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Millions from dormant accounts earmarked for problem debt

Millions from dormant accounts earmarked for problem debt

Up to £330m from dormant bank accounts will be distributed to a variety of good causes, including helping those with problem debt.

The money will also be used to help the homeless, disadvantaged young people and local charities in the UK over the next four years.

A total of £55m is set to be awarded to financial inclusion and capability initiatives which will tackle issues such as problem debt, as well as improving access to financial products and services for those on lower incomes.

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Tracey Crouch, minister for sport and civil society, said: "By unlocking millions of pounds from dormant accounts for a range of good causes, we can make a real difference to lives and communities across the country.

"This is part of the government’s commitment to building a fairer society and tackling the social injustices that hold people back from achieving their full potential.

"I am grateful to the banks and building societies, as well as Reclaim Fund Ltd, for their work to free up these funds for good causes. Working in close partnership with the financial sector and civil society, we are determined to help create a country that works for everyone and build a Britain fit for the future."

Around £280m will be allocated to initiatives across England to help disadvantaged young people into work, provide housing for families and vulnerable people, and tackle problem debt.

Of this, up to £135m will be used by Big Society Capital to fund stable and long-term accommodation for vulnerable groups such as homeless people and those suffering with mental health issues, as well as to provide support for local charities and social enterprises.

Under the Dormant Bank and Building Society Accounts Act 2008, the Big Lottery Fund is able to distribute assets from cash accounts which have been inactive for 15 years.

The money is collected by the Reclaim Fund, which collects the money from those banks and building societies which choose to participate by transferring the cash from their dormant accounts.

Adrian Smith, chief executive of the Reclaim Fund, said: "We are delighted that this release will bring the total distributed from Reclaim Fund to Big Lottery Fund to more than £500m in the first six years of the scheme.

"We will continue to work hard in ensuring that consumers can at any time reclaim money owed from their dormant accounts while working with the government to deliver further funds for good causes."