HM Revenue & Customs has admitted that some of its pension systems are suffering “widespread” problems and as a result some of the data it has provided “should not be relied upon”.
In a letter responding to a freedom of information request by AJ Bell for data on the lifetime allowance, HMRC says: “Pension scheme services is experiencing systems difficulties in collating intermediate level of detail in some areas. It is now clear that these problems may be more widespread.
“IT is currently investigating this but it means the data we have already provided should not be relied upon. Until we are comfortable the data we produce is correct, it would be wrong to provide further summaries which may present a misleading and unreliable picture.”
In an open letter to Chancellor George Osborne, AJ Bell chief executive Andy Bell flags up the deficiencies.
He says HMRC as well as the Treasury are “unable to cope” with the recent spate of changes to pension rules.
Bell says: “Our attempts to calculate the impact of many of the previous government’s pension policies have revealed that the Treasury and HMRC are unable to cope with the irresponsible volume of change.
“We have submitted a number of FOI requests asking for fairly basic statistics. We have been provided with incomplete answers and have had to point out inaccuracies with the information provided.”
AJ Bell also used the open letter to urge Osborne to stop tinkering with the pension system and design a long-term sustainable framework for saving and encouraging private provision.
Hargreaves Lansdown head of pensions research Tom McPhail says: “It is disappointing to find that we cannot rely on the information provided by the people who are employed to manage our taxes.”
McPhail says that given the proposed public sector cuts under the new Government, this problem is only likely to get worse.
He adds: “In the meantime, the new Government is trying to formulate a pension policy without knowing what all the numbers are.”
An HMRC spokeswoman says: “The issues referred to in this correspondence relate only to access to some of the underlying statistical information. They do not affect live running of the system and have no impact on external users.”
The news comes just weeks after HMRC apologised after incorrectly telling LV= that income drawdown investors could switch providers or buy an annuity before the age of 55 without facing an unauthorised payment charge.