Pension income can come from a number of sources as people tend to build up multiple pots over their working lives. Some people may lose track of how many private pensions they own and these dormant assets could be “unlocked” to fund various charities and government schemes.
Yesterday (May 20), the Culture Secretary Oliver Dowden revealed that £150million from dormant bank and building society accounts is to be unlocked.
These financial assets will be used to help charities, social enterprises and vulnerable individuals during the coronavirus lockdown.
This will include accelerating the release of £71 million of new funds from dormant accounts alongside £79 million already unlocked that will be repurposed to help charities’ coronavirus response and recovery.
Oliver revealed the plans with the following comments: “Charities and social enterprises are playing a vital role in our national effort against coronavirus.
Pension assets may be raided by the government (Image: GETTY)
Financial assets may be tapped into to support coronavirus projects (Image: EXPRESS)
“This funding will support organisations that are at the heart of their communities, building on our unprecedented package of financial support for the voluntary sector.
“Through our proposals to further expand the dormant assets scheme, we want to unlock hundreds of millions more pounds for good causes, while keeping customer protection at the heart of the programme.”
The government are currently consulting on expanding this dormant assets scheme to include a range of further financial assets.
Specifically, they reveal that they are considering the inclusion of insurance, pension, investment and securities assets.
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The consultation on the expansion proposals is expected to close on 16 July 2020.
The government highlighted that consumer protection will remain at the heart of an expanded scheme.
They detail that their priority will focus on attempting to reunite consumers with their forgotten assets and only when this cannot be done will they use the money for the charitable causes.
If at a later date an affected consumer discovers that they had a dormant account and their funds had been transferred, they will be able to reclaim the full amount owed to them.
The consultation will end in July (Image: GETTY)
However, this may be problematic for pensions specifically as it can be difficult to keep track of how many retirement assets a person has.
Pensions can be collected throughout a person’s working life which can last several decades.
It can be easy to lose important paperwork in this area and it can be made even more difficult by certain admin problems, such as if a pension scheme or manager changes name or address.
Private pensions can also be affected by the assets their invested in, meaning they can go up or down in value in line with stock markets.
It could be painful if pensions are tapped into by the government when they are at a particularly low point.
Workers are likely to collect multiple pensions over their working lives (Image: GETTY)
Full details of the scheme can be found on the government’s website and thankfully, there are tools available which can help people track down their pensions ahead of this.
On the government’s website, there is a pensions tracking service which will allow people to find contact details for workplace or personal pension schemes.
The tool is easy to use and simply requires the user to enter an employer’s name and it will provide contact details for all the pensions associated with that name.
The full list of assets under proposal for inclusion is detailed below:
- Dormant insurance policy proceeds
- Dormant share proceeds
- Dormant unit proceeds
- Dormant distributions and proceeds from investment assets
- Other dormant security distributions