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Money laundering measures may hit stakeholder sales

Pension experts are warning that anti-money laundering measures could be a barrier to the take-up of stakeholder among the target market.

Many are hoping there will be a rethink about the requirement for would-be investors to provide extra documentation, which it is feared will deter many from taking out a plan.

The money laundering prevention requirements have not previously applied to pensions on the grounds that proof of earnings is required.

Savings products are already subject to the rules, which require applicants to provide evidence of their address to guard against investments being used for money laundering.

Some in the pension industry hoped that stakeholder and personal pensions would remain exempt from the requirements amid concern that the need to provide extra documentation would serve as a deterrent to low earners.

Scottish Life head of communications Alasdair Buchanan says: “It looks like anyone looking to join a stakeholder scheme will need to provide the documentation required by money laundering laws. Stakeholder margins are very tight already and it looks like no one in the industry has picked up this potentially huge issue.

“This is bad news for advisers and bad news for providers but the biggest loser could be the Government. This is because it will be a barrier for people taking out stakeholder, which threatens to undermine the Government&#39s aim of getting as many people as possible to save through stakeholder.”

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