Britain’s growing dormant cash pile set to be a windfall for charities
Unclaimed insurance payouts, pensions and shares will soon be used to fund charities in a move that could collect up to £880m from lost and forgotten accounts. Next month will see the first of a series of significant changes to a government scheme which moves “dormant” money from financial institutions to the charity sector.
The Reclaim Fund, set up in 2011 to distribute the cash from bank and building society accounts that have been left unclaimed for at least 15 years, will start targeting dormant pension benefits, insurance assets, collective scheme investments and shares in FTSE-listed companies from early next year.
Over the last 11 years, some £1.6bn has been taken from dormant bank accounts, £880m of which has been passed on to charities.
The expanded scheme will bring in a large number of new financial products from the first three months of next year. A pilot starts next month.
Once the accounts have passed a minimum number of years untouched – 12 in the case of some of the new additions – the provider will try to contact the holder and, if unsuccessful, will then pass on the money to the fund.
“The government legislated to expand the scheme into broadly three new asset classes, the first of which is insurance and pensions, so the lost proceeds from contracts that people have with firms,” says chief executive Adrian Smith.
“The second area is in FTSE-listed company shares. So if you had shares with Vodafone or Coca-Cola, or something like that, and you’d lost those shares, that would be the second sector.
“The third is investments … unit trusts and investment bonds that you might have had with JP Morgan or Schroders, for example.”
Dormant shares will be sold and the money passed on to the fund. It is estimated that
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