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.
Although it’s hardly the ideal scenario, this ‘dormant’ cash can at least be put to good use if its real owner doesn’t come forward.
That’s the thinking behind the dormant assets scheme, which has handed some £600million to charitable causes since legislation on inactive accounts was passed in 2008.
Moves are now underway to expand the scheme from money held in savings and bank accounts, which is passed to a special Reclaim Fund if it remains untouched for 15 years, to dormant cash in investment funds, shares, pensions and insurance products too.
Alternative use for lost cash: Dormant assets scheme has handed some £600million to charitable causes to date
The rule that money must always be returned to its owner should they ever come forward will continue to apply. And firms will still be expected to make every effort to contact old customers and reunite them with their cash.
We round up the proposed changes, and a money expert offer tips on tracking down lost savings, investments and pensions below.
What happens to dormant cash?
Under the dormant assets scheme, cash orphaned in bank and building societies for 15 years is handed to the Reclaim Fund, which then distributes it to charity.
Some 27 institutions participate, including all the high street banks.
Plans to expand the scheme to other financial sectors are in the works, although there is no launch date yet.
The definition of ‘dormant’ and the rules around when money can be given to charity will differ between products – but the owner will retain the right to reclaim their cash in all cases.
Investment funds
Money in funds will be considered dormant when there have been no active transactions for 12 years. Any cash held will be regarded as dormant after six years.
Pensions and insurance
For products with an end date, unclaimed money will be deemed dormant after seven years, or when it’s established that a deceased owner has no next of kin.
For open-ended products, this will happen when it’s certain a deceased owner has no next of kin, or seven years after a death is confirmed and there is no ongoing contact with those managing the estate.
Shares
Shares and unclaimed dividends will be considered dormant if there is no contact from the shareholder for 12 years, and:
– the shareholder is deemed to have ‘gone away’, meaning three or more items of post have been returned
– if applicable, at least three dividends have been payable but not cashed.
Find more details here.
Rentokil gives unclaimed shares and dividends to good causes
Pest control and business services giant Rentokil Initial launched its own scheme to put unclaimed shares and dividends to good use earlier this year.
Under company law, these are returned to the firm after 12 years, and Rentokil said in March it held £1million worth of them.
Instead of just keeping the cash, it set up a ‘Rentokil Initial Cares’ fund to distribute them to causes the company and staff already backs under a ‘protect people and enhance lives’ banner – Malaria No More, rainforest conservation charity Cool Earth and community health education programme Better Futures.
FTSE 100-listed Rentokil launched its own scheme to put unclaimed shares and dividends to good use earlier this year
Rentokil says that if a legitimate claim for up to £3,500 worth of dividends is made after the 12-year cut-off point, it will honour it.
Chief executive Andy Ransome says: ‘After trying our best to contact the relevant shareholders, we will now use the value of any unclaimed shares and unclaimed dividends to support good causes.
‘But imagine this kind of impact multiplied a hundred times over – it could make a huge difference and I hope other companies will join us.
‘Our new good causes fund – Rentokil Initial Cares – will support our colleagues’ own charitable efforts around the globe… I would expect us to commit around £250,000 to good causes each year.’
How do you track down YOUR lost assets?
If you have old savings, pensions or investments and haven’t had contact with the providers in years, be proactive and you could discover a trove of lost cash.
Sarah Coles of Hargreaves Lansdown offers the following tips.
Investments
If you know the company you held investments with, you can contact them and they’ll help reunite you with them, she says.
If you don’t have any paperwork, it’s worth trying My Lost Account. The drop-down menus show you all the companies it is searching, so you can see if your investment company is covered.
Alternatively you can use the Unclaimed Assets Register.
This service, run by Experian, does come with a fee, but it lets you search the records of around 75 different providers including investment firms and pension companies, so it could save you some legwork.
Lost accounts
If you know the business you held money with, the best thing to do is contact them direct and ask. They will need you to prove your identity, but then will be able to track down your account.
If you’re not sure where your accounts are, things are more straightforward than they used to be, because the banks, building societies and NS&I have launched a free tool which lets you search for accounts with 30 banks, 43 building societies and NS&I: My Lost Account.
Lost pensions
With workplace pensions, you’ll need the name of the employer or the scheme, plus the dates you worked there.
Once you have a phone number or address, get in touch and ask for contact details of the administrator. For personal pensions, try to dig out any old paperwork to give you an idea of where your money is held.
If you can’t find any paperwork, try the government’s Pension Tracing Service.
It will search 200,000 schemes and supply contact details of companies you have a pension with. You can then call the company concerned and get them to unearth your forgotten cash.
Lottery wins
You can check for unclaimed lottery prizes on the National Lottery website.
Child Trust Funds
You can track down your CTF through the government website – as long as you have parental responsibility for the child. You need to sign into the Government Gateway, or sign up for an account.
Then you can fill out a form with your child’s details, and they’ll tell you where the CTF is held.
Once you’ve been reunited with your CTF, you should seriously consider transferring the money to a Junior Isa.
Cash Jisas tend to offer higher interest rates, while investment Jisas may have wider investment choices and lower charges.
Premium Bonds
For Premium Bond prizes, all your bonds will be held under a single holder number, so you can enter this to see if there’s anything outstanding.
The best way to avoid missing any prizes in future is to have them paid directly into your bank account. If you don’t know your bond holder number, contact NS&I and it will send it to you.
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