Insurance giant Aviva joined the dormant asset scheme today as the programme opened up to pensions and insurance firms.
Aviva will join over 40 banks and building societies that currently participate in the scheme.
Kirsty Cooper, group general counsel and company secretary, said Aviva had been working with the Reclaim Fund and dormant asset scheme for “a number of years” to expand the fund.
The dormant asset scheme has operated since 2011. In that time around £900bn has been distributed to support causes such as financial inclusion. Its managers say its work is more important than ever during a cost of living crisis.
So far the scheme, which is operated by the Reclaim Fund, has only been open to banks and building societies. However, last year the government opened the scheme up to include other financial services firms.
Aviva’s entry is the first since the scheme expanded with expectations that many more will follow.
Jane Hanson, chair of the dormant assets expansion board, said “the momentum that built in the banking sector will be replicated in the pensions and insurance sectors.”
“There’s lots of intrigue and interest in the scheme…I’m sure others will join,” she continued.
The Reclaim Fund estimates that up to £880m could be made available through the scheme’s expansion, although chief executive of the fund Adrian Smith said it will “take some time to get going”.
Dormant assets are financial products, such as bank accounts and pension funds, that a customer has not used for a specified period of time – 15 years in the case of bank accounts and seven for pension funds.
Financial institutions have to attempt to reunite the funds with the account holders, but if that fails the funds can be transferred to the Reclaim Fund who take on the liability. However, dormant assets remain the property of their owners and can be claimed by account holders in perpetuity.
Smith said other sectors, such as investment and wealth management funds, are likely to be able to join the scheme by the end of this year after an Financial Conduct Authority (FCA) has concluded.
City minister Andrew Griffith said the expansion of the scheme was “a significant moment” and “an important reminder of the Financial Services sector’s vital role in driving economic growth and supporting communities and citizens across the UK.”