As the Dormant Assets Scheme is set to expand into new sectors an addition £76 million will be released and spent on good causes including helping people with the cost-of-living crisis, bringing the total the scheme has released since 2011 to £892 million.
An estimated £738 million more will be made available over time thanks to the expansion of the Scheme to the new sectors.
Where do dormant assets come from?
Dormant assets are financial assets, such as bank accounts left untouched for long periods. Led by the financial services industry and backed by the government, the Dormant Assets Scheme aims to reunite people with these lost funds. Where this is not possible, it can be transferred to the Dormant Assets Scheme to be distributed to social and environmental initiatives.
The Dormant Assets Scheme unlocks money from forgotten bank and building society accounts, and will soon include further assets from the insurance and pensions, investment and wealth management, and the securities sectors.
An estimated £738 million more will be made available over time thanks to the expansion of the Scheme to the new sectors.
Dormant assets remain the property of their owners and the Scheme must match what the business would have paid the owner had their assets never been transferred into the Scheme. This means that owners can reclaim any money owed to them at any time.
“I’m delighted with the Government’s new announcement on future dormant assets funding. The expanded Scheme will help to make a real difference to the lives of those people who need it most across society, freeing up millions of pounds at a time when financial hardship is a real cause for concern, and I welcome the news that financial inclusion will receive additional funding to support this.”
Kirsty Cooper, Champion for the Insurance and Pensions sector and Group General Counsel and Company Secretary
Where is money from dormant accounts spent?
Since 2011, £892 million has been released via the Scheme. In England, dormant assets money has been used to support young people, help those in financial difficulty, and generate social investment.
The Dormant Assets Scheme has supported many projects across the country. These include:
- Following the pandemic, Chanctonbury Community Leisure in Storrington, West Sussex were provided with a £50,000 grant and £100,000 loan from CAF Venturesome which was partly used to install a new 3G pitch. This has become a major community asset with 20 local teams training each week on the facility, including a new girls’ football team and women’s football and rugby teams.
- Supported by Big Society Capital, The Greater Manchester Homes Partnership have enabled 355 of Greater Manchester’s homeless people to be housed.
- Youth Futures Foundation has supported 802 young people in the Greater Manchester region with employability skills, including through the Manchester Deaf Centre, which helps children and young people who are deaf, deaf/blind, or children of deaf adults and have experienced increased isolation due to Covid-19.
- Fair4All Finance has committed £25 million to the Affordable Credit Scale Up Programme, which is projected to help triple the availability of affordable credit to approximately £900 million by 2025.
- Big Society Capital committed £8.5 million to Black Country Reinvestment Society, which invests in local enterprises, such as Miss Macaroon, a social enterprise which reinvests 100% of its profits into helping unemployed young people gain employability skills.
- Access’s Growth Fund supported 41 projects across the Liverpool City Region with £3.7 million investment. This includes support for Homebaked, a co-operative bakery and community land trust based opposite Liverpool FC’s Anfield stadium, enabling them to meet growing demand through the development of a dedicated catering unit with specialised equipment and freeing up space in their own kitchens for classes for local children.
“As the distributor of dormant assets, The National Lottery Community Fund sees first-hand the life changing difference this funding makes. I welcome the Government’s plans to include community wealth funds alongside existing causes. This reflects The National Lottery Community Fund’s experience of funding and supporting communities over decades. I look forward to turbo charging efforts through this expansion. ”
David Knott, Chief Executive, The National Lottery Community Fund
Final thought
The Dormant Asset Scheme has been a big success so far. An innovative way to freeing up funds in can only be a good thing that the scheme is expanding into different kinds of asset, allowing more money to be spent on worth causes in the future.
With revenues approaching £100 million per year this scheme is a limited but welcome addition to poverty relief and levelling up.