HM Revenue & Customs (HMRC) has taken down a webpage which gave savers wrong pension calculations, after complaints from Royal London.
The taxman said yesterday (17 April) in an email that this error isn't "in line with the level of service that HMRC is committed to provide".
A spokesman for HMRC said: "To make sure customers get the right results from the calculator in future, we have temporarily removed access to the calculator until we have updated it.
"We apologise for any inconvenience caused by this."
HMRC is now working to update the annual allowance calculator and will keep consumers informed on its progress on this via its pension schemes newsletters.
Under current annual allowance rules, for most taxpayers pension contributions of up to £40,000 per year qualify for tax relief.
But since 2016 to 2017, higher earners have faced a reduced allowance which can fall to as little as £10,000 per year for those on the highest incomes.
The impact of this change is reduced by the ability of taxpayers to 'carry forward' unused annual allowances from up to three years earlier, Royal London stated.
According to the provider, the HMRC website was getting this calculation wrong, in some cases for both 2017 to 2018 and 2018 to 2019.
This could lead to individuals wrongly believing that they should stop saving into a pension because they have exceeded their annual limit.
One Royal London customer who used the site was told that he was limited to £10,000 in pension contributions for 2018 to 2019 when the correct figure was around £35,000.
When the provider raised the issue with HMRC on Monday (16 April), they said: "We are aware that since 6 April 2018 the annual allowance calculator is showing less annual allowance than is due for the year 2017 to 2018 onwards, and we apologise to customers for this.
"We are working to fix this issue as soon as possible."
Sir Steve Webb, director of policy at Royal London and former pensions minister, called for more urgent action from the taxman.
He said that "it is beyond belief" that they were "knowingly allowing taxpayers to get incorrect information from their website and potentially to make major financial decisions on the strength of dodgy data".
Gem Durham, independent financial adviser at Obsidian, agreed with Sir Steve.
She said: "For someone to potentially lose that valuable contribution allowance I think it is a serious matter. Another reason to use a good IFA."
According to the provider, the taxman admitted in September 2017 that there was a different problem with the same website.
In that month's pension schemes newsletter, HMRC acknowledged an error in carrying forward unused allowance from 2012-13 but it was not until the November 2017 newsletter that they said the problem had been fixed.
In the interim period the website continued to provide incorrect data for some taxpayers, the provider added.
maria.espadinha@ft.com
