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Dormant bank cash could fund UK community projects

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20/03/2007

Details about the Government’s plans for dormant bank funds and building society accounts have emerged from the Treasury today.

Cash from bank and building society accounts which have seen no activity for 15 years will be transferred to a central fund, although a contingency fund will be held in case customers remember their accounts and wish to access their money.

Some analysts have estimated that up to £400m could be held in dormant UK current accounts, with the potential for tens of millions more to come on stream as more accounts become dormant.

“This is a unique opportunity to provide for worthwhile reinvestment in youth services, financial inclusion and capability, while balancing the financial interest of consumers,” said Ed Balls, economic secretary to the Treasury.

The idea for using dormant cash came in the 2005 pre-Budget report and many in the banking community support the proposals.

“I was in the banking sector for my entire career, and dormant, or unused, accounts were the bane of my professional life,” said Willie Smith, who used to work for one of the Big Five as a senior executive.

“To use the money sitting idly in these accounts for community purposes is a splendid idea and one which I wish we had access to in the past. If nothing else it will shake up some of the customers to reactivate their current accounts.”

 

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