Up to £800m in pensions and investments assets could be unlocked following a major expansion of the UK's ‘Dormant Assets Scheme', the government announced this morning.
Assets held via vehicles including savings endowments, investment bonds and income drawdown will be made available for a range of UK projects through the scheme. According to governement data, over £745m has already been distributed to a variety of causes using dormant assets held in banks and building societies.
A crucial change for policyholders is that they will always be able to claim their money back - no matter how long a fund or asset has been deemed dormant.
This is money that could make a meaningful difference to the lives of thousands of people struggling through the pandemic."
Tom Selby, senior analyst at AJ Bell, commented: "An estimated 1.6 million retirement pots representing £19.4 billion of assets could be classified as ‘lost' in the UK. While the industry's priority must remain reuniting these pots with their owners, there are various circumstances where this simply won't be possible and the assets become dormant."
"Where this is the case - and particularly given the strains placed on millions of people by Coronavirus - it makes sense to put that cash to good use."
"The Dormant Assets Scheme has successfully marshalled £745m in funds previously gathering dust with banks and building societies to pay for a variety of projects since its launch in 2011. This includes £150m which was unlocked to support the charity and voluntary sectors in May last year as part of the UK's Coronavirus response."
"By using dormant pensions and investments in a similar way, the Dormant Assets Scheme's financial war chest could be boosted to the tune of £800m. This is money that could make a meaningful difference to the lives of thousands of people struggling through the pandemic."
"It is important to make clear that this is not a pensions raid of any sort. Those who hold a policy which is used as part of the Dormant Assets Scheme will always be able to claim their funds back, no matter how long it has been deemed dormant."