Older people are a growing group for HM Revenue & Customs and significant numbers pay too much or too little tax, according to a report by the National Audit Office. Errors occur because many people's tax affairs become more complicated when they reach pension age and HMRC's systems do not cope well with their multiple sources of income, it says. The NAO estimates that, by March 2009, as result of discrepancies between HMRC's records and tax deducted by employers and pension providers, some 1.5m older people had overpaid tax by an average of £171 (£250m in total) and around 500,000 older people had underpaid tax by an average of £207 (£100m in total). The NAO says these errors can have a disproportionate effect on older people as their net average annual income of £16,000 was around 25% below the national average in 2006-07. HMRC expects a new computer system introduced in June 2009 will reduce the level of errors. Older people may also be paying more tax because they do not claim additional age-related tax allowances, accounting for 3.2m people. Around 80% of older people dealing with HMRC were satisfied with the service, though they are less likely to contact the department than other people. Amyas Morse, head of the NAO, said: 'By providing a more coherent service, HMRC could make substantial savings as the number of enquiries from older people about their tax affairs would reduce. A win-win situation for all.' A spokesman for HMRC said: 'We will shortly launch a publicity campaign designed to encourage older taxpayers to reclaim tax and have their investment income paid tax-free. 'We will also look at ways of encouraging better take-up of age-related tax allowances.'