Dormant account scheme to include unclaimed insurance and investment assets
Since 2011, 30 firms, including all the major high street banks, have voluntarily transferred money from unclaimed accounts into the dormant assets scheme.
So far, more than £600m has been given to good causes such as to help young people gain employment, to benefit social causes and tackle financial exclusion.
But the government is looking to expand the scheme to cover insurance, investment and wealth management as well as securities in a bid to free up additional hundreds of millions of pounds for good causes.
A bank or building society account is considered dormant where there’s no activity, typically between one and three years. After 15 years, Reclaim Fund Limited distributes funds to The National Lottery Community Fund which makes money available for schemes in England, Scotland, Wales and Northern Ireland.
However, the consultation lays out proposals for the definition of dormancy, tailored to each asset type. The Department for Digital, Culture, Media and Sport (DCMS) added it’s “not minded to include pensions” given the plan for the pensions dashboards but encourages views on this as part of the consultation process.
Further, it said consumer protection “will remain at the heart of any expanded scheme”, with the priority to continue to reunite customers with their money. Only where it’s not possible to find the asset owner, will funds be released to support worthy causes.
However, if at a later date a consumer discovers they had a dormant account and their funds have been transferred into the scheme, they will always be able to reclaim the full amount transferred.
Minister for Civil Society, Baroness Barran, said: “The dormant assets scheme is making a real difference to people across the nation. This includes helping to tackle youth unemployment, addressing financial exclusion and growing the social investment market.
“That’s why we are now seeking views on expanding the scheme to include even more unclaimed assets, in a way that continues to protect customers whilst potentially unlocking millions more pounds for good causes.”
See YourMoney.com’s guide on how to reclaim lost money.