The £70 refund letter that isn't a scam

You may be among the one million people, mostly women, who will receive letters explaining how you are eligible for top-up payments - and it's not a scam.

Those entitled are low earners who have missed out on the money because of the way the pension they pay into is administered.

HM Revenue and Customs (HMRC) will write to people over the next few months, explaining how to receive the payment. Typically they will be due £70, but that may vary considerably depending on their circumstances.

Anyone eligible - the vast majority of whom will be of working age rather than pensioners - will be contacted automatically. But, if you receive a letter, there are various checks you can do to ensure the letter is genuine so you don't get hoodwinked.

When you pay into a pension, the government allows some of the money that would otherwise have been paid in tax to go towards your pension instead. This is known as tax relief.

For relatively complicated reasons, some low earners whose employer used what's known as a Net Pay Arrangement pension scheme received less than those whose pension was administered through a Relief at Source scheme.

Employees have no control over the type of scheme that's used, so the government has decided to make up the difference to those who have missed out, through what's called a low earner's pension payment.

Typically, to qualify, they would have earned close to, but not more than, £12,570 a year (the starting point for paying income tax).

The single payment initially relates to the 2024-25 tax year, but automated annual payments for those in the same situation in later years could be paid subsequently.

Customers don't need to apply. If eligible, you'll be sent information by HMRC - the UK's tax authority - in a letter or through your online personal tax account.

HMRC will not text, email or call you about it. If you receive such a call or message, it is a scam. Also, it will never ask you to transfer money, or ask for PIN codes or passwords.

Other ways to check contact is smooth and genuine include:

• Making sure HMRC has your latest address
• Searching Gov.uk for "check if a letter you've received from HMRC is genuine", and look for "Low Earner's Pension Payment"
• HMRC also has advice on spotting a scam
• Customers will be asked to provide their bank details through their personal tax account. Customers who are digitally excluded will be able to phone HMRC to accept their payment instead

"We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine," said a HMRC spokesman.

"Customers can check a letter is genuine on Gov.uk and should only respond via official HMRC channels."

If you are eligible, you will need to respond to the HMRC letter through official HMRC channels to receive the payment, taking care not to be caught out by copycat scams.

Sir Steve Webb, partner at pensions consultancy LCP and a former pensions minister, said he was shocked at how few people the government expected to actually receive the payment.

The government has estimated the cost of the project to be much lower than if everyone who was eligible took up the payment.

"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," he said.

"It is vital that communications are effective to make sure that people get the money to which they are entitled."

HMRC says it will run an awareness campaign using social media and other channels.

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