Steve as your more likely to get an answer than me, ask HMRC what will happen when somebody takes a large one off withdrawal from their pension and that is their only income for the year.

I think you’ll find it will be overtaxed and claim required.

Nope AIUI a large single withdrawal will still be overtaxed even with correct tax code, unless took in Month 12. The system just cannot deal with large one off withdrawals at moment correct tax code or not. Need a way of informing HMRC at the time that this is a one of withdrawal.

This isn't the victory you think it is, most of the overpayments to HMRC are due to one off large withdrawals, which this change doesn't help.

It helps the regular withdrawals, but only by getting them on the correct tax code quicker. which would have happened anyway within a month or so ?