Are you due a share of £50bn of lost assets?

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

Could you be due a share of £50bn the nation has collectively mislaid down the back of the sofa?

This staggering sum is the estimated value of lost and forgotten bank accounts, savings products, pensions and investments in the UK.

Collectively known as “dormant assets” according to a new report, an estimated 20mn people have lost touch with financial providers over the years. This includes some £37bn in lost pensions; £4.5bn in lost bank and building society accounts; £2.8bn of assets held by wealth managers; £2.5bn worth of lost share holdings and £2bn of life cover and long-term savings policies.

Tempted to rootle through your old paperwork? Unfortunately, finding out if any of this cash mountain belongs to you is not an easy process — and as I explain below, it’s about to become even harder.

But that hasn’t stopped the government from launching a consultation this week on which “good causes” the next tranche of this unclaimed money should be spent on.

Ministers say that £3.7bn of assets currently “sitting idle” will be brought into scope by expanding the dormant assets scheme to cover a much broader range of financial products.

It is hoped that £2bn of this money can be reunited with its rightful owners under the scheme’s “reunification first” principle, but a further £880mn could be given to good causes over time.

In England, £100mn already released via the scheme has been directed at improving financial inclusion — and I’d argue this should be an even greater priority as the cost of living crisis deepens.

Providing affordable credit for low-income customers locked out of mainstream financial products has resulted in estimated interest savings of £50mn-£75mn for these customers, according to Fair4All Finance, the body distributing the cash. With more family budgets sinking into the red, the need is even greater.

The problem? There aren’t enough affordable loans to meet demand. A recent study estimated that 1mn people in the UK are borrowing money from loan sharks, yet the community lending sector is ready to scale up and, with further funding, could get this money to work very quickly.

Plugging this yawning gap in the financial system seems a fitting use of customers’ unclaimed money. However, I also believe very strongly that more should be done to find the owners of these lost assets and help people search for what is rightfully theirs.

Take my friend Gail, for example. She’s self-employed, and remembers setting up a pension 15 years ago with an unexpected £5,000 windfall.

Two children and several house moves later, the original paperwork has been lost. The provider Gail thinks she opened her pension with is long gone, swallowed up by a much larger pensions giant — and it says there’s no record of her ever having been a customer.

It’s entirely possible that you have had a similar experience searching for your own assets, or those of a deceased family member (do tell me in the online comments).

While providers have a regulatory obligation to try to reconnect with holders of “dormant” accounts, the estimated £50bn of unclaimed assets suggests they’re not trying hard enough.

If, like Gail, you’re trying to track down a lost account your options for doing so are narrowing.

Experian’s Unclaimed Assets Register is due to close at the end of August after 20 years (apparently, it’s no longer a priority area for the business). Until then, consumers can still pay £25 to search its database of 4.5mn records from around 80 financial providers. Ironically, Gail had never heard of it — and I wonder how many more might have been put off by the upfront charge.

Gretel, a new digital provider named after the breadcrumb-based search techniques of Hansel and Gretel is free to search, as its business model relies upon charging providers to list. It has estimated there is £50bn out there, waiting to be found.

However, it is still in the process of persuading more financial institutions to sign up. It has already matched £2mn of the £3bn of assets on its platform since it launched 12 weeks ago, and once you’ve registered your details, it will keep on searching as more records are added. However, if you’re going through probate, it won’t be possible to search for records relating to deceased family members until later this year.

There is no obligation for financial providers to list their dormant customer databases with centralised services such as these — but I think it’s high time there was.

The search market is piecemeal and hard for consumers to navigate. UK Finance operates the free “My Lost Account” service for bank and building society accounts, but I found this extremely clunky (and you need to know which bank your lost account was with).

The Association of British Insurers has a useful list on its website showing which pension companies have merged with which — but then it’s up to you to turn detective.

The Investment Association has an “unclaimed assets portal” on its website, but it turns out this is powered by Gretel.

It took me around 10 minutes to set up a profile on Gretel, entering all of my previous addresses (tip — look through your Amazon account if you can’t remember the postcodes), plus national insurance number, previous names and a copy of my marriage certificate (it makes you wonder how much harder it is to find married women who have changed their names).

I’ll be doing the same for my friend Gail at the weekend — and further into the future, I hope the much-vaunted “Pensions Dashboard” reunites more customers with the £37bn that’s apparently unclaimed.

“At the moment, we get more inquiries about people trying to find lost shares than anything else,” says Duncan Stevens, Gretel’s chief executive and co-founder. He puts this down to the generation of investors who benefited from “Tell Sid” and big demutualisations getting older, making wills and dying.

Often, their families struggle to track down these lost investments — but when they are found, they can be substantial. In the past, he’s reunited people with six- or seven-figure sums boosted by capital growth and dividend income for all the years they have been lost.

I would encourage FT Money readers to take part in the consultation, which closes in early October. But here’s one final suggestion from me.

In a spin-off of my favourite TV programme Long Lost Family, I’d love to see Davina McCall and Nicky Campbell travel the length and breadth of the UK, tracking down the beneficiaries of lost cash and reuniting families with life-changing sums of money.

“Long Lost Bank Account” would not only be a sure-fire ratings winner, but raise awareness of this £50bn problem while shaming financial providers into making it much easier for us to find our money.

Claer Barrett is the FT’s consumer editor: claer.barrett@ft.com; Twitter @Claerb; Instagram @Claerb

I have submitted a response to the consultation — and I would urge FT Money readers to do the same.