By expanding a program for distributing dormant financial assets to investment accounts, about £880 million could potentially be unlocked for charities and social ventures, the U.K.’s Financial Conduct Authority (FCA) says.
The regulator announced the expansion of the dormant assets scheme, which has generated £745 million for social and environmental initiatives from the estimated £1.35 billion in unused bank accounts, to investment assets and client money (distributions, redemptions and client cash).
The FCA said the industry-led, government-backed scheme aims first to reunite people with their financial assets. Bank accounts are considered dormant when they’ve remained untouched for 15 years, and the original owner can’t be located. In cases where it’s not possible to find the rightful owner, the scheme provides funding for social causes.
The U.K. government has estimated £3.7 billion in assets lies dormant in the insurance, pension, wealth management and securities sectors, and that £2 billion of this can be returned to the rightful owners through enhanced tracing. That leaves £1.7 billion to be potentially directed to the dormant assets scheme, with about half of that total potentially available for charities and social causes.
“Our proposals should result in an increase of funds being released to support good causes from investment assets and client money assets,” the FCA said in a policy statement outlining the expansion.
“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,” it said.