By Jenne Mannion Signing up for a stakeholder pension won't be as simple as opening up a web page...
By Jenne Mannion
Signing up for a stakeholder pension won't be as simple as opening up a web page or signing a form at a local supermarket. Rather, it is set to become quite a complicated process, as anti-money-laundering measures are to apply to all new personal pension contracts, including stakeholder pensions, which are to be introduced into the UK from 6 April this year.
That means that up to four examples of identification, with a proof of address, may be required to sign up to a stakeholder, as well as other money purchase arrangements. The types of identification required are likely to include passports, utility bills and bank statements.
Alasdair Buchanan, head of communications at Scottish Life, said stakeholder and other personal pensions are no longer exempt due to new rules that allow up to £3,600 a year to be contributed into a pension from non-earners, such as spouses or carers. Previously, proof of earnings was required for pension contributions, which meant pensions were exempt from the Treasury's anti-money-laundering requirements.
"The requirement to issue identification provides problems for advisers and providers, as well as individuals. There is no great reason for this to be done and people likely to sign up for stakeholder are unlikely to benefit from money laundering," Buchanan said.
"Some people find it quite difficult to get sufficient identification together, and it means that signing up for a stakeholder won't be able to be done easily over the internet, or at sales places like Tesco," he said.
He expects that the requirement for additional identification will prove a barrier for sales, which goes against the government's objective of encouraging people to save for their own future.
Although it is not certain, occupational schemes look likely to be exempt from the money-laundering rules.