Government announces expansion of Dormant Assets Scheme

The UK Government has announced that dormant assets across the insurance and pensions, investment, wealth management, and securities sectors are set to be unlocked, with the potential for more than £800 million to be made available to support the UK as it recovers from the coronavirus pandemic.

Funding raised through the expansion of the scheme will enable continued support of good causes, social investments and environmental initiatives.

This major expansion of the Dormant Assets Scheme marks the completion of a four year review and public consultation process. The responses showed widespread support for expanding the scheme from bank and building society accounts to include assets in these new sectors.

Led by the financial industry and backed by the UK Government, the expanded scheme will have consumer protection at its heart, with the priority continuing to be locating and reuniting people with their financial assets.

Where that is not possible, more businesses will now be allowed to participate voluntarily in transferring dormant assets into the scheme. People will still be able to reclaim their assets in full at any time.

Since 2011, 30 banks and building societies participating in the current scheme have enabled the release of over £745 million from dormant accounts that have been inactive for at least 15 years. These funds have been used to support a range of social and environmental initiatives across the UK, including helping young people on the path to employment, tackling financial exclusion, growing the social investment market, and supporting renewable energy solutions.

£150 million was unlocked in May 2020 to support the UK’s charity and voluntary sectors, as they continue to play a vital role during the coronavirus pandemic. The funding is supporting urgent work to tackle youth unemployment, expand access to emergency loans for civil society organisations and help improve the availability of fair, affordable credit to people in vulnerable circumstances.

What is the Dormant Assets Scheme?

The Dormant Assets Scheme is led by industry and backed by the government with the aim of reuniting people with their financial assets. Where this is not possible, this money goes towards social and environmental initiatives across the UK. Consumer protection is at the heart of the Scheme. Owners are able to reclaim what they would have been owed had their asset not been transferred into the Scheme at any time.

A dormant asset is a financial product, such as a bank account, which has not been used for many years, and which the provider has been unable to reunite with its owner despite efforts aligned with industry best practice. The Scheme allows businesses to transfer funds voluntarily from dormant assets. They can decide if they want to join and how much they transfer.

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