Charity Windfall – £880m of lost investments go to g…

The Financial Conduct Authority has published rules for adding investments to the dormant assets scheme – and it says this should mean another £880m freed up from lost accounts for charities.

The dormant assets scheme started in 2011 by freeing up money from dormant bank and building society accounts. Hundreds of millions of pounds have been given to good causes since then.

In August 2022 the scheme was expanded to include insurance and pensions and in future it will be expanded to investment assets and client money.

Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, says the money now going to good causes would otherwise just be languishing in forgotten investment accounts. 

But will some investors worry about losing money that’s rightfully theirs?

Coles says: “The good news is that even if you have assets that are scooped up by the scheme, you will still always have the right to get your money back at any time. If the owner of the investments has passed away, their family will always be able to reclaim it on their behalf. However, this money is no use to you if it’s stuck in lost accounts, so you need to take steps to track it down.

“However, the real solution is to prevent them going astray in the first place. The lost pension problem, for example, is huge, with an estimated 2.8 million of them in the system.

“Recent government moves are already aiming to put a lid on the lost pot problem, with plans announced to develop a system whereby lost pensions are consolidated in one place making them easier to find. This could be further contained if the government looks to take forward the Lifetime Pension proposals, which will give people the power to nominate which provider will receive their contributions and could in theory mean they only have one pension throughout their career.”

Lansdown Hargreaves also gives investors tips on how to track down lost assets:

Child Trust Funds

You can track down your CTF through the government website – as long as you have parental responsibility for the child. Once you’ve been reunited with your CTF, you should consider transferring the money to a Junior ISA. Cash JISAs tend to offer higher interest rates, while investment JISAs may have wider investment choices and some are available without charges

Premium Bonds

Enter your bond number on the NS&I website to see if there’s anything outstanding. The best way to avoid missing any prizes in future is to have them paid directly into your bank account.

Lost savings and investments

If you know the business you held money with, contact them direct and ask. They will need you to prove your identity, but then will be able to track down your account. If you’re not sure where your accounts are, you can try the My Lost Account website. It’ll take up to 90 days for all the institutions to get back to you, and then you need to contact them direct.

Lost pensions

With workplace pensions, you’ll need the name of the employer or the scheme, plus the dates you worked there. Once you have a phone number or address, get in touch and ask for contact details of the administrator. For personal pensions, try to dig out any old paperwork to give you an idea of where your money is held. If you can’t

The FCA has published the result of its consultation on the change to the dormant assets scheme and the new rules: PS24/10: Expansion of the Dormant Assets Scheme – second phase (fca.org.uk)