£2bn funding boost for charities
Up to £2bn could be unlocked for good causes across the UK after experts found vast sums lying unclaimed in dormant assets such as stocks and shares, Minister for Civil Society Rob Wilson announced today.
The huge sum has the potential to further transform the charity sector, helping to improve communities and change lives. It was identified by the independent Dormant Assets Commission which found untapped assets in products such as unclaimed insurance policies and pensions.
This includes circa:
£715m from investments and wealth management;
£550m from the pensions and insurance sectors;
£150m from securities;
£140m from banks and building societies.
The Independent Dormant Assets Commission was set up in December 2015 to look at whether the current dormant asset scheme, that includes funds in banks and building societies, could be extended to other financial services. These include insurance products, stocks and shares, and pensions that have been classed as dormant.
The current scheme has already distributed £360m from accounts to go towards supporting good causes. Extending it could deliver lasting change to the way voluntary and charity sectors are funded.
The Association of British Insurers (ABI) welcomed the independent Dormant Assets Commission's recommendation to use unclaimed assets in the life and long term savings industry to fund charitable causes.
To help customers find unclaimed assets, the ABI is launching a Register of Consolidations to assist customers in locating long-term savings assets following mergers and acquisitions of companies.
Yvonne Braun, director of policy, long term savings and protection at the ABI, said:
"We welcome the Commission's recommendations to expand the scope of the Dormant Assets Scheme to certain assets within the long-term savings industry. The industry is committed to staying in contact with its customers and in addition to funding good causes we hope the expanded Dormant Assets Scheme will also lead to more customers being reunited with their assets.
"The launch of the ABI's new Register of Consolidations will make it much easier for customers to find out which company now looks after their lost assets. In future, the pension dashboard infrastructure should ensure consumers don't lose track of their pension assets in the first place."
Andy Parsons, managing director in Life, Pensions and Investments at Scottish Widows and Chair of the ABI Longstanding Customers Committee, said:
"On behalf of the ABI Longstanding Customers Committee, I would like to welcome the proposed extension of the successful Dormant Assets Scheme in Banking to include unclaimed Insurance customer assets. Our members make considerable efforts to trace customers, but where these are unsuccessful, the Dormant Asset Scheme will provide an alternative route to help towards the constructive return of these assets."
Responding to the recommendations of the Dormant Assets Commission the ABI says the insurance industry is always exploring new ways to keep customers engaged and prevent assets from being unclaimed in the first place, such as through the Pensions Dashboard project currently in its prototype phase. However, unfortunately the long term nature of many of the products sold means this is not always possible.