Expanding dormant assets scheme will help tackle financial exclusion

Adrian Smith

Adrian Smith

The world has changed immeasurably since the Department for Digital, Culture, Media and Sport (DCMS) first began to consult in February on plans for a major expansion of the dormant assets scheme. 

Ten years on from Reclaim Fund Ltd (RFL)’s incorporation as the custodian of dormant assets, and nine years since we first took in funds from banks and building societies, the consultation into expansion plans, which closes tomorrow, could potentially unlock millions of pounds of additional support for good causes across the UK.

Events of 2020 have brought the social need into stark relief as communities have grappled with the impact of Covid-19.

Perhaps one of the best kept secrets of the UK’s financial services industry, the dormant assets scheme came into being in 2008 through legislation allowing funds to be pooled together to address social challenges.

The scheme’s participants have grown to include virtually all of the UK’s major banks and building societies.

Their collective aim in voluntarily joining the scheme is to use the money held in thousands of dormant accounts to support good causes and social enterprises while protecting consumer rights to reclaim.

Of course, the core objective of any financial organisation is to safeguard customers’ money – and to reunite the two, should they ever fall out of touch.


However, when people move address, change their names, pass away without leaving a will or simply forget they have an account, funds can become lost in dormant accounts – and even the best tracing and reunification efforts cannot unearth the original owner.

This is where the dormant assets scheme and RFL come in.

Under the established scheme for banks and building societies, funds from accounts that haven’t recorded any activity for 15 years or more can be transferred to RFL for safekeeping.

We in turn transfer a portion to The National Lottery Community Fund where it is allocated to the nations of the UK in line with government policy, to support causes that tackle some of society’s most pressing issues.

Enough money is always retained to cover any claims that may be made by customers, or next of kin, who have successfully been traced.

Even after dormant assets have been transferred to support good causes, if a customer comes forward they will always be reunited with their assets.

They will never lose out and can always rely on the scheme to restore them to exactly the same financial position they would have been in had the transfer never have occurred. 

Three core principles have guided the scheme’s progress to date: prioritising consumer protection, voluntary industry participation and the guarantee that customers can reclaim their funds in full at any point.

Underpinning this is the fact that no dormant asset funds have been spent on the operation or administration of RFL itself.