Britons have been issued a savings warning as £880million worth of lost investments is set to be handed to charity.
These investments, which the Financial Conduct Authority (FCA) plans to add to the dormant assets scheme, include forgotten savings accounts and pensions, which many Britons may not realise they still have.
The dormant assets scheme started in 2011 by freeing up money from dormant bank and building society accounts. Subsequently, hundreds of millions of pounds have been given to charity.
In August 2022, the scheme was expanded to include insurance and pensions. It’s set to be expanded again to include investment assets and client money.
While the money will be handed to good causes, Britons may wish to reclaim the money that’s rightfully theirs.
Sarah Coles, head of personal finance at Hargreaves Lansdown commented: “This is set to provide a £880million boost for good causes, using money that would otherwise just be languishing in forgotten investment accounts.
“However, it may spark panic among some investors – worried about losing money that’s rightfully theirs.”
Ms Coles said the “good news” is that even if people have assets that are scooped up by the scheme, they will still always have the right to get their money back at any time.
She continued: “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 of no use to you if it’s stuck in lost accounts, so you need to take steps to track it down.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown added: “The expansion of the dormant assets scheme means these unclaimed assets can be put to good use in helping fund social and environmental causes. However, the real solution is to prevent them from going astray in the first place.
“The lost pension problem, for example, is huge, with an estimated 2.8 million of them in the system.”
Tracking down lost savings and pensions assets
Child Trust Funds
HMRC estimates hundreds of thousands of young people could be owed an average of £2,000 from forgotten Child Trust Funds (CTF).
Child Trust Funds are long-term, tax-free savings accounts. The Government set them up for every child born between September 1, 2002, and January 2, 2011, and contributed an initial deposit of at least £250. Funds can be withdrawn once the account matures when the child turns 18.
Individuals can directly contact their account provider to access their Child Trust Fund savings. If uncertain about the provider, they can reach out to HMRC, which can provide information on where the account was originally opened.
HMRC also offers a free tool to help locate a Child Trust Fund. This tool is available for parents or guardians of children under 18, as well as individuals aged 16 and over looking to find their own trust fund.
There are currently 2,433,843 Premium Bonds prizes worth £86,076,800 waiting to be claimed.
To track any lost prizes down, people can enter their bond number on the NS&I website to see if anything is outstanding. NS&I said the best way to avoid missing any prizes in future is to have them paid directly into bank accounts.
Lost savings and investments
If people know the business they held money with, Hargreaves Lansdown suggests contacting them directly to ask. People will need to prove their identity before tracking down the account.
Hargreaves Lansdown said: “If you’re not sure where your accounts are, you can try the My Lost Account website. It’ll take up to 90 days for all the institutions to get back to you, and then you need to contact them directly.”
Lost pensions
With workplace pensions, people will need the name of the employer or the scheme, plus the dates they worked there. Once a phone number or address has been sourced, people can then get in touch and ask for the contact details of the administrator.
For personal pensions, Hargreaves Lansdown suggests digging out any old paperwork to for an idea of where their money is held. If the paperwork cannot be found, try the Government’s Pension Tracing Service.
