UK to release funds from dormant accounts
A Dormant Bank and Building Society Accounts Bill was introduced into the UK parliament on 7 November to provide the legislative framework for a scheme to allow monies to be released from unused bank and building society accounts to fund community projects.
The Bill proposes that accounts be considered dormant after 15 years. At that point, around 80% of money in dormant accounts remains permanently unclaimed. With shorter periods the pattern of reclaim rapidly becomes higher and less predictable, said the British Bankers' Association.
Prior to the scheme coming into operation the banking industry has also committed to undertaking a further reunification initiative aimed at re-uniting customers with their lost accounts where a trail can be found. Analysts believe there could be £400 million lying in dormant accounts
"The government and the banking industry have been working together to bring about an unclaimed assets regime," said BBA chief executive Angela Knight. "This will release money from unused bank and building society accounts for use on community causes and will crucially leave undisturbed the rights of account holders or their legal heirs to reclaim their money at any time.
"If you have money in an account, it will always be your property - or if you die, it will become part of your estate. This is the case no matter how many years pass."
The key to this is the inclusion of an appropriate definition in the legislation that ensures that money is only transferred which is likely to be genuinely unclaimed. A central reclaim fund independent of the industry and government will set aside money to meet the cost of future reclaim before handing over the balance for use on community causes.
The BBA said it is also working with the Building Societies Association and National Savings and Investments to improve the accessibility of free central tracing services.
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