This piece first appeared in Saga Magazine in July 2001
The text here may not be identical to the published text

Sitting on a fortune


Billions of pounds lie in dormant bank and building society accounts

No-one knows how much money is languishing in banks and insurance companies unknown and unclaimed by its rightful owners. Industry estimates say it could be £15 billion – but insiders have told Saga Magazine it could be far more. The banks and building societies are so embarrassed at the amount of money they sit on – guess who keeps the interest – that they refuse to disclose the amount. Certainly the generally quoted estimate of £5 billion in dormant bank accounts is too small – one person in the business of tracing lost accounts told me it was a ‘guess’. Some have put the amount as high as £40 billion. In addition to that, there is £3 billion in unclaimed national savings contracts, £1 billion in life policies, an estimated £3 billion in pensions, and a probably a similar amount in unclaimed dividends on company shares.

Banks

Until recently the banks have done very little to assist people who wanted to track down old accounts. But in May this year they got together with the building societies to make it easier – as long as you can provide at least some information about the missing account and, of course, realise you have lost track of it. The first thing you need is the name in which it was opened – and remember it’s not just married women who change their name – other people can too. Second, you will need either an address, or at least a town or geographical area. But you do not have to remember which bank your money was in – though of course if you can it will be a lot easier.

The scheme is run by the British Bankers’ Association, on behalf of 45 banks which include almost all those in the UK which have personal customers. Of course, many banks have been taken over or gone out of business in the last fifty years but the Association has a list of all these changes and can check who now owns the bank you once used. Joanna Elson [one ‘l’ correct] is a Director at the BBA who runs the scheme.

"A dormant account is one where a bank and a customer lost track of each other, they move or they were a student and have forgotten about the account. To avoid sending out statements to the wrong address forever the bank will park the account. That is a dormant account. We hope this new service will be a one stop shop to finding them. The customer will fill out one claim form and we will circulate it around the 45 banks who are our members."

Banks have different definitions of what is ‘dormant’ for some it is a year with no activity, for others it is longer. Apart from small amounts we may have forgotten about ourselves, many claims arise when people die and the executors find an old pass book or papers or a relative remembers that there was an account held somewhere. The claim form is available from banks, Citizens’ Advice Bureaux, and in libraries. Or you can download a copy from the British Bankers' Association website which also contains a lot of useful information about dormant accounts and has a list of historic banks and who now owns them. The system is clearly a great advance on what happened previously. Until three years ago banks were very unhelpful in tracing accounts. But pressure from the press and public – not least after it was found that there was millions of pounds in accounts which had been frozen in World War II – brought about changes and this new scheme is the latest step in that process. But even now it is not really a one-stop shop.

First, there are separate schemes for banks and building societies. The Building Societies Association is running its own scheme with a different claim form and its own definitions of when an account becomes ‘dormant’. Some people who may not be sure what has happened to the building society they once joined – it could now be part of a bank – may end up applying to both, although both schemes are supposed to pass information on to each other. Second, many missing assets are not in bank or building society accounts – they are in insurance policies, pensions, prizes, dividends, windfalls and savings plans. To find those we have to look elsewhere.

Unclaimed assets

Some of these other missing millions are covered by a commercial organization called the Unclaimed Assets Register. It is run by an international insurance services group called AON and charges a fee of £15 to £25 to search out information about insurance policies or pensions which may have been misplaced or forgotten. Keith Hollender thought up the idea and is now its Managing Director

"The objective of the Unclaimed Assets Register is to pull together the vast amount of unclaimed money in thousands of institutions in the UK and make it easier to recover that money. Customers provide us with past names and addresses and complete a form and we will then do a search of those companies that participate in the register. We don’t hold any financial information, just the names and addresses on their files."

If a match is found, then the customer has to contact the financial company direct and pursue their claim. Although the amounts involved are often very small, Keith Hollender says they are always welcome.

"Sometimes it can be the result of a penny policy in the 1920s to cover funeral costs, on the other hand it could be £400-£500. The most was £36,000. But we have had cases where they got 92p back. Even though they have paid out £15 to find out people are not upset. They are relieved; they knew there was something there and as long as they find out what they are happy."

One customer, Steve Dawkins, was certainly happy with his search.

"I had a vague idea I had taken out an endowment mortgage in the 1980s but then I sold my house and forgot about it. But then I kept hearing about windfalls and I got curious about which company it was with. I wrote to Abbey National, who I had the mortgage with, but they would not trace it. They said all the records were manual. Then someone told me about the Unclaimed Assets Register and I found it on the internet and downloaded the form. I paid my £15 the search and within a few days it came up with my endowment which was with Standard Life. With interest it was worth nearly £1900 which was very nice. Even though I didn’t have any documents, they cross-checked the information, we confirmed a couple details like middle names and so on and we got a cheque. It will pay for our holiday this year to Alicante, it’s the first time our children have been abroad so we’re all very excited."

The Unclaimed Assets Register has more than 30 companies on its books – mainly life assurance firms but also the telecoms companies Vodafone and BT. There is a growing problem with big companies who have many small shareholders. Often they move and forget to tell the company so their dividend cheques go missing. BT alone has nearly 2 million individual shareholders, many of whom have held the shares since 1984. A lot have moved house in that time and may well have forgotten about their entitlement to receive dividends. And that could also mean they will miss out on cash following the recent restructuring at the company and miss out on more if company is split in two or is taken over.

The Register at the moment is concentrating on five areas – life insurance policies, pensions, unit trusts, national savings, and unclaimed dividends. It does not do unclaimed lottery prizes – no name and address information is held on them – nor premium bond winners, as National Savings does that itself – though there is around £19 million in unclaimed prizes.

Keith Hollender would like to get his hands on the information from the banks and building societies but at the moment the British Bankers' Association and the Building Societies Association will not provide it, claiming that there are problems with data protection and privacy. Joanna Elson also told Saga Magazine that she did not see why people should have to pay to be reunited with their own money.

But some people see other motives. Even if the banks hold the lower estimate of £5 billion in dormant accounts, it is bringing them in around £250 million a year in interest. Most of the money in these accounts is earning no interest for its owners, so the banks keep it as clear profit.

It is very different in the United States of America. Any money in a bank account which has been unclaimed for five years has to be passed to the State authorities and similar rules apply to insurance policies. Although the money remains the property of the owners and they can always reclaim it – and most States say they are very active in tracing missing owners – the interest on the money is used for the public good. That is not an idea the banks or insurance companies want to see the Chancellor of the Exchequer imposing on them here.

Further information

 British Bankers' Association 020 7216 8909

Restore UK for frozen World War II assets 020 7216 8909 

Building Societies Association 020 7440 2204

National Savings 0845 964 5000

Unclaimed Assets Register 0870 241 1713

July 2001


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