Policy
Lost Accounts
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Where there have been no transactions on a building society or bank account for an extended period, the account may be referred to as 'dormant'. In most cases the accountholder knows where their dormant account is held, but has chosen not to touch it. This is frequently the case with savings accounts. Building societies are homes for long-term savings, in which people tend to place their savings for safekeeping, and may choose not to make withdrawals for many years.
Lost accounts occur where the accountholder and the building society have lost touch, for example, because the accountholder has moved house and forgotten to tell their building society.
Money in a building society always belongs to the accountholder. It can be claimed at any time by them or if they die, by a rightful claimant.
The BSA estimates that up to £130 million is currently held in lost building society accounts.
Building societies take the issue of tracing the owners of lost accounts very seriously and the BSA runs a free account-tracing scheme, in which all 55 UK societies participate. A leaflet explaining the scheme - with a form for tracing lost accounts - can be downloaded here.
The BSA, together with the British Bankers' Association and National Savings and Investments, operate a tracing website, mylostaccount.org.uk that offers a free, one-stop, tracing service, where you can search for a lost bank, building society ofr National Savings Account. Since its launch in January 2008, more than a quarter of a million people have used this simple, easy-to-use search facility.
You can also get it from BSA by calling 020 7520 5900. Or you can pick up copy at your local building society branch.
The British Bankers' Association operates a similar tracing scheme. You can get its leaflet from www.bba.org.uk
The use of unclaimed assets for good causes
Under legislation passed in November 2008, a new, voluntary, unclaimed assets scheme is to be introduced in the second half of 2009. The scheme provides for banks' and building societies' lost accounts (or unclaimed assets) - if still unclaimed after 15 years - to be paid over to certain good causes, such as youth and community facilities and to promote financial inclusion and financial capability. Importantly, the Treasury's propsals would safeguard the rights of account holders or their lawful heirs to reclaim the money in their account at any time.
The 15 year definition for unclaimed assets embodied in the legislation is sensible. The longer the timescale, the greater the likelihood that the accounts are genuinely lost, rather than merely dormant.
Under the unclaimed assets scheme, smaller, locally-based financial institutions will be able to focus on the needs of the communities in which they operate. For building societies, this is a welcome element of the scheme - building societies have close links with the communities from which their members are drawn and it is important that most building societies will be able to continue to support good causes in their local areas. As mutual organisations, lost account money in building societies is used collectively for the benefit of all members of a building society, funding good value mortgages, which currently allow 2.5 million people to purchase their own home.
The legislation that will underpin the new scheme is the Dormant Bank and Building Society Accounts Act 2008. This can be viewed via the link below. Also set out below are links to HM Treasury's consultation papers on the new scheme and the BSA's responses. These preceded the Act and help explain the background.
The Dormant Bank and Building Society Accounts Act 2008
Treasury consultation paper on unclaimed assets - March 2007
Treasury consultation paper on distribution of unclaimed assets - May 2007
BSA Response to HM Treasury Consultation
BSA Response to HMT Consultation on Unclaimed Assets Distribution
