Aviva has become the first participant in an expanded version of a scheme which enables dormant assets to be used to support good causes.
The insurance and pensions giant has joined over 40 UK banks and building societies that already participate in the scheme, paving the way for other companies in the insurance and pensions sectors to join.
A dormant asset is a financial product that the owner, executor or beneficiary has not accessed for an extended period (15 years in the case of bank accounts) and where the financial institution’s efforts to trace and reunite the owner with their account or other financial product has been unsuccessful.
Under the scheme, dormant assets remain the property of their owners and the scheme must match what the business would have paid the owner had the cash proceeds of their assets never been transferred into the scheme.
This means that owners can reclaim any money owed to them at any time.
The scheme is voluntary and all participants need to show they take extensive efforts to trace the original owners of dormant assets, so people can be reunited with their funds.
Since the scheme was first established for banks and building societies in 2011, more than £1.6 billion in dormant assets has been transferred to Reclaim Fund Limited (RFL).
Beyond insurance and pensions, the scheme will open to assets in the investments and wealth management sector in the coming months.
Kirsty Cooper, group general counsel and company secretary, Aviva said: “We have been working proactively with RFL and the wider dormant assets community for a number of years to expand the hugely successful Dormant Assets Scheme to the insurance and pensions sector and adapt it for longer-term products.”
Hannah Gurga, director general of the Association of British Insurers (ABI) said: “This expansion unleashes our sector’s potential to use the millions of pounds it has in unclaimed assets to support good causes, with customers being able to reclaim their money indefinitely.
“We’re delighted that years of work with Government, Reclaim Fund Limited and industry has come to fruition and to see the first transfer successfully completed.
“We hope that other insurers and pension providers will follow and have launched a new participation guide for those who are interested in joining the scheme.”
Dormant assets funding is distributed through the National Lottery Community Fund across the four nations of the UK.
Minister for Civil Society and Youth, Stuart Andrew said: “Opening the Dormant Assets Scheme to new sectors will provide an additional pipeline of crucial funding to support disadvantaged young people, help those in financial difficulty and boost social investment.”
Economic Secretary to the Treasury, Andrew Griffith said: “This is a significant moment for the Dormant Assets Scheme and an important reminder of the financial services sector’s vital role in driving economic growth and supporting communities and citizens across the UK.”