, and will be subject to income tax if above the £12,570 personal allowance.

As a general rule, HMRC only makes people pay tax if they actually owe it. But that’s not the case with pension withdrawals.

Since 2015, pensioners have been forced to pay a staggering £1.3 billion in…