£2.8 billion in dormant accounts

There may be as much as £2.8 billion worth of dormant accounts in UK banks and building societies belonging to people who are alive and could potentially reclaim the money, according to a survey by Experian.

However, just over one fifth of people were planning to use the account again and 12 per cent had left it to accumulate interest. And around 26 per cent of inactive account holders simply do not know how to get back in touch with their funds.

The survey, undertaken for the Unclaimed Assets Register (UAR), part of Experian, came as the Chancellor announced his pre-budget report in which reference was made to the issue of unclaimed assets. As the Government welcomes the banking industry’s commitment and progress towards introducing a scheme to allow genuinely unclaimed assets to be reinvested in community, the survey has revealed huge support from the public for such a scheme.

The pre-budget report indicated a commitment from both the Government and the banking industry to reunite individuals as a first priority, with a comprehensive reuniting exercise before any such scheme is put in place. According to the survey by the Unclaimed Assets Register, two-thirds of the population support the idea of making these unclaimed funds available for charitable projects as long as the true owners can still claim their money.

The Government has indicated that it is considering a period of 15 years before funds can be used, a time frame supported by the survey, which found that almost two-thirds (62 per cent) of respondents felt that accounts should be inactive for 10 years or more before they could be put to charitable use. The value of accounts that have been dormant for more than 15 years or where the owners are unsure as to the period, amounts to £301 million.

However, despite strong public support for the Government’s idea, much of the public is still unaware of how to find their lost money.

Keith Hollender, Managing Director of the Unclaimed Assets Register, said: “The survey has indicated around £2.8 billion worth of dormant accounts belongs to people who are alive. However, this does not include people who have died and may have left inactive accounts. The addition of these accounts can be no more than a guess, but it is likely that the total would be far greater.

“The decision to make these unclaimed funds available to charitable projects is very unlikely to disenfranchise true owners and with the establishment of a technically advanced search facility, recovery of such funds should prove easier than in the past. The benefits will be more fully enhanced, however, by pro-active efforts from banks and building societies ahead of the legislation.

“The average dormant bank or building society account in the UK holds around £182 – hardly an insignificant amount. The average amount held in accounts that have been dormant more than 15 years is £127.

“It was also interesting to find that a third of the respondents actually admitted to having an untouched bank or building society account. The main reason given for this is because they felt that the amount was too small to worry about, with 53 per cent admitting to holding less than £10 in their inactive accounts. However, as just over one fifth (21 per cent) were planning to use the account again and 12 per cent had left it to accumulate interest, it is important that steps are taken to ensure these are identified.

“It is clear, as indicated by the Government, that awareness needs to be raised amongst the public so that they know how to find their lost money. In addition, organisations need to make full use of sophisticated techniques to reunite those funds with their rightful owners.”

The Government has confirmed the appropriateness of introducing legislation in support of the unclaimed assets scheme to protect the interests and rights of both consumers and the industry. The UAR survey has revealed that a significant proportion of the public would support this approach, with 46 per cent of the respondents feeling that the Government should regulate the transfer of funds. 37 per cent felt that the transfers of funds should be self-regulated by banks and building societies, while 17 per cent said that they did not know.

Keith Hollender added: “It is clear that the Government has been in regular consultation with UK financial institutions to develop a scheme that will provide more funds to charity. However, is it also important that care is taken to identify owners who have left their dormant accounts open for a purpose or have simply forgotten about them. The financial services industry is increasingly aware of its responsibility to trace the owners of lost assets and so we are delighted to be helping many of the leading financial institutions on this important initiative. By working with the UAR, they can now find those ‘lost’ customers and then rebuild and maintain their relationships with them.”