Ministers will tap more than PS800mn in cash held in dormant pension, investment and bank accounts to help local communities and vulnerable people in England who are facing the cost of living crisis.
On Tuesday, the Department for Culture, Media and Sport stated that the Dormant Assets Scheme would release PS76mn from bank accounts. Later in the year, millions of pounds will be released from dormant investment and pension accounts.
Fair4All Finance, an independent non-profit organization, will award interest-free loans to 69,000 people who are struggling with rising living costs and high interest rates for the first funding.
Access and Big Society Capital will disburse another PS31mn to hundreds of charities. This is in order to make buildings owned by social businesses more eco-friendly through new boilers and solar panels.
The DAS has been used by the government to release nearly PS900mn of bank accounts that were not in use since 2011. This money has been used to generate social investment and help financially vulnerable individuals.
If accounts have been left unclaimed for a long time, they are called “dormant assets”. DAS attempts to reunite individuals with lost funds. However, it uses unclaimed cash to support social or environmental initiatives.
DCMS stated that, after the initial PS76mn was released, another PS738mn would become available from investment, wealth management, and insurance products.
The government will also allow community wealth funds to be created. These funds can be released over a long time to areas in need. This gives local residents the ability to choose how they are spent.
Sir Ronald Cohen, cofounder of Big Society Capital which was established in 2012, stated: “Unclaimed assets are public money; they don’t belong to banks or insurers, even if it sits on the balance sheet.”
Stuart Andrew, civil society minister, stated that the creation of community wealth funds would give residents of some of the most deprived areas in the country the ability to improve their lives and invest in the things that matter to them.
Reclaim Fund Ltd was established to manage the DAS money. It aims to sign up insurance and pension groups like Aviva in the next months. Wealth managers and investment businesses will join later in the year.
Companies can voluntarily transfer money from dormant assets to the Reclaim Fund. This fund has enough cash to pay people who rediscover accounts that have been closed.
To date, the DAS has supported a variety of projects, including the Greater Manchester Homes Partnership which has housed 355 homeless persons with support from Big Society Capital and Homebaked, a cooperative bakery and community trust in Liverpool.