HM Treasury

Financial services

Dormant accounts

17 February 2009

A UK dormant accounts scheme

Many people forget about, or lose track of, small deposits of money in bank and building society accounts. Despite the efforts of banks and building societies to reunite these funds with their owners, they build up as dormant accounts assets in the banking system. Several countries have successfully set up schemes in recent years to enable assets in dormant accounts to be reinvested in society.

The Dormant Bank and Building Society Accounts Act

In November 2007 the Dormant Bank and Building Society Accounts Bill was introduced in Parliament to facilitate the proposed scheme. It has passed through the House of Lords and was introduced in the House of Commons on 27 February 2008. The Bill received Royal Assent on 26 November 2008.

The Act will enable banks and building societies to transfer money held in dormant accounts for reinvestment in the community, and will provide account holders with a right to repayment.

The Acts allows participating banks and building societies to extinguish their liability to a dormant account holder upon transfer of the balance of the account to a reclaim fund. After transfer account holders will have the right of repayment from a reclaim fund which will need to be authorised by the Financial Services Authority. Account holders will be able to continue their usual relationship with their bank or building society, which will act as agent of a reclaim fund.

Money not needed to fund reclaim applications will be passed to the Big Lottery Fund for onward distribution according to the spending priorities in England, Scotland, Wales and Northern Ireland. The spending priorities for England are young people, financial inclusion and financial capability, and, if resources permit, social investment. The Devolved Administrations will determine their own spending priorities, reflecting the needs of their communities.

Principles of the dormant accounts scheme

The key principles underlying the scheme are:

Principles underpinning the distribution of available assets through the Big Lottery Fund are:

Secondary legislation for a UK dormant accounts scheme

The Government intends to lay two statutory instruments before Parliament.

The first extends the scope of FSA authorisation to include reclaim funds.

The second instrument places a requirement on building societies participating in the scheme for smaller institutions, publicly to disclose information in line with the requirements placed on smaller banks by the Act.


If you would like to contact HM Treasury about the proposed scheme please email:

Media links:

External links

Back to top