HM Revenue and Customs (HMRC) has begun contacting approximately 1.2 million low earners across the UK to issue a pension tax relief top-up. The communication, which started arriving in August 2026, concerns a tax refund averaging £70 for the 2024/25 tax year.
The payments are designed to address a long-standing administrative discrepancy known as the “net pay anomaly.” This issue specifically affected workers earning between £10,000 and £12,570 who contributed to “Net Pay” pension schemes. Because these individuals earn less than the standard Personal Allowance, they do not pay income tax and previously did not receive the 20% tax relief automatically granted to those in “Relief at Source” schemes.
According to analysis from AJ Bell, the average refund amount for the current cycle is estimated at £70. Data indicates that the majority of those affected—approximately 75%—are women, many of whom are part-time workers with multiple small pension pots.
Timeline and How to Claim
The rollout of these letters is phased, with the initial batch sent in August and September 2026. HMRC expects the campaign to continue into early 2027. Eligible individuals do not need to take any action or apply for the payment until they receive a formal letter or a notification via their Personal Tax Account.
Once a notification is received, the refund can be claimed through the Government Gateway or the HMRC app. Following a successful claim, bank transfers are expected to be processed throughout late 2026 and the first quarter of 2027. HMRC has confirmed that these top-up payments will not affect other state benefit entitlements or National Insurance contributions.
Identifying Legitimate HMRC Correspondence
Because the letters involve a cash refund, financial experts have warned that the correspondence may be viewed with suspicion or mistaken for a phishing attempt. To distinguish the legitimate HMRC campaign from potential scams, recipients should note the following:
- HMRC will never ask for a PIN, password, or credit card details via text or email.
- Legitimate letters will direct users to the official GOV.UK website or the HMRC app to provide bank details securely.
- The refund is specifically for the 2024/25 tax year and relates to pension contributions made under “Net Pay” arrangements.
If a worker believes they are eligible based on their earnings and pension type but does not receive a letter by early 2027, they can check their status through their online Personal Tax Account. However, HMRC has requested that individuals wait for the phased mailing process to conclude before initiating contact regarding the top-up.
