Dormant money scheme to be expanded
Since the launch of the Dormant Assets Scheme in 2011, £600m has been transferred from High Street banks and building societies to various good causes. The funds have come from bank accounts that are classified as dormant: where banks are unable to trace the account holders
The scheme is to be expanded.
The government is consulting on expanding the scheme to the following sectors:
- Insurance and pensions
- Investment and wealth management
Assets proposed to be within the scope of the expansion include:
- Dormant insurance policy proceeds
- Dormant share proceeds
- Dormant unit proceeds
- Dormant distributions and proceeds from investment assets
- Other dormant security distributions
Customers – account holders – will always be able to reclaim the same amount they would have had if their assets were never transferred, as they do in the current scheme, and companies would continue to participate on a voluntary basis.
There are over 30 participating firms including HSBC Bank plc, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland, The Co-operative Bank plc.
The definition of a dormant bank or building society account is in the Dormant Bank and Building Society Accounts Act 2008: an account is ‘dormant’ at a particular time if the account has been open throughout the period of 15 years ending at that time, but during that period no transactions have been carried out in relation to the account by or on the instructions of the holder of the account.
Participating firms also agree with the Reclaim Fund Ltd, which administers the scheme, to undertake tracing exercises before transferring dormant accounts.
Under the scheme, funds are held by Reclaim Fund Ltd (RFL). RFL is authorised and regulated by the Financial Conduct Authority and holds sufficient money to cover any reclaims while distributing the surplus to The National Lottery Community Fund for social or environmental initiatives across the UK.
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