'Lost' UK assets stand at £20bn. And some of that may belong to you

Think you could have some cash idling in long-forgotten accounts? Esther Shaw looks at how to track it down

Any idea that we could forget about our own hard-earned cash and leave it idling in long-neglected accounts seems preposterous.

Yet figures suggest that the British financial services industry holds nearly £20bn of unclaimed assets in bank and building society savings accounts, pension funds, endowment policies and shares.

This money is "dormant" - lying in accounts not used for several years - and mainly belongs to people who have either forgotten about it or who have died.

Leave a job after a couple of years, and it's easy enough to lose track of a small pension pot built up while you were there.

Alternatively, an inheritance that let you pay off an endowment mortgage early could easily mean that you forget about the original savings plan.

Even a simple change of address can precipitate financial amnesia, according to recent research from National Savings & Investments (NS&I). More than a quarter of people who have moved home in the past 12 months have forgotten to tell their bank, it found.

On a sadder note, parents might have set up a savings plan for their children but then died suddenly without having the chance to tell them.

But whether forgetfulness or ignorance is the reason, these unclaimed or "orphan" assets are yours by right, and you should be able to claim the money back - no matter how long it takes.

The problem is that banks and other financial institutions have had little incentive to set about finding the rightful owners; the onus has long been on the individual. As a result, accusations that the industry is sitting on "lost" cash to boost its own profits have regularly been levelled.

But all this is about to change. In just a few weeks, the Treasury will outline its plans for unclaimed assets, probably ahead of the pre-Budget report later this year. It is expected that Chancellor Gordon Brown will announce a method for making unclaimed money in dormant accounts available for use by charities and other good causes.

This proposal was first mooted in the 2004 Budget and built on in this year's announcement, when Mr Brown said that more should be done to reunite assets with their owners. Where this could not be achieved, he added, the assets should be "reinvested in society, as long as the owners' entitlements to reclaim are preserved".

This year's Budget also flagged a potential national register listing the names on all dormant accounts.

There is much public support for this, according to a recent survey from the Unclaimed Assets Register (UAR), which maintains a database of life policies, pensions, unit trust holdings and share dividends. Some 85 per cent of respondents said they thought the money should be made available for worthwhile causes, as long as the true owners could still reclaim their cash.

Unsurprisingly, banks and building societies have dug their heels in at the thought of a scheme that forces them to hand over the money.

"We are in ongoing discussions with the Treasury and there are still many issues to be worked out," says Rachel Le Brocq from the Building Societies Association (BSA).

The British Bankers' Association (BBA) says it has also been wrestling with the Government over key practical issues such as how to transfer money without breaking tax rules.

One obstacle has been defining what actually constitutes an unclaimed asset, says BBA spokesman Brian Capon. How long, for example, will an account need to be inactive before it is deemed "dormant"?

There are concerns Mr Brown will target accounts that have been dormant for as few as three years.

"This is a worry for us," adds Ms Le Brocq. "Many people deposit money in a building society account for the long term for safe-keeping. We want a longer cut-off period."

This view is shared by the public, according to the UAR: 36 per cent of respondents favoured 10 years of inactivity before the cash went to charity.

While discussions with the Government continue, there are steps you can take to find "lost" assets.

Your first port of call should be one of the free tracing services available.

Four years ago, the BBA established a Dormant Accounts Unit for the banking industry, while the BSA set up a tracing scheme in which all building societies participate.

NS&I, which runs premium bonds and many Post Office accounts, also launched a free tracing service in 2001. It reunited 6,300 people with more than £8m of savings and investments last year alone. It says the amount of unclaimed premium bond prize money stands at £25m - with prizes ranging from £25 to £25,000.

To track down an old pension plan for free, contact the Pension Schemes Registry. The Association of British Insurers and the Financial Services Authority will help you trace unclaimed policies without charge.

And, for an £18 fee, the UAR will help you recover forgotten savings and investments.

Funds Reunited is another tracing organisation. Fees start at £15.

Contact: www.bba.org.uk; www.bsa.org.uk; www.nsandi.com; www.thepensionservice.gov.uk; www.abi.org.uk; www.uar.co.uk; www.fundsreunited.com