Today the Dormant Assets Bill received Royal Assent. This will allow the Dormant Assets Scheme to expand and cover additional assets including insurance and pensions.
Commenting Yvonne Braun, Director of Long-Term Savings at the ABI said:
“We have supported the expansion of the Dormant Assets Scheme from the start and the industry looks forward to working with the Reclaim Fund to ensure onboarding works well.
"The industry will continue to work hard to find gone away customers. It is always the first priority to reunite customers with their dormant assets and customers will have a right to reclaim their asset in perpetuity.
"More transparency in the Scheme's spending direction is still needed which we hope will be covered in the spending consultation later this year.”
- Insurers spend millions of pounds every year trying to reunite people with lost savings. Despite robust efforts there are occasions where customers cannot be traced, and money remains unclaimed for many years, even decades. Only these truly dormant funds can be made available to good causes with the potential to make a real difference to people’s lives.
- The proposals also ensure that no matter how long a fund has been dormant, the owner can claim their money back at any point in the future.
- With an estimated £2.1 billion dormant assets in the insurance and pensions sector, the message to customers is: It’s your money, come and claim it.
- Pensions Dashboards will help enable more people to track down pensions they may not know they had. Until then, it is vital that the Government continues to support industry efforts to reunite people with their lost savings.
How can customers track down lost insurance policies or pensions?
The ABI has guidelines to trace and claim insurance and pension policies for customers. If you think you are a customer of an insurance provider who does not have your address, you can find contact details of providers through the Register of Consolidation.
How does the insurance and long-term savings industry try to reunite customers with their lost money?
The ABI has created guidance and a framework on best practice for the industry, informed by research into customer behaviour. This includes:
- ABI Framework for the Management of ‘Gone-Away’ Customers in the Life and Pensions Market
- ABI Gone-away customers engagement optimisation tool kit
- ABI reconnection letter guidance
How will be finding lost pensions become easier in the future?
Pensions Dashboards will enable people to see all their pension pots in one place and allow them to track down pots they may not have known existed. This will help increase the number of people reunited with dormant assets.
How will the Dormant Assets Scheme Work?
Cash will only be put into the scheme if it meets one of the following two sets of criteria:
- Whichever comes first, the point at which it is identified that a deceased owner has no next of kin; or seven years after a death claim is accepted and there is no ongoing contact with these managing the estate; or seven years after the end of the contractual term and there is no ongoing contact with the owner.
- Or the asset owner is at least 120 years old at the time of transfer into the Scheme; and there has been no contact with those managing the estate for at least seven years.
What insurance and pension products will be included in the scheme?
- Savings endowments
- Term insurance
- Annuities with a guaranteed payment period
- Whole-of-life assurance
- Investment bonds
- Income drawdown
- Deferred annuities
The arrangement for Defined Contribution pensions is still under consideration. If any are included, only pensions with a contractual end date where the assets are held in cash and the customer or beneficiary cannot be traced would be in scope.
What insurance and pension products are excluded from the scheme?
- With-profit funds
- Industrial branch policies
- Policies and assets held under group trusts, including occupational pensions
- General insurance assets
- Personal trusts
- Assets held by mutual insurers and friendly societies