Unclaimed Money to Charity - UK Plan
Monday, 31st July 2006 at 1:07 pm
The newly formed Commission of Unclaimed Assets in the UK has called for the creation of a ‘Social Investment Bank” to allow the distribution of unclaimed money to charities.
The UK Government-backed commission was set up late in 2005 to decide how best to manage millions of pounds currently lying in unclaimed British bank accounts, with the consensus being that the money should go to charity.
In its first report to Government the CUA proposes that the best way to achieve this would be through the setting up of a separate financial institution to which the spare money will be transferred.
However, it remains unclear how these funds will then be distributed, and what criteria will be used to select the charities that will benefit, although charities working to alleviate extreme poverty are thought to be favoured by the commission.
Although agreeing that charities should benefit from the unclaimed funds, banks have expressed concerns over exactly how many years of inactivity need to pass before an account is regarded as “dormant” – no longer in use by its holder.
The London Telegraph newspaper reports that the Government has proposed that all accounts untouched for 15 years could be considered unclaimed assets.
The Building Societies Association and the British Bankers’ Association said it was vital that money could still be reclaimed by its owners, or their heirs, even if it had been transferred to the proposed social investment fund.
It is thought that there is at least £400 million in British bank accounts that have not been touched for more than 10 years, while some estimates put the total value of unclaimed assets as high as £5 billion.
The Unclaimed Assets Commission says that setting up the bank would be preceded by a campaign to unite account holders with their assets.
Sir Ronald Cohen, the chairman of the commission is reported as saying that the Social Investment Bank would make money available for charities and voluntary organisations that seek to relieve poverty in the UK. The money would be used to capitalise the bank, which would offer loans and development grants.
In Australia unclaimed monies are return to Federal Government coffers after seven years. Currently, unclaimed funds are handled by ASIC, the Australian Securities and Investments Commission.
ASIC holds unclaimed amounts of money transferred from banks, credit unions, building societies and companies. This money is transferred to the Commonwealth Government if the account has not been used for over seven years and contains $500 or more.
The three categories into which unclaimed amounts are held by ASIC are:
Banking: money from banks, credit unions and building societies
Life: money from life policies held with insurance companies friendly societies
Company: money from the compulsory acquisition of shares resulting from
Total claims paid 1 July 2005 to 30 June 2006 total $30 million. Total unclaimed monies being held by the Government, mostly in Consolidated Revenue, as at July 2006: $450 million.
Largest amounts currently unclaimed are:
Banking: $324,108.44 (ANZ Bank account NSW)
Life: $210,810.00 (MLC Life Limited policy)
Company: $205,724.41 (from Company takeover)
The largest amount of money ever claimed was $405,392.79 in July 1995. This was a bank account held in the name of a Victorian woman.
Would a Social Investment Bank work in Australia? Let us know your thoughts. Send an email to email@example.com.