Government announces Dormant Assets Scheme can support financial education and capability

The Culture Secretary, Lucy Frazer MP, announced on 7 March 2023 that the government will look at how the Dormant Assets Scheme can be used to support financial education and capability, according to TISA, an industry body that responded to the government's dormant assets consultation in late 2022¹. The same announcement confirmed £76 million has been allocated from the scheme to support people struggling with the cost of living through affordable credit¹.

TISA said the government's response to the consultation referred specifically to a roundtable hosted by the Centre for Financial Capability, which the Department for Culture, Media and Sport attended. TISA chief executive Carol Knight took part in that roundtable in September 2022, alongside other representatives from the financial services industry and the financial education sector¹. TISA said a number of written responses and roundtable attendees advocated financial education for primary school children, on the basis that early intervention builds financial skills, knowledge and confidence for adult life¹.

Nigel Banfield, technical policy implementation manager at TISA, said the organisation was pleased the government had listened to third sector providers, industry members and associations, and had committed to increasing financial understanding and education in the UK starting at a young age¹.

Separate figures published by Which? on 17 March 2023, citing the asset tracing service Gretel, estimated that around 20 million people could have forgotten money in lost bank accounts, savings accounts, pensions and investments, totalling £50bn². The breakdown by product was:

Source: Gretel, via Which?²

Which? reported that money held in dormant bank accounts, pensions, investments and life insurance policies is given to charitable causes under the Dormant Assets Scheme after 15 years, but that account holders can still reclaim their money after that point if they trace the account². The scheme has paid out £892m since 2011, according to Which?². Which? also reported that current accounts can be marked inactive after just a year, while the period is usually longer for savings accounts and varies between banks².

Why it matters for households

The £76 million allocation is already committed to affordable credit, including no-interest loans for almost 70,000 people and cash to improve energy efficiency, as reported by Which?². The financial education element is not yet funded: the government has said only that it will look at whether the scheme can support it, and no amount has been reported for that purpose¹. TISA said it expects a government statement of intent later in 2023, but no date has been reported¹.

For anyone with an old account, pension or policy, the practical position is unchanged by the announcement. Money can sit dormant for years and still be reclaimed, but the tracing process depends on providers and on services such as My Lost Account, which Which? said covers over 73 providers and completes bank and building society searches within three months². Which? noted there is no obligation for providers to list lost assets centrally, so searches for insurance policies and shares may require several different services². It also reported that some tracing services charge a fee, with no guarantee of finding anything².

What happens next

The government is expected to publish a statement of intent on the use of the Dormant Assets Scheme later in 2023, according to TISA¹. No date for that statement has been reported. The £76 million for affordable credit was announced earlier in March 2023¹.