The UK authorities is seizing funds in dormant bank accounts worth roughly $185 million to fund its coronavirus aid efforts. Up to now, 30 banks have been voluntarily transferring cash from dormant accounts to the federal government, together with HSBC, Barclays, Clydesdale, Credit score Agricole, Danske, Santander, Lloyds, and Financial institution of Scotland. The federal government has additionally proposed including different sorts of belongings that may be seized, akin to insurance coverage insurance policies and share proceeds.
Authorities Unlocks Funds From Dormant Accounts
The UK. authorities introduced final week that “£150 million [$185.74 million] from dormant bank and building society accounts is to be unlocked to help charities, social enterprises and vulnerable individuals during the coronavirus outbreak.”
Tradition Secretary Oliver Dowden detailed that “This includes accelerating the release of £71 million of new funds from dormant accounts alongside £79 million already unlocked that will be repurposed to help charities’ coronavirus response and recovery.” In response to “The Dormant Assets Scheme: A Blueprint For Expansion” report, revealed by the British authorities in April final 12 months:
UK banks and constructing society accounts collectively maintain over £1.3tn of shoppers’ cash in financial savings or present accounts that may be eligible underneath the Dormant Financial institution and Constructing Society Accounts Act 2008.
30 Banks Voluntarily Switch Dormant Funds to Authorities
The UK. authorities’s asset seizure program underneath the Dormant Financial institution and Constructing Society Accounts Act 2008 started in 2011. At present, 30 corporations, together with all main excessive road banks, are taking part in this system. They embody Allied Irish Financial institution UK, ANZ (London department), Financial institution Leumi UK, Barclays Financial institution, Clydesdale Financial institution, Commonwealth Financial institution of Australia (London department), Co-operative Financial institution, Credit score Agricole, Danske Financial institution, HSBC Financial institution, Lloyds Financial institution, Financial institution of Scotland, Nationwide Constructing Society, Riyad Financial institution, Santander UK, and TSB Financial institution.
These banks “have voluntarily transferred funds from accounts that have been inactive for 15 years into the scheme and so far over £600 million has been distributed to good causes,” Dowden mentioned, elaborating:
The federal government is at the moment consulting on increasing the dormant belongings scheme to incorporate a spread of monetary belongings from the insurance coverage and pensions, funding and wealth administration, and securities sectors.
In response to the federal government, shoppers can nonetheless reclaim the quantity owed to them even when their funds have been transferred to the scheme. Reclaim Fund Ltd., an entity regulated by the Monetary Conduct Authority (FCA), is meant to carry sufficient cash to cowl any claims.
Different sorts of belongings that the British authorities has proposed including to this system comply with totally different guidelines of when they are often seized. If authorized, insurance coverage insurance policies and pensions may very well be seized after seven years, cash belongings after six years, and non-cash belongings, shares and dividends of public corporations may very well be seized after 12 years. The UK authorities expects that “The expansion has the potential to bring billions more pounds into the scheme.”
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