The IT industry is one of the biggest industries of the 21st century. It mainly employs younger people who have the right skills and know-how needed to get the job done. Every time you move from one company to another, you get a new salary account. The account you used in your previous company stops being used and is all but forgotten.
Have you ever thought about what happens to your old accounts if you don’t close them? Well, keep reading, and we’ll tell you everything you need to know about unused funds and why you need dormant accounts advisors in UK to help you get the most out of them.
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What Is a Dormant Account?
Every bank account that hasn’t been used for at least two years is called a dormant bank account. Many people think that inactive accounts are the same thing as frozen accounts, but that’s not true. These accounts can still be used, but only after you contact the bank and ask for their reactivation. Banks don’t close unused accounts; they take them out of the system to prevent fraud and other crime forms.
Dormant accounts may still hold the money you didn’t withdraw while they were active, but you can still get it after contacting your bank. You usually have to provide your ID as proof, and the bank will grant you access to your inactive account in a matter of minutes.
Why Do Bank Accounts Become Dormant?
Most accounts become dormant once all activity stops. When you stop making payments, deposits, and withdrawing money, the bank will label the report as inactive. However, before that happens, they will contact you via phone or email to ask you about your plans with the account. If they can’t find you, the account will be “frozen” until you contact the bank.
Accounts become dormant to prevent potential frauds and scams, identity thefts, and so on. If you don’t use the report for a few months, the bank removes it from the system, making it impossible for criminals to abuse it. It locks the account, preventing anyone from using it, including yourself. Again, you can access your dormant account in the future by contacting your bank first.
What Happens With Unclaimed Dormant Accounts?
Banks hold on to all dormant accounts for at least 15 years. If no one claims them after that time, banks withdraw the money and transfer it to the Reclaim Fund, making donations to those in need. Since 2011, UK banks have donated over 600 million pounds from dormant accounts to charity and those living in poverty. Even if your money ends up in the Reclaim Fund, you can still get it back after you contact the bank.
How Can You Reclaim Your Funds?
If you have funds on a dormant account, you can reclaim them anytime you want by going to your bank or building society account provider. You will have to provide as much information as possible to prove that the account belongs to you. That includes:
- The number of the account
- Your name
- Account balance
- Any statements you can provide
Keep in mind that the more information you provide, the faster the process will be. If you’re not sure about the account’s details, the bank will trace it back to you using the MyLostAccount service.
When they verify your profile, the bank will use various filters to find your account. Finally, you will receive an email or a letter informing you about your account and whether you have to provide additional information. The process can take up to three months, so try to provide as much information as possible to speed things up.
Reclaiming Dormant Funds of Relatives And Family Members
If your relative or family member has passed away and left some money in their account, you might be able to claim it. However, if the account still isn’t dormant, you might be unable to make a claim until the 15 years pass.
The process of reclaiming funds is the same as when you want to reclaim your account. You will have to provide as much information as possible, including a right to claim the money. The amount of money on the account also plays a role. If it has a lot of funds on it, you might have to go through a few extra security checks first. The process will take longer, but if everything checks out, you will be able to claim the money in the end.
Every dormant account can be reactivated within 24 hours if you simply go to the bank and provide the information they require. Even if you want to reactivate an account 20 years after losing it, the bank will quickly help you get your money back and make your account active once again. Not sure about your previous accounts? Call your bank and see if you have any funds you can withdraw.