If you paid into a workplace pension but didn't earn enough to pay Income Tax, you could be due a tax rebate from HMRC.
Around one million people are expected to receive money from HMRC after missing out on pension tax relief.
The average payment is expected to be around £70 a year — although you could get more or less.
You could be due a tax rebate if:
you paid into a workplace pension;
your pension used a net pay arrangement;
your income was low enough that you missed out on some or all of the tax relief on your pension contributions.
The payments apply to pension contributions made from the 2024/25 tax year onwards.
HMRC will work out whether you're eligible.
Some workplace pensions use a system called net pay.
Your pension contribution is taken from your pay before Income Tax is calculated. This normally gives taxpayers their pension tax relief automatically.
But if you didn't earn enough to pay Income Tax, there was little or no tax to save — so you could miss out.
HMRC is now making payments to eligible workers to put this right.
Some well-known workplace pension providers using net pay arrangements include:
NOW: Pensions,
Smart Pension,
Cushon,
TPT Retirement Solutions.
The People's Pension normally uses relief at source, but employers can choose to use net pay instead.
Other workplace pensions also use net pay, so don't worry if your provider isn't listed.
You don't need to work this out yourself — HMRC will identify who is eligible.
The average payment is expected to be around £70 a year.
But £70 isn't a fixed amount.
Your tax rebate will depend on how much you paid into your pension and how much tax relief you missed.
So you could receive more or less than £70.
No - HMRC will contact you.
You don't need to apply or contact HMRC.
If you're eligible, HMRC will contact you by post or through your Personal Tax Account and explain what you need to do to receive your money.
The payment will be made directly to you, not into your pension.
Payments relating to pension contributions made in 2024/25 are being rolled out during 2026 and into early 2027.
HMRC will assess eligibility for each tax year, so you could qualify for another payment in future years.
You don't need to make a claim.
Make sure HMRC has your correct details and look out for a letter or notification in your Personal Tax Account.
Be careful if you receive an unexpected text, email or call saying you're owed a tax rebate.
Don't give anyone your passwords, PINs or banking security information.
If you're unsure, go directly to GOV.UK rather than following a link in an unexpected message.
Paid into a workplace pension?
Didn't earn enough to pay Income Tax?
HMRC could owe you money.
Around one million people are expected to benefit, with an average payment of around £70 a year.
You don't need to claim — HMRC will contact you if you're eligible.
This article provides general information and is not financial or tax advice. Eligibility and the amount of any payment will be determined by HMRC based on your individual circumstances.