From August 2026, HMRC will begin contacting around one million people who may be entitled to a low earner’s pension payment.
The payment is designed to help lower earners who have missed out on pension tax relief because of the way their workplace pension scheme operates.
The LGPS operates a net pay arrangement. This means pension contributions are taken from your pay before income tax is worked out.
What is the low earner’s pension payment?
For most members, this means they automatically receive tax relief on their pension contributions. However, some lower earners do not benefit from this tax relief because their earnings are too low to pay income tax
The low earner’s pension payment has been introduced to address this. It provides a payment to eligible low earners that is equivalent to the tax relief available to members of pension schemes that use a different method of giving pension tax relief.
Could I be eligible?
You may be entitled to a payment if, from the 2024/25 tax year onwards, you:
- paid contributions to the LGPS or another workplace pension scheme that uses a net pay arrangement, and
- did not receive tax relief on those contributions because you did not pay income tax.
HMRC will assess eligibility for each tax year separately, so some people may qualify for payments for more than one year.
Do I need to apply?
No. If you are eligible, HMRC will contact you directly. You do not need to apply for the payment or contact HMRC to ask for it.
HMRC will write to eligible individuals or contact them through their Personal Tax Account with details of how to receive the payment.
Watch out for scams
As HMRC will be contacting people about money they may be owed, fraudsters may try to take advantage of the situation.
Remember:
- HMRC will never ask you to transfer money to them to receive a payment
- HMRC will never ask for your PIN numbers or passwords
- If you are unsure whether a message is genuine, you can search check if an email you’ve received from HMRC is genuine – GOV.UK – the subject ‘low earner’s pensions payment’ will be included in the list from August 2026.
If you think you may be eligible, there is nothing you need to do at this stage. Simply wait to hear directly from HMRC from August 2026 onwards.