Ministers ponder legislation to widen dormant accounts scheme

In its response to recommendations made by the Dormant Assets Commission, the government says it will consider widening the scheme to include other financial assets, such as shares and bonds

Parliament might legislate to widen scheme
Parliament might legislate to widen scheme

The government will consider legislative changes to introduce proposals made by the Dormant Assets Commission to widen the dormant accounts scheme to other financial assets, according to the official government response to the commission’s final report.

In a report released almost a year ago, the Dormant Assets Commission, which was set up in 2015, said that expanding the dormant assets scheme to include financial instruments such as shares and bonds could unlock up to £2bn of additional funding for charities.

More than £1bn in funds had been found in dormant bank and building society accounts since 2008 through the dormant accounts scheme, which directed £360m of that money to good causes.

In its response to the 2017 report, published today, the government says it will consider legislation to expand the dormant accounts scheme to include other assets and financial instruments.

It says the industries managing the affected assets will lead the expansion of the dormant assets scheme, although this expansion will be phased in.

The commission’s core principles will be maintained: firms should prioritise reuniting customers with their assets before the money is transferred to good causes; assets transferred into the scheme can still be reclaimed in perpetuity; customers are not disadvantaged by having an asset included in the dormant assets scheme; and firms’ participation in the scheme is voluntary.

The government response says companies should focus on cash assets before non-cash assets because of the complexities of including non-cash assets with significant market variability in value.

Further work on the dormant assets scheme will be led by "senior industry champions", the government response says, and they will report on the scope of an expanded scheme in their sectors, definitions of dormancy and other technical and practical considerations.

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