The £70 refund letter that isn't a scam — You may be among the one million people, mostly women, who will receive letters explaining how you are eligible for top-up payments – and it's not a scam.
Those entitled are low earners who have missed out on the money because of the way the pension they pay into is administered.
HM Revenue and Customs (HMRC) will write to people over the next few months, explaining how to receive the payment. Typically they will be due £70, but that may vary considerably depending on their circumstances.
Anyone eligible – the vast majority of whom will be of working age rather than pensioners – will be contacted automatically. But, if you receive a letter, there are various checks you can do to ensure the letter is genuine so you don't get hoodwinked.
When you pay into a pension, the government allows some of the money that would otherwise have been paid in tax to go towards your pension instead. This is known as tax relief, external.
For relatively complicated reasons, some low earners whose employer used what's known as a Net Pay Arrangement pension scheme received less than those whose pension was administered through a Relief at Source scheme.
Employees have no control over the type of scheme that's used, so the government has decided to make up the difference to those who have missed out, through what's called a low earner's pension payment.
Typically, to qualify, they would have earned close to, but not more than, £12,570 a year (the starting point for paying income tax).
The single payment initially relates to the 2024-25 tax year, but automated annual payments for those in the same situation in later years could be paid subsequently.
Customers don't need to apply. If eligible, you'll be sent information by HMRC – the UK's tax authority – in a letter or through your online personal tax account, external.
HMRC will not text, email or call you about it. If you receive such a call or message, it is a scam. Also, it will never ask you to transfer money, or ask for PIN codes or passwords.
Other ways to check contact is smooth and genuine include:
Searching Gov.uk for "check if a letter you've received from HMRC is genuine", and look for "Low Earner's Pension Payment"
HMRC also has advice on spotting a scam, external
Customers will be asked to provide their bank details through their personal tax account. Customers who are digitally excluded will be able to phone HMRC to accept their payment instead