The Commission for Unclaimed Assets has recently published a consultation paper to consider the best use of funds lying in dormant accounts.
They have proposed to set up a Social Investment Bank, funded by the unclaimed assets, which would distribute funds to various community organisations.
But there is confusion within the industry on the definition of ‘dormant accounts’, and the exact amount of unclaimed assets that may exist. Estimates range from several hundred million pounds to around £20 billion.
Research from the Building Societies Association has suggested that there may be between £50 million and £70 million in lost building society savings accounts. This means where the building society has lost touch completely with the owner for at least 15 years.
The problem with using this money is that if it is held in either a bank or building society, it currently belongs to the account holder without any time restrictions, so legally, no one can touch it apart from the account holder.
Our view
15 years is not long enough. We actually consider this is theft at such a short notice period. Most people can be traced via HM Revenue and Customs and Department for Work and Pensions records, these are not openly available to Banks or Building Societies or Insurers.
A minimum 50 year dormant window should be set with investment companies required to conduct a search every 5 years for orpan account owners. This will cost pennies in a computer search for Government, and if they want to money to use for social funds, they should pay the minimal costs to search.