Unlocking Impact: How Foreign Banks Can Participate in the UK Dormant Assets Scheme

Since its inception in 2011, the UK Dormant Assets Scheme has continued to channel otherwise dormant funds into social and environmental initiatives across the country, whilst maintaining the customer’s right to reclaim their funds at any point. As the operator of the Scheme, Reclaim Fund Ltd (RFL) has welcomed more than 50 financial institutions, including overseas banks.

The Scheme allows participating firms to voluntarily transfer the cash value of eligible dormant funds to RFL. From supporting those in financially vulnerable situations to helping young people gain employment skills, the Scheme continues to be an innovative solution that drives social change through sustainable funding.

What Are Dormant Assets?

Dormant Assets are accounts, funds, policies or shares that have not been accessed for an extended period, and that financial institutions cannot reunite with their owners.

A bank account is considered dormant when it has been inactive for 15 years or more, and the bank has been unable to contact the customer, despite reasonable efforts.

After joining the Dormant Assets Scheme, banks can voluntarily transfer these dormant funds over to RFL. Doing so relinquishes their liability to repay their customer – a liability that RFL takes on in their place. RFL reserves a portion of funds to meet any future reclaims, and reimburses participants for these quarterly, and distributes the rest to good causes.

Can Foreign Banks Join?

Foreign banks are eligible to participate in the Dormant Assets Scheme provided they meet a few basic criteria:

• Banks must be willing to undertake appropriate due diligence to confirm that the funds are eligible and reasonable efforts to reunite customers with their money have been made
• Banks must be an authorised deposit-taker
• Banks must have at least one branch in the UK
• Dormant funds must be converted into sterling prior to transfer, and any reimbursements from RFL must similarly be accepted in GBP
• Participants must retain adequate records to verify customer reclaims

For many foreign banks, especially those with long-standing customer bases in the UK, the benefits of joining the Scheme are clear: the removal of liability on dormant accounts, enhanced ESG credentials, and a meaningful contribution to UK society.

RFL’s dedicated Account Management team are on hand to help firms through any operational processes, due diligence, or documentation that may be needed to participate.

Benefits of Joining the Scheme

One of the most significant advantages for banks is the transfer of fund liability. RFL takes on this liability to repay customers, enabling banks to clean up their books and easing a significant administrative burden, whilst ensuring they retain vital control of their customer data and relationship.

In addition, the Scheme has reputational benefits. Being a Scheme participant demonstrates a commitment to corporate social responsibility, aligning well with ESG objectives. This is particularly significant in a time where customers and stakeholders are increasingly scrutinising firms on their social impact.

Perhaps most significantly, through joining the Scheme participating banks can have a significant impact at scale. To date, RFL has unlocked over £1 billion for good causes – putting money that would otherwise be gathering dust in forgotten accounts to work. This money is having a transformative impact on thousands of lives across the UK.

This was mirrored by comments made by charities Minister Stephanie Peacock MP, who said:

A Proven Track Record of Impact

Distributing £1 billion for vital social and environmental initiatives was a landmark achievement for the Dormant Assets ecosystem.

It highlighted the collective impact of financial institutions across the UK who have partnered with RFL to unlock the potential in dormant funds.

To commemorate the visit, the team at RFL travelled to Blackpool to visit a recipient of dormant assets funding through Youth Futures Foundation (YFF), one of the four organisations in England which receive dormant funds via The National Lottery Community Fund.

Connected Futures, YFF’s flagship programme, works with partners across England to break down barriers to meaningful employment for young people from marginalised backgrounds.

Over £2.68m is being invested over five years to support this in Blackpool, as a collective of local organisations work together to transform the support offered to young people and raise 16-24 employment, education and training rates in the town.

Barry Fletcher, CEO of Youth Futures Foundation said:

“It’s fantastic to hear that RFL has reached such a significant funding milestone. This £1 billion Dormant Asset investment has unlocked funding that provides organisations nationwide the opportunity to deliver vital programmes that help our communities thrive.”

Expansion and Beyond

In June, the publication of the government’s first ever Dormant Assets Scheme Strategy set out a further £440 million funding for people and communities who need it most. Over the 2024-28 period, it will further uplift projects focused on young people, financial inclusion and education, social investment, and community wealth funds.

The Scheme itself continues to expand in further financial sectors. In 2023, RFL welcomed Aviva as their first participant in the Insurance and Pensions sector, and trailblazing firms in the Investment and Wealth Management sector are set to follow suit soon.

Getting Started

With so many exciting developments and opportunities for significant societal impact, there is no better time to take the first steps in participation.

To find out more, contact: reclaimfund@reclaimfund.co.uk

Content Partner

The Dormant Assets Scheme is operated by Reclaim Fund Ltd (RFL). RFL has managed the Dormant Assets Scheme since its inception in 2011.
RFL’s principal activity is the receipt and management of dormant asset monies.

RFL is a not-for-profit public body owned by HM Treasury. It operates as an independent legal entity, acting at arms-length from the Government within a strategic framework set by Ministers. RFL is FCA-regulated, with the rights of dormant asset holders guaranteed by the UK Government.

To find out more, contact: reclaimfund@reclaimfund.co.uk

Authored By

Adrian Smith OBE

Adrian Smith is the Chief Executive of Reclaim Fund Ltd (RFL).

Adrian was responsible for leading the project to establish RFL in 2009/10 and became its Chief Executive in 2011.

Leading and managing RFL, Adrian oversees the continuous development and growth of the business in managing the team. Working with key industry leaders, Adrian encourages ongoing widespread participation in the Dormant Assets Scheme. In recognition of this work, he was awarded an OBE in 2022 for services to the financial sector.