Committee chairman, Tory MP Edward Leigh, said: ‘The truth is that millions of older people are paying too much tax. ‘Many older people are getting a raw deal from their dealings with HM Revenue and Customs.’

The HMRC’s ‘complex’ systems confused many pensioners, he said.

The report estimates 1.5million pensioners have overpaid £250million because of discrepancies between the department’s records and those of the pensioners’ employer or pension provider. A further 2.4million have overpaid around £200million in tax on their savings.

Mr Leigh added: ‘Pensioners are more likely to comply with their tax obligations than other taxpayers but are less likely to understand them. Many pay more tax than they need to.’

Many of the problems surround multiple tax coding notices which are sent to the five million taxpayers over state pension age.

Pensioners’ tax affairs are more complicated because many have several different sources of income, such as the State pension, company pension, savings and a salary.

Many pensioners do not have internet access, or simply prefer to talk to people directly rather than use a website.

Robin Williamson, of the Low Incomes Tax Reform Group, said: ‘The report tells a sorry tale of older people being ill served by HMRC.

‘It is simply unacceptable older people should continue to pay the wrong amount of tax – often overpaying amounts they can ill afford to lose – because of HMRC’s reluctance to simplify their needlessly complex administrative systems.’