Don't Hand Your Cash Over To The Government
Any money left in forgotten accounts will be transferred to a Government scheme in 2009. Here's how to make sure that doesn't happen.
How much money do you think has been left in forgotten bank accounts? Unbelievably, it runs to an estimated £1 billion. And some of that vast quantity of neglected cash could be yours!
It's surprisingly easy to lose track of your accounts. I suspect there may be an old National Savings & Investments (NS&I) Investment Account and an Abbey Saver which I haven't touched in years. I don't expect to find a huge windfall -- probably less than £100 -- but the point is, if I don't reclaim the money, I'll lose it.
So, today I tried out www.mylostaccount.org.uk to help me recover these missing saving accounts. The site offers a tracing service which aims to reunite savers with forgotten bank, building society and NS&I savings and current accounts. What's more it only takes a few minutes to kick a search off and it won't cost a penny.
So far the site has been pretty successful since launch last January. In the first six months, the tracing service helped 140,000 people to track down missing assets. NS&I alone have had 25,000 successful traces and reunited customers with over £41 million. Not bad!
Why is it so important to track down forgotten accounts?
Of course, none of us like to waste money needlessly, so for that reason alone, if you have a sneaking feeling you've lost track of an account visit www.mylostaccount.org.uk and get on the case today. After all, there are still millions of pounds sloshing around just waiting to be reclaimed by their rightful owners.
But there's a second reason. The government is giving banks and building societies the opportunity to hand over cash from so-called `dormant accounts' to the new Unclaimed Assets Scheme.
A dormant account is classed as one which hasn't been used for 15 years and where the chance of reuniting cash with the account holder is remote because the bank can't make contact.
The Unclaimed Assets Scheme is due to be launched in 2009. The scheme aims to release money from dormant accounts for reinvestment in the community. This is likely to fund projects which improve financial capability, financial inclusion and to help young people.
Will money handed over to the Unclaimed Assets Scheme be lost forever?
Thankfully, you'll always have the right to reclaim money even after it has been moved over to the Unclaimed Assets Scheme.
First of all, cash will be transferred to an independent central reclaim fund. It is the responsibility of this fund to retain sufficient money to meet the anticipated cost of future reclaims.
The surplus in the central reclaim fund will then be passed to the Unclaimed Assets Scheme for community reinvestment. But at any stage in the process you have the right to recover your money -- plus any interest which is due.
What are the banks doing to reunite you with your forgotten account?
Banks, building societies and NS&I are committed to tracking down customers with dormant accounts in the run-up to the introduction of the Unclaimed Assets Scheme. Campaigns are being run now to reunite as many people as possible with their lost cash during 2008.
If you're lucky, your bank may even be looking for you now! Here's what three of the Big 5 banks can tell us about their dormant accounts:
Estimated amount of cash in dormant accounts
Number of dormant accounts
Average dormant account balance
Did you know...?
17 accounts have a balance over £100,000
29 accounts have a balance over £50,000
1 in 10 accounts have a balance over £1,000
As you can see, some dormant accounts have really substantial balances. It's hard to believe anyone can forget such vast quantities of cash. Of course, it's possible these customers know they have left a large deposit untouched for many years, but they risk having their money moved to the Unclaimed Assets Scheme next year if the bank can't get in touch.
For more typical savers, the average forgotten balance is £257 at HSBC, £575 at Lloyds TSB and £1,400 at Halifax. This isn't small change and is certainly worth getting back. If you have an old account but moved to a new address without telling the bank, why not get in touch yourself?
What should you do with a windfall from a dormant account?
Here's the good bit. If your bank reunites you with a lost account, what should you do with it? The chances are it probably won't be competitive, after all, times have moved on. So why not think about putting the money into the market-leading instant access account from Kaupthing Edge which pays a generous 6.55% AER. Or, if you like to lock your money away for the longer-term for a better return, ICICI Bank offers the excellent HiSave Fixed Rate Bond which pays 7.20% AER.
Once you've opened a great account with your new-found wealth, just make sure you don't lose track of it again!