Thousands to receive HMRC refund letter - and it's not a scam

The payments from from HM Revenue and Customs (HMRC) are aimed at low earners who lost out due to the type of workplace pension scheme used by their employer. Around 990,000 women across the UK are expected to benefit from the scheme, which compensates those affected by a technical issue involving net pay arrangement schemes. HMRC will write to people over the next few months, explaining how to receive the payment. What is in the letter? When you contribute to a pension, the government gives tax relief, meaning some money that would otherwise go to tax is added to your pension pot instead. For technical reasons, some low-paid workers in workplace pensions using a net pay arrangement received less tax relief than people in schemes using relief at source. Employees cannot choose which type of pension arrangement their employer uses. To address the difference, the government introduced a low earners' pension payment to compensate eligible people who missed out. Those receiving the letter do not need to apply for the low earner's pension payment; they will receive a letter to their home or via an online account. Most people affected typically earned close to, but not more than, £12,570 a year and missed out on tax relief because of the way their employer's pension scheme was set up. While the average payment is expected to be around £70, the actual amount will vary depending on individual circumstances. How to check it isn't a scam Eligible individuals will be contacted directly by HMRC, either by letter or through their online personal tax account. HMRC will not contact people about this payment by text, email, or phone and any such messages should be treated as scams. Steve Webb, partner at pensions consultancy LCP and a former pensions minister, said: "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. "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.