£880 Million in Lost Investments to Fund Charities, But Don’t Panic Yet
The Financial Conduct Authority (FCA) has announced new rules to expand the Dormant Assets Scheme, unlocking an estimated £880 million from forgotten investment accounts to benefit charities across the UK.
“This is set to provide a £880 million boost for good causes, using money that would otherwise just be languishing in forgotten investment accounts,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.
The scheme, launched in 2011, initially focused on dormant bank and building society accounts. It has since expanded to include insurance and pensions, and now investment assets and client money.
Hargreaves Lansdown
However, Coles acknowledged that this news might cause concern for some investors. “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,” she reassured.
For example, 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,” she says.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, wants to help prevent assets from going astray in the first place, highlighting the issue of lost pensions. She noted recent government initiatives aimed at consolidating lost pensions and making them easier to find.
The FCA has published the results of its consultation and new rules, detailing how the scheme will be expanded. It also provides guidance on tracking down lost assets, including Child Trust Funds, Premium Bonds, savings, investments, and pensions.
While the scheme offers a significant boost to charities, experts recommend consolidating accounts to make them easier to manage and keep track of.
“Do consider bringing your investments onto a single platform, so you can keep track of performance and manage them more easily,” Coles advised.
Morrissey added, “Do try to bring together as many pensions as makes sense for you. This won’t just cut down on the amount of admin you need to keep on top of, and help you see whether you’re on track for retirement, it also gives you a single overarching view of your investments.”
The expansion of the Dormant Assets Scheme is a welcome development for charities, but it also serves as a reminder for individuals to take proactive steps in managing their finances and ensuring their assets don’t become lost or forgotten.
Top tip
Don’t close an account you’ve had for years just before applying for credit. Banks like to see long-standing relationships, and while your credit record will recover fairly quickly from moving into a new account, you don’t want to do this at the wrong moment.
Sarah Coles
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