Overview

The Dormant Assets Bill expands the existing scheme for handling dormant assets (like forgotten bank accounts) to include various other financial products such as long-term insurance policies, pensions, investments, and securities. It aims to make more unclaimed money available for social and environmental projects while ensuring rightful owners can still access their funds.

Description

This bill significantly expands the dormant assets scheme. It encompasses:

• Long-term insurance assets: Unclaimed proceeds from long-term insurance policies (excluding with-profits, industrial assurance, and trust-based policies) after a 7-year dormancy period.
• Pension assets: Unclaimed pension benefits, after a 7-year dormancy period. Specific conditions apply to different types of pension schemes.
• Investment assets: Unclaimed amounts from collective scheme investments (e.g., shares in OEICs, unit trusts) after a 6-12 year dormancy period depending on the type of asset.
• Client money assets: Unclaimed client money held by investment institutions after a 6-year dormancy period.
• Securities assets: Unclaimed proceeds or distributions from shares in publicly traded companies registered in an individual's name, after a 12-year dormancy period.

The bill also allows for the government to add more types of dormant assets in the future. It introduces provisions for returning surplus assets from a separate scheme for smaller banks and building societies to those institutions for distribution to eligible charities. The bill also clarifies third-party rights and sets out arrangements between institutions and the reclaim fund, which manages the dormant assets.

Government Spending

The bill itself doesn't directly involve government spending. Instead, it aims to generate income through the transfer of dormant assets to a reclaim fund, which is then distributed for social and environmental purposes. No specific figures for expected income are provided in the bill text.

Groups Affected

• Financial institutions: Banks, building societies, insurance companies, pension providers, and investment firms will be responsible for identifying and transferring dormant assets to the reclaim fund. This will involve additional administrative burden.
• Individuals with dormant assets: Individuals with unclaimed money in the specified assets may lose access to their funds after the dormancy periods. The bill outlines certain provisions to give claimants a chance to claim what is rightfully theirs.
• Charities and social enterprises: These groups stand to benefit from the distribution of funds from the reclaim fund for social and environmental purposes.
• HMRC: HMRC will be affected concerning the transfer of assets held within Lifetime ISAs.

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