HMRC has confirmed that while the top-up payments for individuals affected by the net-pay anomaly will still be made for the 2024/25 tax year, these payments are likely to be offered later than planned, in 2026.

The net-pay anomaly affects workers who earn more than the auto-enrolment threshold of £10,000 a year, but who are under the income tax threshold, with women in low-paid or part-time roles particularly hard hit.

The Conservative government previously confirmed plans to address the net-pay earners loophole through a top-up system in October 2021, having initially committed to addressing the issue in its 2019 manifesto.

HMRC's latest Pension Schemes Newsletter confirmed that the current government remains committed to this policy, which will see approximately one million individuals in net pay schemes offered an annual payment of around £70.

In line with this, it said that the government will legislate to ensure that the top-up payment will not impact benefit entitlement or national insurance.

HMRC also reassured the industry that the impact on pension scheme administrators is expected to be minimal, as it will contact and pay eligible individuals directly.

However, HMRC confirmed that while top-up payments for individuals will still be made for the 2024/25 tax year and subsequent years, the payments for 2024/25 are likely to be offered later than planned, and are expected in 2026.

This delay is expected to prompt some concern within the industry, as pension organisations had already previously raised concerns over the fact savers would have to wait until 2025 to get these payments.

---