Millions of pounds have been left untouched in dormant bank and building society accounts. However, the government has plans to tap in on this dormant money and put it to use in good causes.

What is a Dormant Account?
The term dormant account can apply to money in bank accounts, building society accounts, NS&I accounts and bonds. It refers to money which has not been touched in a given period of time. The money may not have been touched because the account holder has died, the account holder has forgotten about the account, or just because they no longer wish to use that particular account.

Is it estimated that £500 million is currently sitting in a dormant status in bank and building society accounts. A further £435 million is said to be in NS&I accounts and bonds, with £23 million in unclaimed Premiums.

When does an account become dormant?
The time when an account is considered dormant varies. NS&I classes any account or bond which has been untouched in 15 years as dormant – ie there has been no customer activity over that period. NS&I has been around for nearly 150 years and says it has many accounts which have not been touched for decades.

Different banks and building societies will have different policies ranging from 1 year to 15 years, however 3 years is a common definition. Some building societies will also have a ‘gone away’ definition. This basically means that the building society has written to the customer and their post has been returned.

After 15 years, the Government can claim the money in the account if there has been no customer activity in that period.

Customer activity is defined as any activity on the account – from any form of transaction to the customer contacting the bank or building society about their account.

Why does the Government want the money?
The Government wants to use the money for good causes. It isn’t a new idea – it was first proposed in 2005. The Treasury Select Committee commented on the Government’s plans earlier this week and said it wanted NS&I dormant accounts included in the proposals. It also wants to shorten the time-frame for dormant accounts to 10 years.

The Treasury have said they will consider the recommendations. An act of Parliament must be passed before the assets can be transferred to the Government legally. This is expected to happen in 2008, with money starting to transfer to the good causes in 2009.

Even if the Treasury take up the recommendation to include NS&I accounts, Premium Bonds will not be classified as dormant, even if you never touch them. This is because each month, every bond is entered into the monthly draw and this draw counts as customer activity. However, if you win a prize and fail to collect it, it will become dormant in 15 years.

Can I still claim the money, even when it’s gone to the Government?
Yes. As long as you are able to prove that the money is yours, you will be able to have it back again.

How can I stop my account going dormant?
Stopping your account from going dormant is relatively easy – if you have a passbook, pop in to your local branch and get the passbook swiped. This counts as ‘customer activity’. Alternatively, withdraw or deposit a small amount of money into the account. If you choose to re-activate your account, ensure the rates of interest are still good – often, older accounts do not pay good interest rates and it may be in your interest to swap to an account with a better rate.

How can I trace an old account?
If you have lost track of an old account, there are things you can do to track it down.

If it was a building society account, go to the website http://www.bsa.org.uk or call 020 7437 0655.

If it was an old bank account, go to the website http://www.bsa.org.uk or call 020 7216 8909.

For old National Savings accounts, go to the website: http://www.nsandi.com or write a letter to: NS&I Tracing Service, Blackpool, FY3 9YP.

These three organisations will be merging their services in the autumn to provide a single point for people looking to trace their dormant accounts.

Popularity: 41% [?]