A quiet correction is underway in the United Kingdom, where roughly one million low-earning workers — most of them women — are owed small but meaningful sums from a pension system that treated them unequally for years. HMRC will begin sending letters explaining that a structural disparity between two pension tax relief arrangements left certain earners short-changed, and that the government now intends to make them whole. The payments, averaging around £70, require no application — only trust, which may prove the harder thing to ask of people long accustomed to being overlooked.
Million owed pension tax relief in genuine HMRC outreach—here's how to verify
The process is going to be incredibly painful
Mark
So a million people are getting letters about money they're owed. Why hasn't this been sorted before now?
Mimi
It's a structural problem with how the pension system works. Two different schemes deliver tax relief differently, and low earners in one scheme got less. The government is only now fixing it.
Luke
But how long has this disparity existed? The source doesn't say when it started or why it took this long to notice.
Mimi
Fair point. We know it's being corrected now for the 2024-25 tax year, but the history isn't clear.
Mark
And the £70 figure—is that really typical, or could it be much higher or lower?
Mimi
It varies considerably depending on circumstances. £70 is what most people will see, but the source makes clear it could be quite different.
Luke
The real problem Webb is flagging is that people won't believe it's real and won't claim it. Has HMRC done this kind of outreach before? Do we know if their campaigns actually work?
Mimi
The source doesn't give us that track record. We know they're planning social media and other channels, but whether that will reach a million low earners—many of whom may be digitally excluded—is an open question.
Mark
What happens if someone doesn't respond? Does the money just sit there?
Mimi
The source doesn't say. That's a gap.
Luke
Exactly. We know payments are coming, but we don't know what happens to unclaimed money, or how long people have to claim it.
El Pulso
- A long-standing inequity in how pension tax relief was delivered has quietly shortchanged around one million low earners, most of them women, for years.
- HMRC is now sending letters to those affected, but the government itself anticipates that many recipients will mistake a genuine payment notice for a scam — a fear rooted in the very real prevalence of fraud impersonating official bodies.
- The authority has drawn a firm line: any contact arriving by text, email, or phone call is fraudulent — only postal letters and personal tax account notifications are legitimate.
- Pensions experts are sounding the alarm that the government's own cost projections quietly assume a large portion of eligible people will never claim, suggesting the awareness campaign may be insufficient to reach the most vulnerable.
- The money exists and no application is required, yet the real obstacle is whether a million people who have rarely been prioritised by the system will believe, this time, that it is reaching out in good faith.
A quiet correction is underway in the United Kingdom, where roughly one million low-earning workers — most of them women — are owed small but meaningful sums from a pension system that treated them unequally for years. HMRC will begin sending letters explaining that a structural disparity between two pension tax relief arrangements left certain earners short-changed, and that the government now intends to make them whole. The payments, averaging around £70, require no application — only trust, which may prove the harder thing to ask of people long accustomed to being overlooked.
About one million people in the UK — predominantly women — are set to receive letters from HMRC informing them they are owed money. The payments are genuine, though the government is quietly preparing for many recipients to assume otherwise.
The source of the debt lies in a structural quirk of pension taxation. The UK operates two different mechanisms for delivering pension tax relief: Net Pay Arrangements and Relief at Source. For low earners whose income falls below the £12,570 annual tax threshold, Net Pay Arrangements have consistently delivered less relief than the alternative. The government has decided to correct this imbalance, with top-up payments averaging around £70 per person, varying by individual circumstance.
HMRC will begin distributing letters over the coming months, initially covering the 2024–25 tax year, with automatic adjustments planned for future years. No one needs to apply — eligible individuals will be contacted by post or through their online personal tax account and asked simply to provide bank details. Those without digital access can call HMRC directly.
The authority has been explicit about how to distinguish a real letter from a fraudulent one: any contact arriving by text, email, or phone is a scam. HMRC will never request PIN codes, passwords, or money transfers. Recipients can verify authenticity by checking their registered address and searching Gov.uk for the scheme by name.
Despite these safeguards, experts remain concerned. Former pensions minister Sir Steve Webb has expressed alarm that the government's own financial projections assume a significant portion of eligible people will never claim — a tacit admission that non-take-up is expected to be high. He warned the outreach process would be difficult and that the risk of people simply not believing or not responding to the letter is very real. The money is there. The harder question is whether the people it belongs to will feel confident enough to reach out and take it.
About one million people—predominantly women—are about to receive letters from HMRC explaining that they are owed money. The payments are real. They are not a scam, though the government is bracing for many recipients to treat them as one.
The money stems from a quirk in how pensions are taxed. When you contribute to a pension, the government allows some of what would have gone to tax to flow into your retirement savings instead. This is tax relief, and it's meant to encourage saving. But the system has two different ways of delivering it, and they do not deliver equally. Some employers use what's called a Net Pay Arrangement, while others use Relief at Source. For low earners—those making close to but not exceeding £12,570 a year, the threshold where income tax kicks in—the Net Pay Arrangement has consistently delivered less tax relief than the other method. The government has decided to correct this imbalance by sending top-up payments to those who fell through the gap. The typical payment will be around £70, though the amount varies depending on individual circumstances.
HMRC will begin mailing these letters over the coming months. The payments will initially cover the 2024-25 tax year, with automatic adjustments for subsequent years. No one needs to apply. If you are eligible, contact will come to you—either by letter or through your online personal tax account. The process is designed to be straightforward: eligible people will be asked to provide their bank details through their tax account, or they can phone HMRC directly if they lack digital access.
But HMRC is also preparing for skepticism. The tax authority has published clear guidance on how to verify that a letter is genuine. If you receive a text, email, or phone call about this payment, it is a scam—HMRC will not contact you through those channels. The authority will never ask for PIN codes, passwords, or money transfers. You can verify a letter's authenticity by checking that HMRC has your current address and by searching Gov.uk for "Low Earner's Pension Payment." HMRC plans to run an awareness campaign across social media and other platforms to reach people and explain what to expect.
Yet experts worry the campaign may not be enough. Sir Steve Webb, a former pensions minister now at the LCP pensions consultancy, has expressed shock at how conservatively the government has estimated take-up. The government's cost projections assume that far fewer eligible people will actually claim their payments than the full million who are entitled. Webb warned that the process of reaching the right people "is going to be incredibly painful" and that there is "a real risk of huge non take-up." He emphasized that effective communication is vital if people are to receive what they are owed. The concern is not that the money won't be available—it will be—but that many of those entitled simply will not believe the letter is real, or will not know how to respond to it, and will let the payment slip away.
Citas Notables
The process of getting these payments to the right people is going to be incredibly painful and there is a real risk of huge non take-up.— Sir Steve Webb, former pensions minister and partner at LCP pensions consultancy
Customers can check a letter is genuine on Gov.uk and should only respond via official HMRC channels.— HMRC spokesman
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