The Government has published its response to the consultation on expanding the Dormant Assets Scheme. The Scheme is led by the industry and backed by government and strives to reunite people with their financial assets. Where that is not possible, this money supports important social and environmental initiatives across the UK. Dormant assets remain their owners’ property: customers can always reclaim any money owed to them. The government has decided to include some retirement income assets (annuities with a guaranteed payment period, income drawdown and deferred annuities) in the scheme. The government is reconsidering whether contract-based defined contribution pensions should be included in the scheme.
Kate Smith, Head of Pensions, Aegon comments: “Including certain retirement income assets in the Dormant Assets Scheme, provided they can be converted into cash and the provider hasn’t been able to contact the customer or their next of kin for at least seven years, seems sensible. Customers, or their beneficiaries, can always reclaim the money from the Scheme, and in the meantime it can be put to good use supporting social and environmental initiatives across the UK, including Covid-related initiatives.
“Unfortunately, too many people lose track of their pensions, and the industry works hard at trying to reunite people with their pensions. Auto-enrolment exacerbates this issue which is why pension dashboards and the small frozen pots initiatives are so important. The primary aim of both the Dormant Assets Scheme and pension dashboards is to reunite people with their financial assets. The hope is that the Dormant Assets Scheme will not need to expand further to include pension savings products, as pension dashboards once fully developed, will ensure pensions will never become ‘lost’. If pension dashboards are expanded further in time to include retirement income products, there should be less need to include these in the Dormant Assets Scheme.”
* Response on Dormant Assets Scheme
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