Up to £2bn of unclaimed assets currently lying dormant in the financial sector has the potential to “transform the charity sector”, the government said today.
The comments follow the publication of the final report of the Independent Dormant Assets Commission, set up by the minister for civil society in December 2015.
In 2008 the government passed the Dormant Bank and Building Society Accounts Act, which gave it the power to pass on to good causes any money held in an account which has not been used for 15 years. Almost £1bn has so far been passed by banks to a Reclaim Fund set up to redistribute the cash – far more than was originally anticipated.
The latest commission’s role was to identify the level of similar funding available in other financial resources.
Its final report, Tackling dormant assets: recommendations to benefit investors and society, says that around £2bn exists, including more than £700m currently stored in dormant assets in the investment and wealth management sector, and another £550m in the pensions and insurance sectors.Read the full report here
Over £1bn likely to make its way to good causes
The report says that much of this money may eventually be reunited with its rightful owners, but that over £1bn is likely to make its way to good causes.
The government has said it intends to use this money to “deliver lasting change to the way voluntary and charity sectors are funded” although there are no details about who might receive the money or how it might be spent.
A statement released by the Office for Civil Society today said that this “huge sum has the potential to further transform the charity sector, helping to improve communities and change lives”.
It said that ministers will now consider the report’s finding in detail and consider how to allocate the money.
The first £400m of funding from the first round of dormant accounts will go to social investment wholesaler Big Society Capital, but it appears no decision has been made about further funding.
'Could change millions of lives'
Rob Wilson, the minister for civil society, said: “This money could help change millions of lives across the country by helping good causes rather than gathering dust in dormant accounts.
“The reason I set up the commission was to unearth new resources that would allow our charities and voluntary groups to become more sustainable and independent. But crucially also to deliver really important local services over the long term.
“This is an example of an active government stepping in where it can make things better to the benefit of local communities and all concerned.”
“I’d like to thank the commission which has worked tirelessly with the financial services sector on this report, and will study its findings closely.”
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Nick O’Donohoe, chair of the commission, said: “The commission believes that there may be up to two billion pounds worth of assets lying dormant across a number of financial industries and products.
“With the support of the financial services sector we believe it is possible to reunite many of these assets with their owners and, where this is not possible, to free up substantial incremental funds for good causes in the UK.”