The Government estimates that there is £3.7 billion of unclaimed money sitting in pension, investment or insurance funds waiting to be paid out to people who’ve forgotten they have them. And now the Chancellor plans to put it to work.
Under new plans the Government would take control of pension and insurance funds that have been unclaimed for many years. It follows similar action over dormant bank accounts that began in 2012.
The money will be used for what it calls “good causes” and it hopes to raise £1.7 billion and release 60% of that to the good causes. Although
the money is used by the state it’s not lost to the true owners, who can claim their money back in full any time – if they realise it’s missing.
Before any dormant assets are snaffled the finance industry will take extra steps to try to find the people who have left it languishing.
The Government reckons that could reunite £2 billion with its owners. Only when that is done will the remaining assets be converted to cash and taken in by the Government-controlled Reclaim Fund. The scheme has already taken over £1.35bn from forgotten bank accounts and paid out £745m to good causes via the National Lottery Fund.
It’s surprisingly easy to forget about pensions. Around half of those paying into one through auto-enrolment say they don’t know how it works. They are prime candidates to lose track because when they change jobs the pension money stays with the scheme selected by the old employer.
If you think you have a forgotten pension, use the free Pension Tracing service. Find it at gov.uk by searching “pension tracing”, or call 0800 731 0193. Commercial firms also use the phrase “pension tracing” but they will charge you and may not do the job well.
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Pensions aside, the Unclaimed Assets Register contains records of dormant money from 86 insurance and investment companies, but charges £25 for each search: see www.uar.co.uk. There is also a free service to find lost bank accounts at www.mylostaccount.org.uk.
Paul Lewis presents Money Box on Radio 4
QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com Paul cannot answer you personally, but will reflect them in his column.