It’s estimated around £500 billion is sitting in long-forgotten savings and bank accounts; Dormant bank accounts. Even if you haven’t completely forgotten your savings, but just neglected them for a while, you are likely to be getting a raw deal, thanks to poor rates on closed older accounts.
Banks and building societies are constantly launching new accounts – and then closing down previous bank accounts. However, rather than moving you on to the new deal they will leave your money languishing in the old account – often paying a awful interest rate.
The Financial Services Authority regulations state if an interest rate falls by more than 0.25 of a point and the account has at least £500 invested, savers must be informed. Otherwise, banks rely on advertisements in newspapers and branches to keep customers informed.
Dormant Bank Accounts
An account becomes classified as ‘dormant’ when there has been no activity for around 15 years and the bank hasn’t been able to contact the customer. Once an account is dormant, to avoid fraud, it can no longer be operated and your money will be moved to a central fund and is then put towards good causes.
To avoid your accounts becoming forgotten and dormant, make sure you tell your provider when you move house to keep getting statements related to an account. And keep all documentation when opening accounts; it can serve as a useful reminder if you stumble across it tucked away at a later date. Child savings accounts are often forgotten about too, so ask your parents if any savings were opened in your name. It’s also worth trying to keep track of any mergers between banks and building societies as this can make tracking down your savings more difficult.
Get your money back
If you have any dormant bank accounts and the funds moved into a good causes fund, it doesn’t mean you can no longer get your hands on your cash. The best way to do this is though a free service called mylostaccount.org.uk. The service brings together the tracing schemes run by the British Bankers’ Association (BBA), the Building Societies Association (BSA) and National Savings & Investments (NS&I). Another way to reclaim your cash is to, get a claim form from the BBA website for bank accounts, BSA website for building society accounts, or the NS&I website for NS&I accounts and old Post Office savings accounts.
The services are free to use and all you will need to do is fill in a couple of forms before the search can start.
Common reasons for losing track of an account
1. Banks and Building Societies merging
2. Changing your name and forgetting you had accounts in your old name
3. Childhood savings accounts that you didn’t know you had
4. Moving home and forgetting to tell your bank