One million Brits urged not to ignore HMRC letter landing through doors offering free cash
HMRC has urged around a million people in the UK to keep an eye out for a letter that will be arriving in the coming weeks.
The letter will inform them that they are entitled to claim money from the government for a specific reason.
This is part of a campaign from His Majesty's Revenue and Customs (HMRC) around pension tax relief.
More specifically, it is letting people know how they could be entitled to a top-up because the administration of their workplace pension scheme, Money Week reports.
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However there are specific criteria around who is and isn't entitled to claim the top-up from HMRC.
This is workers who had their occupational pension scheme put out tax relief via a net pay arrangement, or NPA.
If this is you then you may be able to claim the top up from HMRC.
But what exactly is an NPA? This is when your pension contributions are taken out of your monthly salary before calculating the tax, so you are effectively not taxed on your pension contributions.
Of course, many people may understandably be suspicious of a letter arriving in the post informing them that they are entitled to claim money, as such language is a common modus operandi of scammers and criminals.
As a result, HMRC is trying to put the word out to inform people of the letters in advance in an effort to avoid people who are genuinely entitled to the top-up throwing out the letter because they assume it's a scam.
"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 spokesperson for HMRC.
“Customers can check a letter is genuine on gov.uk and should only respond via official HMRC channels. We’ll never ask for passwords, PINs or money to be transferred to claim a payment.”
It is expected that the letters will start to go out gradually into the early parts of 2027.
Steve Webb is a former pensions minister who is now a partner at pension consultants LCP, and 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.
“Most people will not have a clue about this issue and may be suspicious of a letter out of the blue from HMRC offering them free money.”
Usually, when you are earning around £10,000 or more a year you are enrolled automatically into the scheme for the workplace pension. However when the NPA method is used people who are earning between £10,000 and the minimum tax threshold of £12,570 are not eligible for pension tax relief.
The government is now trying to compensate lower earners signed up to NPA workplace schemes from 2024/2025, with the top-ups being worth around £70 and paid by bank transfer to people who are eligible.
It is estimated that approximately one million people have been affected in the UK.
Kit Roberts