The Department for Culture, Media and Sport has announced that significant funds from forgotten bank accounts is to be released to help support vulnerable people through the continuing cost of living crisis, as well as assisting social enterprises.
Around £76 million is being unlocked from forgotten bank and building society accounts to help the government provide assistance to the most vulnerable in society. Mainly, this will be used to help people get out of any debt that the cost of living crisis may have left them in, with no-interest loans for just under 70,000 people that are struggling financially.
Alongside the support for individuals, hundreds of charities and social enterprises are set to receive support from a pot worth £31 million, as part of a drive to assist them with energy saving solutions. Examples of how this could be used include the retrofitting of premises with cleaner energy systems like new boilers, heat pumps, solar panels and lighting.
Lucy Frazer, Culture Secretary, said:
“Today we are announcing that millions of pounds will be redirected from dormant accounts to help the most vulnerable in society deal with the cost of living.
“This will have a real impact on people’s lives, help alleviate debt and provide money saving solutions for charitable organisations”
Dormant assets are classified as financial assets that have been left untouched for long periods of time. The Dormant Assets Scheme is led by the financial services industry and is backed by the government, aiming to reunite people with lost funds. Should this be unachievable, the Dormant Assets Scheme will distribute the money to important social and environmental initiatives, to greater benefit the people.
Money unlocked by the Dormant Assets Scheme can come from bank and building society accounts, however this is soon to include assets from insurance and pensions, investment and wealth management, and the securities sectors. This expansion will ensure that an estimated further £738 million worth of investment can be unlocked and made available over time.
£892 million has been released by the scheme since 2011, with this being used in England to help young people, those in financial difficulty, and with the generation of social investment.
As well as announcing the release of this dormant funding, the government has confirmed that community wealth funds are to become a beneficiary of the Dormant Assets Scheme. Empowering local residents to make decisions on how money should be spent, the community wealth funds offer a pot of money to be distributed to communities in deprived areas to be released over a longer time period. This ensure that funding decisions are made locally, whilst also continuing to support youth, social enterprises and financially vulnerable people.
DCMS Minister Stuart Andrew added:
“The public consultation on dormant assets funding provided people with the opportunity to name how many that will be unlocked should be spent, and I’m delighted to announce our plans to introduce a community wealth fund as a new cause.
“The creation of a community wealth fund will give local residents in some of the more deprived areas of the country the power to improve where they live and invest in what’s important to them.”
Chair of Reclaim Fund Ltd and Dormant Assets Expansion Board, Jane Hanson CBE, said:
“The government’s announcement on future dormant assets funding comes at a particularly important time given the pressures on so many households. Thanks to the collaborative efforts off the Dormant Assets Expansion Board, which brings together industry, government and regulators, the Scheme is now poised for expansion, which could result in £880 million in additional dormant assets funding to good causes across the UK. Reclaim Fund Ltd is making the final preparations to launch the expanded Scheme and we look forward to welcoming participants from the insurance and pensions sector, followed by other sectors, including investment and wealth management, later this year.”
