HM Revenue and Customs (HMRC) is set to write to approximately one million individuals, predominantly women, informing them that they are eligible for automatic pension top-up payments. The tax authority has confirmed the initiative is legitimate and not a scam, targeting low-income earners who previously missed out on full tax relief due to how their workplace pensions were administered.
While the standard payment is typically £70, the exact amount may vary based on individual circumstances. The government identified a disparity where employees in “Net Pay Arrangement” schemes received less tax relief compared to those in “Relief at Source” schemes, despite having no control over which system their employer selected. To rectify this, HMRC will issue payments starting with the 2024-25 tax year, with subsequent years processed automatically.
Eligible individuals do not need to apply. Instead, they will receive notification via post or through their online personal tax account. HMRC has issued strict warnings regarding fraud, stating that officials will never initiate contact via text, email, or phone call regarding these payments. Any such unsolicited digital communication should be treated as a scam. Additionally, legitimate correspondence will never request money transfers, PIN codes, or passwords.
To verify authenticity, recipients are advised to ensure HMRC holds their current address and to search Gov.uk for guidance on identifying genuine HMRC letters. Digital users will be asked to provide bank details through their secure online account, while those who are digitally excluded can accept payments by contacting HMRC directly.
Sir Steve Webb, a former pensions minister and partner at consultancy LCP, expressed concern over the potential for significant non-take-up. He noted that government cost estimates appear low because they may not account for all eligible claimants, describing the distribution process as potentially “incredibly painful.” Webb emphasized the critical need for effective communication campaigns to ensure entitled individuals receive the funds.
In response, HMRC announced it will conduct an awareness campaign utilizing social media and other channels to reach those affected and encourage them to claim their payments.
Why did it take so long to identify and rectify this systemic unfairness?
Important to verify the letter is genuine—HMRC would never ask for bank details by email.
As a low-income worker, this £70 top-up could genuinely make a difference.
Will the awareness campaign actually reach elderly people who rarely use social media?
Finally being recognized for tax relief we were denied through no fault of our own.