The UK government has today launched a public consultation on the proposed expansion of the dormant assets scheme. The consultation aims to gather views on the Government’s proposals around the inclusion and definition of new asset classes to the scheme*.
Reuniting assets with their original owners remains a priority for all industry sectors. Together with industry sector-specific tracing, verification and reunification efforts – the proposed expanded scheme would provide the added security that consumers will always be able to reclaim the value of their assets, as if they had never been transferred into the scheme. These proposals should ensure that consumers are never disadvantaged.
Kirsty Cooper, Group general counsel and company secretary at Aviva, and the Dormant Asset Scheme's Industry Champion for Insurance and Pensions said:
“An expanded dormant assets scheme with new asset classes and greater industry participation would be a powerful force for good, both in enhancing the number of customers who are reunited with their assets and in supporting good causes.
“The other industry champions and I urge firms to respond positively to the government consultation. The current scheme has proved very successful and expanding it should provide vital benefits across the UK whilst preserving the rights of consumers.”
The proposed new asset classes include specific categories of investment and wealth management, security, insurance and potentially pension products. It builds on the existing successful scheme, facilitated by Reclaim Fund Ltd. The existing scheme has received £1.2bn from participating banks and building societies. To date, over £600m has been made available to good causes across the UK, supporting some of the most vulnerable members of our society.
- In England, Big Society Capital has used £425m of dormant accounts money to attract significant co-investment, and made over £1bn available for charities and social enterprises that are addressing entrenched social challenges
- £145m has been allocated to two new independent organisations, Fair4All Finance and the Youth Futures Foundation, to tackle the issues of financial exclusion and youth unemployment
- In Wales, £28m has been allocated to youth projects providing training, education and employment services, and supporting projects relating to climate change
- In Scotland, £49m has been allocated, with Young Start awarding £29.5m to 693 projects that seek to provide education and employment training opportunities for those in rural communities
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Reclaim Fund Ltd
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The Dormant Assets Scheme
The Dormant Bank and Building Society Accounts Act 2008 allows banks and building societies to transfer money from dormant accounts to Reclaim Fund Ltd which receives transfers from participating firms. It holds sufficiently large reserves to meet potential future reclaims and distributes a suitable surplus to The National Lottery Community Fund (TNLCF, formerly the Big Lottery Fund). Money transferred to TNLCF is then apportioned among England, Scotland, Wales and Northern Ireland and each nation directs how the funds should be cascaded to good causes. In 2017, the independent Commission on Dormant Assets recommended that a wider range of assets be included in the scheme.
Following the Government’s response in 2018 to the Commission’s report, four senior industry champions were asked to lead the development of recommendations for an expanded scheme. Their 2019 report set out an industry blueprint for expansion across the banking, insurance and pensions, securities, and investment and wealth management sectors. It also concluded that primary legislation would be needed to expand the scheme.
The government has considered these recommendations and is now launching an eight-week public consultation in order to gather a wider set of views on the proposed approach to expanding the scheme.
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Notes to editors:
- Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
- Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.
- We operate through five business divisions: Investments, Savings & Retirement; UK Life; General Insurance; Europe Life; and Asia Life; and focus on three strategic priorities: deliver great customer outcomes, excel at the fundamentals and invest in sustainable growth.
- Total group assets under management at Aviva group are £510 billion and our Solvency II capital surplus is £12.6 billion (FY19). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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