Dormant bank accounts

Find out more about why inactive bank accounts become dormant, what you need to do to reclaim your money and what happens to unclaimed funds.

If a current account or savings account is left inactive for a specified period of time it will be declared dormant by the bank, meaning it's inactive or no longer in use.

But if there's any money left in it, you may still be able to track down the account and reclaim any funds.

Why does an account become dormant?

If you don't use your account for a long period of time the bank or building society may declare it dormant, but the length of time before this happens will vary between institutions.

It could be as little as 12 months for a current account, three years for a savings account, or in some cases up to 15 years.

Check the terms and conditions of your account if you need to find out how long you have before it becomes dormant.

There are a variety of reasons why you might stop using an account, causing it to become dormant.

Childhood accounts

If an account has been opened for you as a child, you may have forgotten about it when you started using an adult bank account.

The paperwork might be with the person who originally opened the account, for example a parent or guardian.

Moving home

There are many things to think about when you're moving house, but it's important to remember to change addresses with your bank.

If you haven't done this and you have a lot of different accounts open at the same time, you may accidentally forget about one.

A bank might mark an account as dormant sooner if mail is returned to it declaring that the account holder no longer lives at that address.

Closing down dormant accounts can help prevent identity theft and fraud.

If your bank or building society is trying to contact you at your last known address and you don't live there any more, your confidential account and personal details could be found and used by someone else.

Lost paperwork

Accounts opened a while ago where you've lost the necessary paperwork may be difficult to locate.

How to avoid your bank account going dormant

Preventing your account from going dormant is simple really - you need to use it, or lose it. Any account activity will stop it becoming dormant.

It can be as easy as ringing the account provider and asking for a balance, as this is classed as activity. Alternatively you can pay in a small amount, or make a withdrawal.

How banks attempt to prevent dormant accounts

A bank is required to try to track you down before declaring that an account is dormant and this will normally be done by sending a letter to your last known address.

If you can't be reached, or the letters and statements are returned unopened, then it'll try to reach you any way it can, via other contact details you provided previously.

Note that if the amount left in the account is less that £25, you may not be contacted about your account being declared dormant.

Finding lost accounts

There are several routes to tracking down dormant accounts, even if you last used them several years ago.

Talk to your bank

The first port of call if you think you may have a dormant account is to contact the bank or building society. It should be able to check on the status of your account and help you to access your funds.

Search with My Lost Account

If you've lost track of an account, you can use My Lost Account to help you find any you hold, including dormant ones.^†

It's a joint venture by the British Bankers' Association (BBA), Building Societies Association (BSA) and National Savings and Investments (NS&I). This free service helps connect people with their lost accounts.

The BBA covers most banks in the UK, the BSA covers all UK building societies and the NS&I will cover all National Savings and Investments products, including the old Post Office Savings Bank accounts.

You can trace accounts that are covered by any of these three organisations by filling out an online application form.

The application form will ask you for basic information such as the account holder's name, account type, account numbers and sort codes.

Note that it's not necessary to answer all the questions, but if you do have any details it could help to speed up the process.

You'll learn the outcome of your search within three months, but it may take a lot longer to actually recover the money.

If your claim is valid you'll be sent the balance of the account and information on how you can access the funds.

Interest on dormant accounts

If your account has been declared dormant, you could have missed out on interest accumulated on your savings during its dormant period. However, you're still entitled to it and you should be fully reimbursed.

Unclaimed funds and the Reclaim Fund

If money goes unclaimed for 15 years or more, it can be collected by the Reclaim Fund.^†

This was established in 2011 by Co-operative Financial Services on behalf of the banking industry to administer dormant funds.

The Reclaim Fund collects money from bank or building society accounts that have been dormant for over 15 years and passes it on to the Big Lottery Fund to be allocated to good causes and social enterprises throughout the UK.

However, Reclaim Fund keeps back a portion to reimburse account holders who might come forward to reclaim their dormant funds in future.

By the end of 2014 the amount transferred by the Reclaim Fund to the Big Lottery Fund was more than £220m.

Note that you can't recover money directly from the Reclaim Fund - this will need to be done by contacting your account provider and arranging it through them.

Reclaiming deceased relatives' dormant funds

If a family member has passed away and left money in an account, you may have the right to access it, but the account or investment provider will need to confirm your identity and make sure that you're the correct person to receive the funds.

Where there's a will and a straightforward family situation with no other claims to be investigated, it should be a pretty easy process.

If the reclaim is a large amount or the funds are being contested, it'll take longer.

Problems reclaiming dormant funds

If you feel your bank has failed to locate dormant account funds for you, you should complain to it in the first instance.

If the bank can't resolve your complaint within eight weeks, you may be able to take it to the Financial Ombudsman.^†

By Abbie Laughton-Coles

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