Government announces new cost of living funding from dormant assets

The government has announced that £76m of so-called dormant assets, will be used to provide additional support with living costs and help fund energy saving schemes.

Dormant assets are financial assets left untouched for long periods, such as forgotten bank and building society accounts. Led by the financial services industry and backed by the government, the Dormant Assets Scheme aims to reunite people with these lost funds. Where this is not possible, it can be transferred to the Dormant Assets Scheme to be distributed to social and environmental initiatives.

Beneficiaries include no-interest loans for 69,000 individuals struggling with finances via a £45m grant distributed by Fair4All Finance, a not for profit organisation set up in 2019 by the Department for Culture, Media and Sport and funded by the Dormant Assets Scheme.

In addition, charities and social enterprises will receive support from a £31m funding pot, distributed by social investors Access and Big Society Capital, to retrofit premises with more efficient energy systems, such as new boilers or heat pumps, solar panels, and new lighting.

An estimated £738m more will be made available over time thanks to the expansion of the Dormant Assets Scheme to new sectors such as insurance and pension assets, investment and wealth management, and securities.

The government has also announced that community wealth funds will become an additional beneficiary of the Dormant Assets Scheme. A community wealth fund is a pot of money distributed to communities in deprived areas and released over a long time period, with local residents able to make decisions on how to use the money.

The government will shortly launch a public consultation to gather public and industry views on the overarching design of this new initiative.

Youth, social enterprises, and people in financial difficulty will continue to be supported, with previous beneficiaries including community centres and charities providing care for the socially isolated and elderly.

Culture Secretary, Lucy Frazer said yesterday that the government were announcing that millions of pounds will be redirected from dormant accounts ‘to help the most vulnerable in society deal with the cost-of-living’. 

She added: ‘This will have a real impact on people’s lives, help alleviate debt and provide money saving solutions for charitable organisations.’

David Knott, Chief Executive of The National Lottery Community Fund, said: ‘As the distributor of dormant assets, The National Lottery Community Fund sees first-hand the life changing difference this funding makes.

‘I welcome the Government’s plans to include community wealth funds alongside existing causes. This reflects The National Lottery Community Fund’s experience of funding and supporting communities over decades. I look forward to turbo charging efforts through this expansion.’

Photo by Nick Kane