Time to rescue old money from sleeping bank accounts

Wake up before your cash vanishes, say Alessia Horwich and Julian Knight

In a few months' time, money held in dormant savings accounts will be seized by the Government and distributed to good causes through the BIG Lottery Fund.

An account is deemed to be dormant if has seen no activity in the past 15 years. In other words, the provider has lost contact with the account holder and no money has been paid in or taken out. You might think there would be relatively few accounts that were deemed dormant but you'd be wrong. Of the 150 million bank and building society accounts in Britain, up to half a million may be dormant. The final date for transferring funds to the BIG Lottery Fund is yet to be confirmed but Treasury sources say it should be under way by the summer.

NS&I says it holds £452m in dormant accounts, and the Building Societies Association (BSA) puts the total in building societies at £115m. The British Bankers' Association (BBA) estimates there could be as much as £400m eligible for the transfer to good causes snoozing in banks.

But voices in the industry say the term "dormant" is woolly. It could mean no debits or credits or even no changes of personal details – which leads to imprecise figures. James Jones, a spokesman for the Unclaimed Assets Register, which reunites savers with their cash, says: "As far as dormant accounts are concerned, we're looking realistically at about £850m. If you include all other assets such as investment funds, which are also dormant, you could be talking several billion pounds."

Moving house is, in many cases, to blame, as paperwork disappears to the bottom of cardboard boxes. Accounts opened by relatives for children, unbeknownst to those children, are common. Sums also lie untouched when people die and the executor doesn't realise the account exists. In many cases, busy people simply forget about accounts. "Typically, a dormant account is just the remnants of savings where £50 or £60 has been left in a secondary account," says Patrik Karlsson, a spokesman for the BBA. "But it is not unusual for there to be several hundred thousand pounds in an account." The account may be in the name of a charity or club which may have closed or changed its treasurer.

Trade bodies and individual banks and building societies have launched schemes to reunite consumers with their cash. Halifax and Lloyds have reunited £32.8m with owners and say £79.5m remains unclaimed. Thus far, HSBC has returned £8.55m of more than £38.8m spread across 40,000 accounts. NS&I gave back £235m. If you want to track down a dormant account, then visit mylostaccount.org.uk, a joint effort from the BBA, BSA and NS&I that is free and easy to use. It can take several weeks to do the searches, and the site doesn't cover all banks.

Mylostaccount is complemented by the Unclaimed Assets Register (UAR), which searches for occupational pensions, investments, life insurance and other assets. Run by Experian, a credit agency, the UAR charges a one-off fee of £25. On average, one search in 20 is successful and the average find is £6,000. Some third-party firms also offer to track down missing cash. Some charge an upfront fee of between £20 and £200, depending on the amount of work involved, and others will search free of charge, but take a cut of any funds found. Some even have premium rate phone numbers. Generally, these services don't offer anything you couldn't get for free from mylostaccount.co.uk.

If your money has already been transferred out of a dormant account into the BIG Lottery Fund, the Government has set up a new fund to repay those who make a claim. "The reclaim fund sits between the financial services industry and the lottery fund," says Mr Chisnall, "so customers will always be able to reclaim their monies." The reclamation process is as yet undefined and banks remain unsure whether it will be laborious. The BBAsays it won't. "Now or later, it will make no difference," says Mr Chisnall. "The scheme will require no additional effort to get the money back." But many may prefer to get hold of their cash rather than deal with a new reclamation fund. What's more, money languishing in the bank is unlikely to be earning a good interest rate. The quicker you find it, the quicker you can put it to better use.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

    The 161-page dossier that exposes Fifa's dark heart

    How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
    Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

    Exclusive interview with Tripoli PM Khalifa al-Ghweil

    'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
    Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

    Raymond Chandler's Los Angeles

    How the author foretold the Californian water crisis
    Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

    Art attack

    Chinese artist who posted funny image of President Xi Jinping facing five years in prison
    Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

    Cher is the new face of Marc Jacobs

    Alexander Fury explains why designers are turning to august stars to front their lines
    Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

    'I'm climbing Ben Nevis for my daughter'

    Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
    10 best wedding gift ideas

    It's that time of year again... 10 best wedding gift ideas

    Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
    Paul Scholes column: With the Premier League over for another year, here are my end of season awards

    Paul Scholes column

    With the Premier League over for another year, here are my end of season awards
    Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

    Liverpool have seen too much tragedy to forget Heysel

    Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
    Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

    Khan’s audition for Mayweather may turn into a no-win situation

    The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor