Gov't Hands £150M From Forgotten Accounts To Virus Relief

By Najiyya Budaly
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Law360, London (May 21, 2020, 12:38 PM BST) -- The government said Thursday that it will unlock £150 million ($180 million) from dormant bank accounts to help charities, social causes and vulnerable people during the COVID-19 outbreak.

Some £150 million ($180 million) is being unlocked from forgotten bank accounts amid the crisis, Culture Secretary Oliver Dowden has said. (AP)

Culture Secretary Oliver Dowden said that the package will be made up of £71 million of new funds from accounts forgotten by consumers. The remaining £79 million has already been unlocked and will be redirected to help charities responding to the coronavirus pandemic.

The dormant account program, which the government launched in 2011, allows banks and building societies to empty accounts that are not being used and redistribute the money to help young people get into employment, encourage savers to invest in products that benefit society and tackle financial exclusion.

Thirty banks, including major lenders, have voluntarily joined and transferred more than £600 million into the plan, the government said.

"Through our proposals to further expand the dormant assets scheme, we want to unlock hundreds of millions more pounds for good causes," Dowden said Thursday. "Charities and social enterprises are playing a vital role in our national effort against coronavirus. This funding will support organizations that are at the heart of their communities."

The government is also consulting on expanding the dormant asset scheme to include forgotten insurance and pensions accounts.

The government said Thursday that it will give £45 million of the amount set aside for the coronavirus response to sustainable investor Big Society Capital, which will provide emergency loans to charities. And it will hand £65 million to Fair4All Finance, which supports affordable credit providers.

Financial services companies are required to prioritize reuniting customers with their money. But the funds are released into the program if this is not possible. Account-holders can reclaim the full amount from the scheme if they come forward later.

--Editing by Ed Harris.

For a reprint of this article, please contact reprints@law360.com.

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