The government has announced the first grants to be made under its new Dormant Assets Scheme, which will include lost pensions help.
The scheme launched last year created a pot of money taken initially from dormant bank accounts. The scheme is voluntary, and all the UK Banks participate. They decide which accounts are dormant having tried every means to contact the account holders. They then transfer the money into the scheme and close the account. If the account holder does come to light, they can still reclaim their money from the scheme.
The scheme has so far collected £800 million.
The first £76 million will now go to an organisation called Fair4AllFinance who will grant interest free loans to 70,000 people in need of financial support. This is done through the funding of local community finance groups.
A further £31 million is being given to Big Society Capital to distribute through its existing network of support to local charities and social enterprises.
The government has now decided that lost pensions can help and has extended the scheme to include money from dormant pension schemes and investments.
Its not only pensions that can get lost over time.
The National Audit Office (NAO) has also published a warning about the potential for lost Child Trust Funds (CTF’s). If you remember these were introduced between 2005 and 2011 by the then labour government to help children get a start in their adult lives. £250 per child was paid into a savings account which could be accessed at 18. For some children the figure was £500. Over £2 billion was paid into benefit over 6 million children born between 2002 and 2011.
The NAO reported that CTF’s were now worth over £10 billion with an average value of £1,911. Because they were invested in stocks and shares. As of April 2021 there was over £350 million in unclaimed CTF’s on behalf of almost 150,000 children who had turned 18.
The risk is that like the lost pensions help, many more will become forgotten and lost. HMRC say that they are constantly reminding people of their CTF’s. But it is unclear how up to date their child database is.