The £70 refund letter that isn't a scam

HM Revenue and Customs (HMRC) will soon mail letters to about one million people—predominantly women of working age—informing them that they are owed a pension tax‑relief payment, usually around £70, though the amount can vary. The refunds target low‑earners who earned up to £12,570 in the 2024‑25 tax year and whose pensions were administered under a Net Pay Arrangement, which gave them less relief than the Relief at Source scheme. Because these workers did not pay income tax, the government is compensating them with a direct payment rather than a tax reduction, and the entitlement is automatic; no application is required.

The payment corrects a systemic shortfall that arose from the way some employers handled pension contributions, leaving eligible employees without the tax relief they should have received. HMRC will issue the first lump‑sum for the 2024‑25 year and may continue automatic annual payments for future years. Recipients must verify the authenticity of the letter by checking the Gov.uk “Low Earner’s Pension Payment” page, as HMRC will never contact individuals by phone, email or text, nor will it request passwords or money transfers. Those with digital access will confirm their bank details via their personal tax account, while digitally excluded claimants can call HMRC to arrange payment.

Officials warn that despite the straightforward process, uptake could be low if communications fail, a concern echoed by pensions expert Sir Steve Webb, who described the rollout as potentially “incredibly painful” with a risk of “huge non‑take‑up.” HMRC plans an awareness campaign across social media and other channels to ensure eligible people recognize the genuine correspondence and claim their money, emphasizing that the agency holds only limited data and will never ask for sensitive information beyond bank details needed for the transfer.

⚡ Effects Interpreter