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More than two million older people have paid more tax on their savings income than they need to, the Public Accounts Committee found.

HM Revenue and Customs does not know how many people miss out on age-related allowances they are entitled to.

The tax authority said it was considering the report in detail.

Complexity

Older people - who make up 18% of UK taxpayers - were more likely to pay their tax, but less likely to understand the system, the report found.

Their tax affairs become more complicated at pension age, but HMRC's systems did "not cope well" with these people's multiple sources of income, it added.

Discrepancies between the HMRC's records and those of employers and pension providers mean that 1.5 million older people overpaid £250m in tax - but these people were less likely to contact the tax authority for help than younger taxpayers.

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