Pensions
HMRC is posting a million pension top-up letters that look like scams
From August 2026 HMRC is writing to around a million low earners about missed pension tax relief, and higher-rate savers get no letter at all.
1 million HMRC letters about missed pension tax relief
A letter that looks like a scam
HM Revenue and Customs began writing to around a million low earners in August 2026 to offer them money they are owed, in letters that ask them to hand over bank details through an online service — on its face, hard to tell from a phishing attempt. Roughly three in four of those affected are women.
Steve Webb, a partner at the consultants LCP and a former pensions minister, said on 27 August 2026 that people “may be suspicious of a letter out of the blue from HMRC offering them free money” and that “some may suspect it is a scam”. He warned of “a real risk of huge non-take-up”. LCP puts the average payment at about £53 — a figure drawn from a 2021 government consultation, not from HMRC. The rollout runs gradually into early 2027.
Why the money is owed
Workplace pensions give tax relief in one of two ways, and your employer’s scheme decides which — not you.
| How it works | Who has to act | |
|---|---|---|
| Net pay arrangement | The contribution comes out of gross pay before income tax is worked out | Nobody. Relief is automatic, at your own tax rate |
| Relief at source | The contribution comes out after tax; the provider claims 20% back and adds it | Anyone paying 40% or 45% must claim the rest |
Net pay is usually the better deal — unless you earn too little to pay tax at all. Then cutting your taxable pay saves you nothing, so you get no relief, while someone on the same wage in a relief-at-source scheme still gets 20% added. The government estimated 1.32 million people would be eligible from April 2024. The fix covers contributions from the 2024/25 tax year, with payments made from 2025/26.
NHS staff are on both sides of this
The NHS Pension Scheme is a net pay arrangement, so most members get relief automatically at their own rate through payroll. That is also why low-paid NHS staff are among the people HMRC is writing to: if your total taxable income sits below the personal allowance, net pay gives you nothing. The scheme’s lowest contribution tier is deliberately subsidised — the Department of Health and Social Care says it “was designed to provide a rate that was further subsidised to mirror the benefit of tax relief” — but that is a discount on what you pay in, not the relief itself.
The group nobody is writing to
Now turn it round. If you pay tax at 40% and your scheme uses relief at source, the provider adds 20% and stops there. The other 20% is yours to claim, and no letter is coming.
Pay £1,000 into a relief-at-source pension and the provider turns it into £1,250; a 40% taxpayer can claim a further £250 from HMRC, and a 45% taxpayer £312.50. Scottish rates differ: 22% on income taxed at 42%, and 28% on income taxed at 48%.
A claim must reach HMRC within four years of the end of the tax year it relates to, so 2022/23 closes on 5 April 2027.
How to tell which one you are in
Read the payslip. If the pension deduction has already been taken off the figure your tax is calculated on, it is net pay and there is nothing to claim. If tax is worked out on full gross pay and the pension comes off afterwards, it is relief at source — and if you are a higher-rate taxpayer, money is sitting with HMRC.
What NHS contributions cost each month depends on your tier, set out at /nhs/pension-contributions.
Our workings are at /methodology and the documents behind them at /sources.
Where these figures come from
- Tax on your private pension contributions: tax relief — GOV.UK
- Pensions relief relating to net pay arrangements — GOV.UK (HM Revenue and Customs)
- 1 million low earners set to get letters from HMRC inviting claims for 'low earner's pension payment', but risk of 'huge' non-take-up — LCP
- Millions of workers potentially owed thousands by HMRC - but only if they ask — Grimsby Telegraph
- How tax relief is given on pension contributions — Low Incomes Tax Reform Group
- Tax implications of increasing your pension — NHS Business Services Authority
Every figure traces to a dated document — the line this section is named after. If one here is wrong, tell us and it gets fixed publicly. Work out your own figures.