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The UK government will redirect £76m sitting in forgotten bank accounts across England to support people in getting out of debt and to help with energy-saving initiatives.
The government will use the Dormant Assets Scheme (DAS) to unlock money that cannot be reunited with its owners. The cash will support people to get out of debt and assist social enterprises with innovative energy-saving solutions.
The DAS will initially release £76m tied up in forgotten bank and building society accounts. Later in the year, the government is expected to unlock an additional £738m from insurance, pensions, investment and wealth management products that have been left unclaimed.
The funds will provide no-interest loans for 69,000 individuals struggling with finances via a £45m grant distributed by Fair4All Finance.
Another £31m will be distributed by social investors Access and Big Society Capital and distributed to hundreds of charities, with the goal of retrofitting their buildings to use cleaner, greener and more efficient energy systems, such as new boilers or heat pumps, solar panels and new lighting.
“Today, we are announcing that millions of pounds will be redirected from dormant accounts to help the most vulnerable in society deal with the cost of living,” said culture secretary Lucy Frazer.
“This will have a real impact on people’s lives, help alleviate debt and provide money-saving solutions for charitable organisations.”
Dormant assets are financial assets left untouched for long periods. When it is impossible to reunite them with their owners, the monies can be distributed to fund important social and environmental initiatives.
Since 2011, £892m has been released via the scheme and used to support young people, to help those in financial difficulty and to generate social investment.
As part of the announcement, the government also revealed that community wealth funds will become an additional beneficiary of the DAS, giving local residents the right to decide how the funds are spent.
“The creation of a community wealth fund will give local residents in some of the more deprived areas of the country the power to improve where they live and invest in what’s important to them,” said Stuart Andrew, minister at the Department for Social, Media and Sport.
David Knott, chief executive at the National Lottery Community Fund, said: “As the distributor of dormant assets, The National Lottery Community Fund sees first-hand the life-changing difference this funding makes.
“I welcome the government’s plans to include community wealth funds alongside existing causes. This reflects The National Lottery Community Fund’s experience of funding and supporting communities over decades. I look forward to turbocharging efforts through this expansion.”
Sir Ronald Cohen, co-founder of Big Society Capital, added: “Unclaimed assets is public money; it doesn’t belong to the banks or insurers, even though it sits on their balance sheet.”
Some of the projects that have received funds from DAS in the past include the Greater Manchester Homes Partnership, which has housed 355 homeless people with support from Big Society Capital, and Homebaked, a co-operative bakery and community land trust in Liverpool.
Owners of the forgotten funds can reclaim the money owed to them at any time, if they can prove ownership.
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