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Press release
BSA BACKS GOVERNMENT CONSULTATION ON UNCLAIMED ASSETS
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Date:
20 Mar 2007
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The BSA has given its backing to the Government’s consultation on how best to use money lying forgotten in accounts (often called unclaimed assets).
The idea to reinvest unclaimed assets in the community was first proposed by the Chancellor in the 2005 Pre-Budget Report. Since then, the Government has been in talks with banks and building societies as to the best way of taking the idea forward.
The consultation published today proposes that a voluntary scheme should be set up. This would see money from forgotten accounts, which have not been touched by a customer for 15 years, transferred to a central reclaim fund. The money still remains the property of the person who invested it, or if the person dies, by a rightful claimant. They will be able to reclaim the money directly from their bank or building society. The fund will bear the financial risk for repaying the customer.
Speaking about the launch of the consultation, Adrian Coles, Director-General of the BSA said “we started from the point that this money belongs to the person who deposited it. We have been in detailed discussions with the Treasury for the last two years to ensure that the details were right. This included ensuring that anyone who has a right to money in an account can reclaim it easily. In addition, there have been many technical issues. It is not that easy just to take money off the balance sheet and there are numerous tax and accounting legalities to get right. Today’s consultation is a result of these discussions.”
The proposed scheme will be voluntary and the Banking Code will set out how participating institutions will interact with the scheme. A further consultation, expected later in the Spring, will set out the most effective means of distributing the money. The Government has set out its priorities as youth services and financial inclusion and capability.
The consultation includes the option for small locally-based financial institutions to focus on the needs of their local communities. It is estimated that building societies hold between £50 and £70 million in lost accounts.
Commenting on this, Mr Coles said “building societies have an impressive track record of supporting good causes in the communities from which their members are drawn. We welcome the proposal that many building societies - as small and local organisations - will be able to channel money directly back into these communities.”
Before any scheme comes into operation, building societies will be taking steps to make sure that as many people as possible are reunited with their accounts.
The BSA runs a free account-tracing scheme, in which all 60 UK societies participate. Individuals can complete an online application form or leaflets can be downloaded from the BSA website (www.bsa.org.uk) or requested via the BSA Consumer Line on 020 7437 0655. Alternatively customers can pick up a leaflet at their local building society branch.
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The Building Societies Association (BSA) represents all 60 building societies in the United Kingdom. Building societies have total assets in excess of £305 billion and hold residential mortgages of over £200 billion, approximately 18% of the total outstanding in the UK. Societies hold over £190 billion of retail deposits, accounting for about 19% of all such deposits in the UK. Building societies also account for over 37% of all cash ISA balances. Building societies employ almost 50,000 full and part-time staff and operate through around 2,150 branches.
Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
