Charities set for £2bn funding from dormant accounts

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Bank cards in a walletImage source, PA
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Dormant accounts have already yielded £350m in cash for good causes

Charities and communities could be in line for a windfall after up to £2bn was found in dormant stocks and shares.

An investigation has identified unclaimed assets including insurance policies, investment portfolios and pensions that could be distributed to good causes across the UK.

Minister Rob Wilson said the money could change millions of lives.

But the National Council for Voluntary Organisations said charities should help decide where the cash should go.

The dormant accounts scheme has already identified £1bn of dormant cash, with £360m distributed to good causes.

The Independent Dormant Assets Commission was set up in 2015 to look at whether the current dormant asset scheme covering unused bank and building society accounts should be expanded.

Owners' sought

The group's report identified further untapped assets, including £715m from investments and wealth management, £550m from the pensions and insurance sector, £150m from securities, and £140m from banks and building societies.

Ministers will consider the commission's findings, but if they decide to follow its recommendations to expand the dormant assets scheme and distribute the cash, charities could be in line for a significant funding boost.

Cash would only be distributed after attempts to reunite the money with its rightful owner after a specified term had elapsed.

Image source, keith brofsky
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Lonely and isolated elderly people have already benefitted from the scheme

Civil Society Minister Rob Wilson said: "This money could help change millions of lives across the country by helping good causes rather than gathering dust in dormant accounts.

"The reason I set up the commission was to unearth new resources that would allow our charities and voluntary groups to become more sustainable and independent. But crucially, also to deliver really important local services over the long term."

The commission's chairman, Nick O'Donohue, said: "The commission believes that there may be up to £2bn worth of assets lying dormant across a number of financial industries and products.

"With the support of the financial services sector, we believe it is possible to reunite many of these assets with their owners and, where this is not possible, to free up substantial incremental funds for good causes in the UK."

'Sterling work'

Organisations that have already benefitted from the current scheme include Age UK's Reconnections programme in Worcestershire, which works to reduce loneliness in the area, and London's Think Forward group, which provides disadvantaged young people with opportunities in education, training and employment.

Caroline Abrahams, Age UK's charity director, said: "There is no doubt that a funding boost would change lives by enabling charities like ours to deliver really important local services that make a big difference to people and the communities they live in.

"Released funds from dormant accounts have been really important over the last 18 months in helping Age UK Hereford & Worcester to reach hundreds of lonely and isolated older people in their area and reconnect them with others around them."

Michael Birtwistle, finance expert at the National Council for Voluntary Organisations, which represents charities, said the commission had "done sterling work" and the newly found assets "could prove transformational for good causes".

But he added: "Now what matters is making sure they're distributed in the best way, which means the government needs to talk to charities about where these new resources can make the biggest difference."

The British Bankers' Association, which represents the UK's financial services industry, said its priority remained reuniting consumers with their money.

A spokeswoman said four million people had visited the My Lost Account advice service since 2008, with 950,000 using it to try and track down information.

"The service continues to offer consumers free guidance on recovering money from dormant or lost accounts, across banks, building societies and national savings."