Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
I am so sorry to hear of the position you find yourself in, but other than pursuing the company that undertook this release of the pension for you, to take responsibility for their blatant mismanagement of both the tax legislation and pension release (and I suspect it might be that they probably are no longer trading) then I am afraid there is no more recourse you have on this matter.
But I would contact HMRC and advise them of your financial situation, and ask them if they would consider a payment plan, as the pursuit of tax on this money (which was paid incorrectly) is HMRCs' right to take forward, to charge tax on any amount you have been paid.
I am sorry the advise if not more favourable, or provides any comfortable solution, but I am sure you would rather be given the honest position rather than false hope. However one final thought - did this company offering you this pension release, take on the pension?
Or does the pension still remain with the original pension providers? If the pension remains with the original providers, have they any instructions to "repay" any element of the whole pot to this company who offered you the release scheme? Im just thinking that if your pension remains with the original provider, and is still in tact, and has no request to release the funds to anyone other than you (which would be 25% at age 55 and the reminder as an annual pension for life - or review at the full pension age, as further lump sum/annual pension) then it may well be that your only position is the tax.
But as HMRC are going to charge you tax on the amount - as it should not have been released, and it was a loan on the expectation of what the release company projected WOULD be available for you to repay so not an actual pension release, it would be worth establishing the actual pension position at this stage with whomever holds the pension.