Image source, Getty ImagesByKevin PeacheyCost of living correspondentPublished1 hour agoYou may be among the one million people, mostly women, who will receive letters explaining how you are eligible for top-up pension payments - and it's not a scam.
Those entitled are low earners who have missed out on the money because of the way their pension is administered.
HM Revenue and Customs (HMRC) will write to people over the next few months, explaining how to receive the payment. Typically they will be due £70, but that may vary considerably depending on their circumstances.
Anyone eligible will be contacted automatically but, if you receive a letter, there are various checks you can do to ensure the letter is genuine so you don't get hoodwinked.
When you pay into a pension, the government allows some of the money that would otherwise have been paid in tax to go towards your pension instead. This is known as tax relief, external.
For relatively complicated reasons, some low earners whose employer used what's known as a Net Pay Arrangement pension scheme received less than those whose pension was administered through a Relief at Source scheme.
Employees have no control over the type of scheme that's used, so the government has decided to top up those who have missed out, through what's called a low earner's pension payment.
Typically, they would have earned close to, but not more than, £12,570 a year (the starting point for paying income tax).
Top-up payments will initially be paid for the 2024-25 tax year, with automated payments subsequently kicking in for later years.
Customers don't need to apply. If eligible, you'll be sent information by HMRC - the UK's tax authority - in a letter or through your online personal tax account, external.
HMRC will not text, email or call you about it. If you receive such a call or message, it is a scam. Also, it will never ask you to transfer money, or ask for PIN codes or passwords.
Other ways to check contact is smooth and genuine include:
Searching Gov.uk for "check if a letter you've received from HMRC is genuine", and look for "Low Earner's Pension Payment"
Customers will be asked to provide their bank details through their personal tax account. Customers who are digitally excluded will be able to phone HMRC to accept their payment instead
"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 HMRC spokesman.
"Customers can check a letter is genuine on Gov.uk and should only respond via official HMRC channels."
Sir Steve Webb, partner at pensions consultancy LCP and a former pensions minister, said he was shocked at how few people the government expected to actually receive the payment.
The government has estimated the cost of the project to be much lower than if everyone who was eligible took up the payment.
"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," he said.
"It is vital that communications are effective to make sure that people get the money to which they are entitled."
HMRC says it will run an awareness campaign using social media and other channels.
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