LITRG publishes information on HMRC’s new pension payment for low earners.
The CIOT’s Low Incomes Tax Reform Group (LITRG) has published new information to support those impacted by the government’s new Low Earner’s Pension Payment (LEPP).
The payment has been designed to compensate around 1 million workers who did not receive full income tax relief on the payments they made into their workplace pension schemes from 2024/25 onwards.
LITRG welcomes the roll-out of the initiative, which addresses a long-standing anomaly in the pension system that it, and others, have been at the forefront of campaigning for.1
HMRC will begin writing to eligible people from this Autumn by post or via their online Personal Tax Account with instructions on how to receive the payment.
To be eligible for the payment, workers will need to have had total income below or around the level of the tax-free personal allowance and have contributed to a ‘net pay’ pension scheme.2
LITRG’s news article can be found here: https://www.litrg.org.uk/news/low-earners-pension-payment-hmrc-begin-contacting-eligible-people-autumn .
The article explains what the payment is, why it is being made, who is eligible to receive the payment, and how HMRC will contact people to invite them to accept the payment.
LITRG is also urging people to be alert to the risk of scammers trying to impersonate HMRC. The guidance outlines how to check whether communication is genuine and reiterates that HMRC will never ask someone to transfer money or provide a PIN or password to receive a payment.
The LITRG team is available to speak with interested journalists to provide further background on the Low Earner’s Pension Payment and how it will operate3.
Sarah Weston, Technical Officer at LITRG, said:
“LITRG has been campaigning for a solution to this issue affecting low-income pension savers for many, many years and so it is encouraging that work will soon be underway to contact the nearly 1 million people who may benefit from a top-up payment.
“Our guidance is focused on helping people understand what the Low Earner’s Pension Payment is and what the process for claiming the payment will be once HMRC get in touch.
“We also want those who are entitled to a payment to feel confident that the information they receive is genuine, and so we are also pointing out how to stay alert to fraudulent activity.”
Notes for editors
- LITRG is part of the Net Pay Action Group, a collective of policy experts, pensions industry representatives, payroll specialists and others – who have campaigned on this issue since 2018.
- Under a ‘net pay’ pension scheme, pension contributions are taken from pay before income tax is worked out. The anomaly arose because there are some people with low earnings who contributed to a workplace pension scheme and who did not benefit from full tax relief on their pension savings. LITRG has further guidance explaining this: https://www.litrg.org.uk/pensions/paying-pensions/tax-relief-pension-contributions/pension-tax-relief-problems-low-earners.
- Contact information for the LITRG media team can be found here – https://www.litrg.org.uk/about-us/media-centre.
