Dormant accounts - don't lose your lost money!

The Unclaimed Assets Register estimates (there are no hard and fast figures) there is currently £15.3 billion in unclaimed assets in the UK financial system. Around £5 billion is in dormant accounts, with around £3 billion each in pensions, National Savings and shares with accumulated dividends and £1 billion of unclaimed insurance policies.

Mylostaccount.org.uk, the first free, 'one-stop shop' website to trace building society, bank and National Savings and Investments (NS&I) accounts, was launched on 30 January 2008. It's designed to make searching for lost accounts quicker and easier and brings together three existing schemes from the British Bankers Association (BBA), the Building Societies Association (BSA) and NS&I, all of which have been running since 2001.

Why is this important now? Well, it was one of those manifesto pledges that no one at the time took much notice of. However, with the public sector finances deep in the red and the Lottery Good Causes fund robbed to bankroll the 2012 London Olympics, the Government's intention to seize "unclaimed assets" - as laid out in its 2005 Election Manifesto - has taken a step closer to becoming law. In the Queen's Speech at the State opening of Parliament last November, the Dormant Bank and Building Societies Bill (Formally Unclaimed Assets Bill) was announced.

How the Government is after the money you've mislaid...

The Bill - which will have its third reading in the House of Lords on 26 February before moving on to the House of Commons sometime in the spring - seeks to define unclaimed assets as broadly covering dormant accounts in banks / building societies where there has been no customer activity for fifteen years.

The Bill also seeks to establish a "reclaim fund" for customers to be set up, which will be authorised and regulated by the FSA (but so was Northern Rock) so that anyone who's account has been plundered who then wishes to reclaim the money can do so. But, in a politically invidious move to establish a path of least resistance and speed the flow of cash into the Exchequer, the Bill will allow banks to relinquish their existing liabilities to dormant account holders on condition that assets are transferred directly into the scheme.

It's an easy way out that, thankfully, some banks are refusing to take. A number of banks (most noticeably the Halifax), building societies and the British Bankers' Association have been keen to reunite savers and depositors with their forgotten cash before they're compelled by law to hand that money to the Government. Nonetheless, banks aren't completely blameless in all this.

One argument runs that money in dormant accounts fattens banks' balance sheets and, other than a cursory letter to the account holder's last known address, banks have absolutely no incentive to track down the money's rightful owner. The new Bill means banks will lose the cash anyway; so perhaps reuniting savers with lost cash could be seen as the banks making a choice between the lesser of two evils and looking like consumer champions at the same time.

So if you want to discover if any of the money in dormant accounts has your - on a member of your family's - name on it, how do you go about it? And why should there be money loitering in an account you know nothing about? How can you lose an investment?

Savers and investors lose track of their assets for a number of reasons. One in six people who move house forget to notify companies of their new address, according to National Savings. Others invest without telling their spouse or next of kin, who has no idea what to look for when they die. Or they forget to claim on, say, a with-profits policy, or get confused when a company changes its name. In some cases, paperwork goes missing through simple carelessness.

Want to track your investments? Moneyextra's free portfolio service has all the tools you need.

How to make sure you get the money (and they don't)

The money is yours (or your family's), not the bank's, so if you can track down the relevant deeds and documents, account pass books, it's yours on positive proof of your identity. If you can't find them tucked away in your attic or the back of a drawer, you'll find a number of agencies and regulatory bodies who can help. Some charge a fee, some don't.

If you know the bank or building society where the account is held, have all the relevant documentation (including, if the account holder is deceased, the death certificate and either Grant of Probate or letter from the an executor of the dead person's will), then just turn up at the branch and stake your claim.

05 February 2008 © Moneyextra.com

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