Who may be eligible?
HMRC says a person may qualify if, for a tax year from 2024 to 2025 onwards, they earned close to the Personal Allowance — typically £12,570 — and paid into a workplace pension using a net pay arrangement but did not obtain Income Tax relief on those contributions. HMRC assesses eligibility separately for each tax year.
Why does this payment exist?
Under relief-at-source pension schemes, a pension provider can receive a basic-rate tax top-up even for some people who pay little or no Income Tax. Under a net pay arrangement, contributions are deducted before PAYE, so a worker with income too low to pay Income Tax can receive little or no tax-relief benefit. The Low Earner’s Pension Payment is intended to reduce that difference.
What should you do if you think you qualify?
Wait for HMRC to contact you. HMRC says eligible people should follow the instructions in the letter or Personal Tax Account message to accept the payment. Employers, payroll teams and pension administrators do not need to apply on an employee’s behalf.
When are payments being made?
HMRC's August 2026 pension-schemes update says payments relating to contributions made in the 2024 to 2025 tax year will begin in the coming months. The rollout is phased over the remainder of 2026 and into early 2027.
Could the message be a scam?
Because the scheme involves HMRC contacting people about money they are owed, recipients should verify unexpected correspondence. HMRC says it will never ask for money transfers, PINs or passwords. Use GOV.UK and your Personal Tax Account rather than links or contact details from an unsolicited message if you are unsure.
Sources
HMRC Employer Bulletin — Low Earner’s Pension Payment
HMRC Pension Schemes Newsletter 184 — rollout update, 27 August 2026
HMRC policy background — pensions relief for net pay arrangements
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