The government intends to legislate for an expanded dormant assets scheme in a move it says could make more than £800m available for charitable activities.
The Department for Digital, Culture, Media & Sport said the dormant assets scheme would be expanded to include the insurance and pensions, investment, wealth management and securities sectors.
Dormant assets are defined as those that are left untouched for 15 years or more and cannot be reunited with their rightful owners. The rightful owners are entitled to come forward at any time to reclaim their assets.
It is hoped that funding raised through the expansion of the scheme will enable additional support of good causes, social investments and environmental initiatives as the UK recovers from the coronavirus pandemic.
The planned expansion of the dormant assets scheme marks the completion of a four-year review and public consultation process, which DCMS said had widespread support.
The department began a consultation of the scheme’s expansion in February last year.
It came off the back of a 2017 publication of the findings of the Dormant Assets Commission, which estimated that a further £2bn in unclaimed assets could be made available for good causes.
The government has not set a timetable for the legislation, saying only that it intends to legislate for the expansion and will continue to work with industry, regulators, and Reclaim Fund to ensure its success.
The scheme will still focus on consumer protection, 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, and people will still be able to reclaim their assets in full at any time.
In May last year, the government made £150m available from dormant assets to support charities and social enterprises through the coronavirus pandemic.
Since 2011, 30 banks and building societies participating in the current scheme have enabled the release of more than £745m from dormant accounts that have been inactive for at least 15 years.
Baroness Barran, the Minister for Civil Society, said the expanded scheme provided two positive opportunities.
“Firstly it will highlight the potential importance for people to trace their lost financial assets,” she said.
“Secondly, where that is not possible, it will release over £800m for social investment that will make a real difference to people – both young and old – experiencing challenging circumstances across the UK as we work hard to recover from this pandemic.”