Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to ensure that low earners in Net Pay pension schemes do not suffer lower take home pay as a result of their employer’s scheme choice.

Legislation introduced in 2023 requires HMRC to make a top-up payment to those individuals contributing to a pension scheme using a net pay arrangement, whose total taxable income is below their personal allowance.

This means that low earning pension savers should receive similar outcomes regardless of whether they are members of a relief at source pension scheme or a net pay pension scheme.

HMRC are developing the IT solution to make these payments, in line with legislation, as soon as practicable in the tax year after the pension contributions were made. The first payments will be made in tax-year 2025-26 in respect of contributions made during 2024-25.