The British government has launched a consultation in order to gather views on its proposals to expand the dormant assets scheme to include new financial assets.
The government is considering plans to extend the dormant account scheme to unclaimed accounts payouts and share sales. The broadening of the scheme is expected to bring in £2bn worth of unclaimed accounts.
A dormant account is an account that has had no financial activity for long time.
The UK’s dormant assets scheme enables participants to channel funds from dormant accounts towards good causes in the United Kingdom through an independent body called Reclaim Fund Limited (RFL).
RFL distributes surplus funds to Big Lottery Fund, which in turn makes these available for good causes in England, Scotland, Wales and Northern Ireland. Each devolved administration makes decisions on how these funds are used.
Expanding the dormant assets scheme
The dormant assets scheme’s success has resulted from the financial services industry’s participation. The Independent Dormant Assets Commission looked at the scheme and made recommendations to Government on how it could expand to benefit more good causes.
In the February 2018 response, the government welcomed the recommendations from the Commission.
The proposal was to expand the scheme beyond bank and building society accounts. The new assets contemplated include assets from the insurance and pensions, investment and wealth management, and securities sectors.
The government asked four senior industry champions to work with their respective sectors and set out a plan to expand the scheme.
The government is now inviting input on the detailed proposals to expand the scheme.
“We are particularly interested in hearing views from potential participants, consumer groups, regulators, and interested individuals,” the government said in a release.
Participation in the dormant account scheme by banks and building societies is voluntary.
Customers are able to reclaim their money at any point and RFL retains a reserve to meet reclaims from customers.
So far more than £600m has been redistributed to charities helping young people get into work and housing, and others tackling financial exclusion.