One of the more enlightened moves ever made by the financial services
industry was to set up the Unclaimed Assets Register some 18 months ago.
All credit to Aon for taking this imaginative and common-sense initiative.
The service the UAR offers is invaluable in tracing unclaimed assets
belonging to those who have moved house, forgotten their investments or
who have died.
Anyone dealing with an elderly person's affairs or involved in winding up
an estate and obtaining probate will know how much time can be saved by
simply requesting a search at the UAR.
The UAR currently holds data relating to owners of some two million lost
or forgotten life policies. UAR managing director Keith Holl- ander reckons
that around 75 per cent of UK life companies now co-operate with the
register, passing on information on unclaimed maturing policies or where
the company has simply received no response from the policyholder. An
estimated £15bn of financial assets currently remain unclaimed.
This month, the database was expanded to incorporate unclaimed dividends
on shares, mutual funds and other securities, believed to amount to over
The initiative is being supported by Proshare, the Investor Relations
Society, and the Association of Private Client and Investment Managers and
But while probably 35 per cent of the population has a life or savings
policy of some sort and a smaller proportion investments in shares and unit
trusts, it is the participation of the banks and building societies with
their huge coverage of the savings market which will really transform the
usefulness of the database.
Some 80 per cent or more of the population have a bank or building society
Needless to say, the banks and building societies are dragging their feet
on this, probably because they have difficulty themselves in identifying
But dormant bank and building society accounts comprise by far the biggest
chunk of unclaimed money – an estimated total of £5bn compared with
only £1bn unclaimed life policies.
It is easy to see why the banks and building societies are being slow on
joining the UAR. Quite apart from the embarrassment of admitting the
limitations of their computer systems, unclaimed money is cheap finance.
Interest credited on uncla-imed money usually accrues at a pathetic rate
of interest and is a useful bolster to reserves.
But the damage the banks and building societies do themselves in terms of
customer relations by not joining the UAR is enormous.
Equally important must be the facility to interrogate the UAR for
information on gilts. The Government must set a good example here.
Not only could the Treasury and the Bank of England save money by allowing
the UAR to deal with requests for information but it would be a good role
model for the banks and building societies and strengthen the Government's
pro-consumer credentials, which are in sore need of a boost.
Occupational pensions are another important area for unclaimed assets and
it is not always the consumers' fault when contact with the company pension
scheme has been lost. Until recently, there was no requirement for an
occupational pension scheme to communicate regularly with its members –
whether current contributors or deferred pensioners.
Consequently, large numbers of pension fund members lost touch with their
companies through takeovers, mergers and failures. Requests for information
on the whereabouts of a previous employer's pension scheme is by far the
biggest category of enquiries to the Occupational Pensions Registry.
Hollander says the main reason for people losing track of their
investments is failure to inform the institution concerned of a change of
address. With over 1.5 million families moving house every year, this is a
“A cocktail of moving,marrying and dying are the main causes of lost
investments,” explains Hollander. “Company name changes do not help. Since
1995, 44 of the FTSE100 companies have undergone a name-change or takeover.”
The UAR, together with the Financial Ombudsman Service, probably do more
to aid and protect consumers than any amount of regulation. The Government
and the banks should be leading the way on this.
The UAR can be searched by members of the public and their legal
representatives on payment of a £15 fee for life products and personal
pensions, £12 for National Savings, £5 for premium bonds and
£15 for occupational pensions.