Low Earners Warned Not to Ignore HMRC Letters

HMRC Begins Pension Top-Up Rollout for Low Earners — and Ignoring the Letter Could Mean Missing Out

Thousands of lower-paid workers are set to be contacted by HM Revenue & Customs as a long-awaited pension top-up scheme moves towards payment. The measure is intended to correct an inequality within the workplace pension system that has resulted in some lower earners receiving less favourable treatment simply because of the way their employer’s pension scheme administers tax relief. HMRC will identify those who qualify and contact them directly, with the first payments relating to pension contributions made during the 2024/25 tax year. Letters and notifications are expected to continue into early 2027.

At the centre of the issue is what has become known as the “low earners anomaly”. Workers enrolled in certain net pay pension arrangements can miss out on the equivalent tax-relief benefit received by people on similar wages whose pension schemes operate differently. Around three-quarters of those expected to benefit are women, reflecting the higher proportion of women working in lower-paid and part-time positions. Payments will vary according to individual circumstances and pension contributions, but average annual amounts are expected to be around £50 to £70, with some people potentially receiving more.

There is, however, an important warning for anyone receiving unexpected correspondence from HMRC: do not simply throw the letter away. At a time when fraudulent texts, emails and letters have made the public understandably suspicious of unexpected offers of money, a genuine notification could easily be mistaken for another scam. Eligible workers will need to follow HMRC's instructions to receive their payment, meaning ignoring genuine correspondence could result in money remaining unclaimed. At the same time, people should remain vigilant — HMRC will never ask for passwords or PIN numbers, nor demand a fee or payment before releasing money.

For many households, £50 or £70 a year may not sound life-changing, particularly against the continuing pressure of household bills, but the significance goes beyond a single payment. This is about correcting a system in which some of Britain’s lowest-paid workers could effectively receive less pension support than colleagues earning similar amounts. Anyone contacted should carefully verify that the correspondence is genuinely from HMRC before providing information and then follow the official instructions. For those already counting every pound, money legitimately owed towards their financial future is money they can not afford to unknowingly leave behind.