The £70 refund letter that isn't a scam

The £70 refund letter that isn't a scam Up to one million people, the majority of whom are women, are set to receive letters explaining that they qualify for a top‑up payment and that the correspondence is legitimate. The individuals concerned are lower‑paid workers who lost out because of the way the pension scheme they contribute to is administered. HM Revenue and Customs (HMRC) will write to eligible recipients over the coming months, detailing how to claim the money. The standard amount is £70, although the exact figure may vary widely depending on personal circumstances. The vast majority of those who qualify are of working age rather than retirees, and they will be contacted automatically. Anyone who does receive a letter can carry out a series of checks to confirm its authenticity and avoid being deceived. When a person pays into a pension, the government permits a portion of the tax that would otherwise be due to be redirected into the pension fund—a mechanism known as tax relief. Due to complex administrative differences, some lower earners whose employers used a Net Pay Arrangement pension scheme received less than those whose pensions were managed through a Relief at Source arrangement. Since employees have no influence over which system is applied, the government has decided to compensate the shortfall through what is termed a lower earner's pension payment. To be eligible, a person generally must have earned close to, but not exceeding, £12,570 per year—the threshold at which income tax begins to apply. The initial payment relates to the 2024‑25 tax year, with the possibility of automatic annual payments in subsequent years for those remaining in the same situation. Verification steps are straightforward. Recipients do not need to apply; if eligible they will receive information from HMRC—either in a letter or through their online personal tax account. HMRC will never make contact by text, email or telephone regarding this payment. Any such message is a scam, and the department will never request a money transfer, PIN or password. Additional safeguards include confirming that HMRC holds the current address, searching Gov.uk for the phrase “check if a letter you've received from HMRC is genuine” and looking for “Low Earner's Pension Payment,” consulting HMRC’s guidance on spotting scams, and, for those without digital access, calling HMRC to verify the payment after supplying bank details through the personal tax account. A HMRC spokesman stated, "We know immoderate radical whitethorn beryllium cautious astir unexpected contact, which is wherefore we supply wide accusation astir what to expect and however to verify the interaction is genuine," said a HMRC spokesman. He added, "Customers tin cheque a missive is genuine connected Gov.uk and should lone respond via authoritative HMRC channels." Those who qualify must reply to the HMRC letter through official channels to obtain the payment, taking care to avoid copycat scams. Sir Steve Webb, partner at pensions consultancy LCP and a former pensions minister, remarked, "The process of getting these payments to the close radical is going to beryllium incredibly achy and determination is simply a existent hazard of immense non take-up," helium said. He continued, "It is captious that communications are effectual to marque definite that radical get the wealth to which they are entitled." The government has estimated that the scheme’s cost will be far lower than if every eligible individual claimed the payment. HMRC intends to run an awareness initiative using social media and other outlets to improve outreach.