The ones that get away

Thousands of us remember to collect our Lottery winnings each week, but forget to claim free shares worth millions.

MILLIONS OF pounds of Premium Bond prizes go unclaimed every year because the holders have disappeared, died or simply moved house without notifying the National Savings register by the time Ernie got round to remembering them. There are a few big National Lottery winners who have failed to claim their prizes for reasons we can only speculate about.

But much larger sums apparently routinely go unclaimed because insurance policy-holders cannot be traced. This week Colonial Mutual, the Australian- based insurance company, revealed that 60,000 of its 370,000 policy-holders in the UK have failed to claim free shares worth on average pounds 900 to which they are entitled as a result of Colonial converting into a public company last year. "We have been to great lengths to locate our missing shareholders and are disappointed that such a large number have not been found," Colonial's head of legal services Jacqui Bamford said.

About a third of the missing policy-holders have moved and are untraceable. A mail-out campaign and a call centre are being set up in the new year in an effort to trace the rest. The number of unclaimed windfalls is surprising because millions of Britons have woken up to the possibility of windfalls from building societies converting into banks. But insurance policies are much easier to lose track of because, by definition, they are very long-term investments where claims are only activated when the policy- holder dies or retires. Many holders will have died without leaving the actual policies where they can be found or telling family and friends what policies they have bought.

Coincidentally another insurance company, Cornhill Life, has called this week for the establishment by the Association of British Insurers or the Financial Services Authority of a national register of unclaimed policies to help insurance companies trace holders of an estimated pounds 250m worth of unclaimed policies. Research shows that 20 per cent of people with life policies have no idea when they mature, more than 10 per cent have not told their insurance companies that they have moved home, nearly 10 per cent have policies which are paid up and are no longer receiving contributions.

Astonishingly, it is not necessary for anyone taking out a life policy to nominate a next of kin, although Cornhill is changing its proposal forms to include a request for this information.

It sounds like a good time for all living insurance policy-holders to take elementary precautions, making sure that: policies are kept in a safe place; insurance companies are kept up-to-date about changes of address; and, if insurance companies have not asked for next of kin, then at least the intended beneficiaries know what they are entitled to if and when the policy-holder is no longer in a position to tell anyone.