Select Committee on Treasury Written Evidence


APPENDIX 1

OUR CALCULATIONS OF THE POTENTIAL TOTAL OF UNCLAIMED ASSETS OWED TO CHARITIES

  Our estimate of the value of unclaimed assets owed to charities from their legacy estates is in the order of hundreds of millions of pounds. In order to reach an estimate, we are forced to use approximations based in part on US comparison, since many of the financial institutions which are holding unclaimed assets do not publish their value. We show below how we have reached this estimate.

STEP 1: THE DEFINITION OF AN UNCLAIMED ASSET

  We use a wide definition of unclaimed assets which includes all categories of financial investments, including dormant bank accounts, unclaimed stocks and shares, forgotten insurance and pension investments, together with the contents of deed boxes etc lying unclaimed in banks' safe-keeping.

STEP 2: ESTIMATING THE TOTAL VALUE OF UNCLAIMED ASSETS IN THE UK

  Estimates of the value of unclaimed assets in the UK vary widely. This is because financial institutions refuse to disclose the value of the unclaimed assets they are holding and because definitions of unclaimed assets vary.

  To estimate the total value of unclaimed assets, we have used the US model as our base, for in that country unclaimed property Consumer Protection legislation has been in operation for over thirty years, and a public, searchable register of unclaimed property is made readily available by each State—see www.unclaimed.org. Our estimate, using the US example, is that there are approximately £30 billion of unclaimed assets in the UK, albeit that officials working in unclaimed property in the US have expressed the view that our figure is conservative.

  Additional support for our estimate comes from a number of sources. The commercial and voluntary Unclaimed Assets Register estimates that there is at least £15bn of unclaimed assets held in the UK. At the other extreme, media articles in recent years have claimed there are £125bn of unclaimed assets. And research into the FTSE 100 companies suggests at least £1 billion of unclaimed shares is lodged with companies trading on the London Stock Exchange.

STEP 3: ESTIMATING THE PROPORTION OF UNCLAIMED ASSETS OWED TO CHARITIES

  We estimate that approximately two-thirds of unclaimed assets in the UK belong to deceased person's estates, since these lost assets have been accumulating over generations. Using our estimate of £30 billion of unclaimed assets, the value of the two thirds of unclaimed assets belonging to deceased person's estates would be £20 billion.

  Approximately £1 in £20 bequeathed by UK legators is gifted to charity. Therefore £1bn could be due to our charities—this is almost the total value of one full year's legacies left to all UK charities. In addition, the value of unclaimed assets lost to our charities increases daily as new Wills are proven and their executors fail to locate all of the assets owned by our legators.

  Our estimations therefore leave us to conclude that we can support the statement that there are "hundreds of millions of pounds" of unclaimed assets owed to charities.

  Total value of unclaimed assets owed to charities from bank and building society accounts.

  The estimates recently provided by the British Bankers' Association and Building Societies' Association put the total value of unclaimed assets from this sector at £300-£500m, and this figure has been accepted by HM Treasury. Using the same calculation as above, this would mean that the potential charitable income from this group of asset totals between £10m and £23m.

February 2007



 
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