The pounds 12bn mountain investors forgot

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The Independent Online
Investors in UK companies have lost track of a huge pounds 12bn in unclaimed flotation benefits they may be entitled to. The unclaimed benefits include share certificates and dividend payments, in addition to very recent rights issues which individuals might have passed on.

In many instances, company registrars are unable to trace individual shareholders when rights issues are sold at a premium and held until they are claimed, according to a report published yesterday by Mintel, the research organisation.

The unclaimed benefits form part of a pounds 77bn total of forgotten funds, which include pounds 14bn in dormant and obsolete accounts, pounds 1.6bn National Savings on extension rates and pounds 2bn of life assurance policies put on deposit when they mature. A further large area of lost benefits concerns up to pounds 10bn in company pension payments, which individuals miss out on because they are not prepared to join and contribute a smaller amount themselves.

Robert Browne-Clayton, chief executive at IFA Promotion, which promotes independent financial advice and commissioned the research, said that while much of the money would be hard to access, some deposits could be used almost immediately.

"Taking extra care of our existing money and savings can certainly free up cash to help us in the future, savings that could be used to boost future income," he said.

The Mintel research was carried out by Paul Hersey, a senior financial analyst. He said yesterday that he had spoken to more than 150 people in the course of preparing his report, including both large and small publicly quoted companies.

"In some cases, I could not arrive at the exact figures and tended to underestimate," he said. "In other cases, I came pretty close."

Mr Hersey said, however, he had not been able to work out the extent of capital gains tax liabilities that might be incurred by individuals who had not taken up their entitlements.

The total capitalisation of UK quoted companies runs into many hundreds of billions of pounds. Experts believe the amount unclaimed by shareholders can average up to 2 or 3 per cent of a company's market capitalisation in many instances.

Forgotten funds include money people have lost track of, such as bank and building society deposits. Many forgotten funds may entitle a policyholder to flotation benefits when a building society converts to bank status next year.

Unclaimed cash includes company benefits, premium bonds and National Lottery prizes. Some pounds 54bn is in forgotten funds, while pounds 22bn is in unclaimed cash. Mintel's research found that Londoners are the worst money managers in the UK, having lost track of up to pounds 2,000 each, of which almost pounds 600 was unclaimed cash. This compares with an average of pounds 1,700 nationwide and pounds 1,400 for residents in the West Midlands.

Regional breakdown

Region Forgotten Unclaimed Total

funds cash

pounds m pounds m pounds m

South East 14,816 6,010 20,000

Greater London 8,231 3,339 11,000

Midlands 7,682 3,116 10,000

South West/Wales 6,585 2,671 8,000

North West 5,488 2,226 7,000

North East 4,939 2,003 6,000

Scotland 4,939 2,003 6,000

Yorkshire 2,744 1,113 3,000

Total 54,876 22,260 77,000

Totals may not agree due to rounding

The money nobody wants

Forgotten Funds pounds m

Deposits in dormant or obsolete accounts 41,000

National Savings on exertion rates 1,612

Pensions lost track of 333

Old notes and coins 5

Unclaimed flotation benefits (shares) 10,000

Stocks and shares 1,326

Unit trusts 452

Life Assurance 108

Friendly Societies 40

Total 54,876

Unclaimed Cash pounds m

Unclaimed flotation benefits (divedends) 12,000

Unused company benefits 10,000

Income Tax 221

Premium bonds 14

National Lottery 24

Bookmakers unclaimed prizes 1

Total 22,260