HMRC to Issue £70 “Low-Earner” Pension Refunds to Over a Million Britons

Her Majesty’s Revenue and Customs (HMRC) will send letters to an estimated 1.32 million people informing them of a one-off pension payment of about £70. The payment corrects an earlier shortfall in tax relief for workers whose pensions were administered through a Net Pay Arrangement, where contributions were taken from gross earnings before tax. The scheme applies to the 2024-25 tax year and letters are expected to continue arriving until early next year.

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Under a Net Pay Arrangement, pension contributions reduce taxable earnings before income-tax and National-Insurance are calculated, resulting in less relief than the Relief-at-Source method, which deducts contributions after tax. The government announced earlier this year that it would compensate workers who earned close to, but not above, the £12,570 income-tax threshold and therefore missed out on full relief.

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HMRC estimates that women will comprise roughly 75 % of those eligible—about 990 000 of the total 1.32 million. The refund amount may vary slightly around the £70 figure. Recipients do not need to apply; eligibility will be confirmed through the mailed notice or a digital notification in an online HMRC account.

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He expressed concern that many may ignore the letters, assuming they are scams.

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HMRC has issued detailed guidance to help the public verify the authenticity of the correspondence. The agency stresses that it will never contact individuals by text, email, or phone, nor request passwords, PINs, or money transfers.

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• “We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.” — HMRC spokesperson — HMRC spokesperson

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