Plans are underway to revamp a scheme where untouched UK assets that have lain dormant for more than 15 years can be donated to a charity called the Big Lottery Fund.
Currently, only banks and building societies can voluntarily take part in the scheme, but HM Treasury has published an industry-led report calling for it to be expanded to include shares and bonds, as well as insurance and pension schemes.
The commission was made up by Kirsty Cooper, group general counsel and company secretary at Aviva; Simon Kenyon, managing director of consumer banking at Lloyds Banking Group; William Nott, formerly chief executive of M&G; and Robert Welch, group secretary at Tesco.
Beneficiaries still at the core
The report said: “A founding principle of the dormant assets scheme is that customers should always be able to reclaim the amount that would have been due to them had a transfer into the scheme not occurred.
“Customer protection is at the heart of the scheme,” the commission added.
Alistair Cunningham, financial planning director at Wingate, told International Adviser: “I believe there are provisions that allow people to reclaim funds even after the soft deadline, but I would want to see custodians taking the maximum effort to trace investors before taking these measures otherwise it will be too easy to trouser assets unfairly.”
Commenting on the initiative, David Woollett, head of customer strategy and oversight at insurer Phoenix Group, said: “The report rightly identifies that the number one priority for any expanded scheme must be to ensure that policyholders, who have saved diligently over many years and trusted us with their money, are reunited with the proceeds of their investments.”
Need for inheritance planning
While the industry is trying to put unused funds into a vehicle that could help those in need, this highlights the importance of inheritance planning.
Rachael Griffin, financial planning expert at Quilter, told International Adviser earlier this year: “Our own research has found many people still see inheritance as a taboo subject with just 37% of people feeling comfortable talking to their friends or family about it.”
Although people are somewhat uncomfortable talking about death and inheritance, it is a conversation that needs to happen if they don’t want their assets lost to their families and loved ones.
Properties are easy to spot, but when it comes to investments – especially following the commission’s call to include them in the dormant asset scheme – inheritance planning would make sure that those assets go to the intended beneficiaries.
Big Lottery Fund
To date, over £1.2bn ($1.6bn, €1.4bn) has been transferred to the Reclaim Fund, a not-for-profit organisation authorised by the Financial Conduct Authority. It accepts the dormant asset in the first instance if the bank or building society cannot contact the beneficiary.
If the Reclaim Fund is then unsuccessful in contacting someone capable of claiming the asset the money is then transferred to the Big Lottery Fund.
Since it was set up in 2011, around £600m has been made available for good causes, with money going to community groups and health, education and environment projects.
