It’s because investment assets have been added to the list of funds that will support good causes if they have not been claimed.
This is applicable to both ISA investors and general investment account holders. The expansion also applies to client money, which is money received as a client or trustee, that can be unlocked for social enterprises and charities.
It is part of an expansion of the dormant assets scheme first backed by the Government in 2011, which was previously expanded in 2022 to include a range of pension and insurance assets.
These included income drawdowns, savings endowments and investment bonds.
Following its latest expansion being announced by the Financial Conduct Authority (FCA), an estimated £880m will be unlocked and distributed to a range of social and environmental initiatives.
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Almost £750m given to charities since 2011
Since 2011, the scheme has allowed more than £745m to be distributed to those initiatives out of a total of over £1.35bn in dormant bank and building society accounts.
The regulator noted: “Our proposals should result in an increase of funds being released to support good causes from investment assets and client money assets that are transferred to the dormant asset scheme [DAS].
“At the same time, our proposals should enable customers who have a right to reclaim dormant assets to do so without delay or difficulty, thereby securing an appropriate degree of protection for consumers.”
The first aim of the scheme is to reunite customers of their funds in the first instance, and to be considered dormant, the assets must meet a set of requirements.
A bank or building society account will be considered dormant when there’s no activity or contact for 15 years and where the financial institution’s efforts to trace and reunite the owner with their account or other financial products have been unsuccessful.
When this is the case, the money is transferred to the reclaim fund (RFL), which distributes the cash to The National Lottery Community Fund.
Money is then made available for good causes in England, Scotland, Wales and Northern Ireland via four dormant assets spend organisations: Big Society Capital, Access – the Foundation for Social Investment, Fair4All Finance and Youth Futures Foundation.
However, investments are considered dormant after 12 years, and distributions after six.
Also, any charges like trading fees with your investments will accrue as usual, and values won’t be based on a sale, if you reclaim your account you’ll be entitled to the assets as they are.
In 2022, the dormant assets scheme was expanded to facilitate the inclusion of dormant assets from the following new sectors:
- Insurance
- Pensions
- Securities
- Investment assets
- Client money, or money held or received as a client or as a trustee
Last June, Aviva joined over 40 banks and building societies in agreeing to the voluntary scheme once it was expanded to the pension and insurance sectors.
The guidelines for pensions vary versus other finances, as the funds can be released once the customer is deceased and it’s confirmed they had no next of kin.
Alternatively, it can be seven years after the customer’s death and there is no ongoing contact with whoever is managing the estate.
Or, if it is seven years after the end of the contractual term and there’s no communication with the owner.
Following the dormant assets scheme’s inclusion of investments, Sarah Coles, head of personal finance at Hargreaves Lansdown, praised the boost it will give to charities but urged investors not to lose money that’s rightfully theirs.
Coles said: “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.”
How to track lost assets
The asset management firm provided some tips on how to track your lost assets.
Child Trust Funds
As long as you have parental responsibility for the child, you can track this using the Government website.
Premium Bonds
Head to the NS&I website and check if there’s anything outstanding, but the best way to avoid missing any wins in future is to have them paid directly into your bank account.
Lost savings and investments
Contact the business directly, if you have its details, and ask. You will need to prove your identity before it can track down your account.
Failing that, you can use the My Lost Account website, and it takes up to 90 days for all the firms to get back to you. Once you have their details, you can contact them directly.
Lost pensions
With workplace pensions, you’ll need the name of the employer or the scheme and 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 find any paperwork, try the Government’s Pension Tracing Service.
