A force for good at a time of crisis
When the UK government launched the public consultation on the proposed expansion of the dormant assets scheme back in February, I’m not sure I or any of my fellow industry champions could have predicted what was coming around the corner. The coronavirus pandemic has brought about fundamental changes to the lives of many.
On the face of it, the expansion of the dormant assets scheme might seem relatively trivial given the scale of the crisis. However, reuniting assets with their original owners and expanding the scheme to increase the funds available to good causes has never been more important. Especially when so many individuals and charitable organisations are facing such hardship.
The current dormant assets scheme distributes funds to good causes from bank and building society accounts - where the customer is no longer contactable, and the account has remained untouched for 15 years. Over £745 million 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, Young Start has awarded £29.5m to 693 projects that seek to provide education and employment training opportunities for those in rural communities.
We should be proud of this contribution to society. But there is more which can be done.
I’ve been working with the Government and the financial services industry since 2016 to expand the existing scheme to include insurance and pensions assets. The proposed new asset classes include specific categories of investment and wealth management, security, insurance and potentially pension products. Further expansion of the assets available to the scheme would undoubtedly provide a considerable boost to good causes.
Through the pandemic, Government extended the deadline for responses to its public consultation. That deadline is looming, and financial services organisations only have until 16 of July 2020 to respond. Having recently discussed the proposals with the Association of British Insurers, there appears to be tremendous amount of support building for the expansion.
As with the current scheme, the proposed expanded scheme would provide 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.
Reunification is central to the scheme – this lies at its heart and is an industry priority.
The other industry champions and I would urge our industry colleagues to act now and respond positively to the government consultation. The current scheme has proved very successful and expanding it should provide vital benefits for those most in need at what is, arguably, the time of most need.
Kirsty Cooper, Group General Counsel and Company Secretary at Aviva (Insurance and Pensions Champion)