The taxman has pledged to end the scandal of inflated tax charges on pensions.

As many as 470,000 people have lost vital income totalling £1.37 billion, which then had to be reclaimed, because of flaws in the HMRC tax collection system.

The problem centres on the fact that the HMRC has routinely imposed a high emergency tax rate on money taken out of a pension when people first retire.

This rate is not based on an accurate assessment of an indvidual’s income and can see them taxed at 40…