Orphan investments worth millions could be handed to good causes under plan to expand ‘dormant assets’ scheme
- Some £600m in inactive bank accounts has gone to charity since 2008
- Investment funds, shares and insurance products might be covered in future
- Pensions are excluded due to huge upheaval and rule changes in recent years
- Plan for a pension dashboard showing all pots in a single place is also under way
Millions of pounds of investment and insurance policy proceeds left unclaimed by their owners could be released to charity.
A ‘dormant assets’ scheme has handed some £600million sitting in inactive bank accounts to good causes since 2008, and the Government is now consulting on extending this to investment funds, shares and insurance products.
A rule that money must always be returned in full should the original holder ever come forward would apply. And firms would still have to try to contact old customers and reunite them with their cash.
Dormant assets: Existing scheme has handed millions of pounds sitting in inactive bank accounts to good causes since 2008
Savers often lose track of old accounts, pensions and investments over the course of a lifetime, and unfortunately a lot of this money is never claimed.
Read more here about how to find your lost assets.
Pensions aren’t part of the new proposals for dormant assets for now.
This is because of the amount of upheaval around retirement savings in recent years, and the pending launch of an online ‘pensions dashboard’ showing people all their pots in a single place.
‘A current priority of the government in the pensions landscape is maintaining the level of trust individuals have in their pension savings, and it believes that these changes need time to fully develop,’ the Government explains.
Beware bogus sites
Some scammers will offer to help you find lost pensions.
Take care if you do an online search for the Government’s free Pension Tracing Service as many companies using similar names will pop up in the results.
These will also offer to look for your pension, but try to charge or flog you other services, and could be fraudulent.
However, it is encouraging comments on whether pensions should be included during the consultation.
At present, money held in savings and bank accounts is passed to a special Reclaim Fund if it remains untouched for 15 years.
The time periods could be different for other assets – 12 years is being floated for some investments and six years for others.
The Government consultation follows an industry report which looked at how the existing dormant assets scheme, which involves more than 30 banks and other institutions, could be expanded to give more money to good causes.
The Economic Secretary to the Treasury, John Glen, says: ‘Through this scheme we have channelled hundreds of millions of pounds into causes to help those most in need.
‘Today’s announcement builds on vital work by industry to broaden the scheme.
‘By expanding it beyond bank accounts to include assets like insurance products, we will be able to unlock even more funds for worthy causes up and down the country.’
Money raised to date has been spent on the following projects.
– Big Society Capital, an independent financial institution, launched in 2012 and has been handed £400million.
Got a handful of old shares it’s not worth the cost or hassle of selling?
You could donate them to charity via ShareGift – here’s how.
It has supported more than 2,000 vulnerable people to move into appropriate housing, 26,000 disadvantaged young people to get job and training opportunities and 250,000 people to live in a home with access to community energy.
– Fair4All Finance was set up in 2019 with £55million from the dormant assets scheme to support the financial wellbeing of vulnerable people, and increase access to fair and affordable financial products and services.
– The Youth Futures Foundation was given £90million to help unemployed, disadvantaged young people across the country to find jobs.
It provides help to youth employment organisations and works with employers to create jobs with tailored support.
The Government consultation on expanding the dormant assets scheme is here and the deadline to respond is 16 April.