There could be up to £200bn lying dormant in UK banks which could be used for good causes if not claimed, according to calculations by an expert in unclaimed assets.
Bruce Cane, director of Monimine, which reunites individuals with their unclaimed assets, said the money could have an immense impact on the charity sector if it were redistributed.
Cane calculated his figure from the Commission on Dormant Assets’ estimation in its 2017 report that the UK’s insurance and long-term savings industry manages investments worth £1.9 trillion.
According to the Financial Conduct Authority’s Thematic Review 16/2, published in 2016, up to 20 per cent of customers in the life and pensions market are “gone away”, meaning their bank has lost contact with them.
Therefore, Cane estimated that just over 10 per cent of the £1.9tn investments could be missing, giving a figure of around £200bn.
"Gone away" accounts contain unclaimed money which is owed to customers, but the financial institution has been unable to contact that individual.
This could be due to an unreported change of address, a name change, institutions merging or inadequate record keeping.
However, under the laws of the Dormant Bank & Building Societies Act 2008, dormant assets can only be redistributed for charity and the Big Lottery Fund after a dormancy period of at least 15 years.
Cane said that ideally the original owners of the money would be found, but this is not always possible.
He said: “When a death has occurred, and no will can be located, the assets will be paid out to charities from the financial institutions. Similarly, if after exhaustive tracing methods have been employed and no owner, or beneficiary can be found, the next step is to use the funds for charitable purposes.
“Large scale ambiguity surrounds the industry, but the lid needs to be lifted on the undefined figures. The impact that unclaimed money could have on the UK’s charity sector could be immense and would inevitably make a positive impact on our nation’s vulnerable.
“There are methods of tracing personal dormant funds but there will always be a sizeable percentage of orphan assets which have no home. This is the money that will make a difference.”
The Dormant Assets Commission itself said in its 2017 report that around £2bn in unclaimed assets currently exists, including more than £700m in the investment and wealth management sector and £550m in the pensions and insurance sectors.
The government announced in January that it would spend £330m raised from dormant accounts to help good causes over the next four years.