How can charities benefit from dormant assets

Launched in 2011, the Dormant Assets Scheme has long been a valuable source of money to the charity sector.

The Scheme was set up to redistribute millions of pounds left in dormant bank and building society accounts to good causes.

 

When government legislation expanded the Scheme 11 years later to include a raft of other financial sectors, it became even more important. Early in 2025, it was revealed that the scheme had reached the £1bn fundraising milestone in its first 14 years of supporting charities, which further underlines its importance to the sector.

 

Here we look at the evolution of the scheme and which sectors are set to benefit from its latest set of priorities.

 

 

Dormant Assets Scheme

 

The Dormant Assets Scheme was introduced by then Labour prime minister Gordon Brown through the Dormant Bank and Building Society Accounts Act 2008 and was launched three years later.

 

The scheme is voluntary for financial institutions involved and it is run by government-owned company Reclaim Fund Ltd, which invests a portion of the money involved so that people can always be reunited with their assets at any point in the future.

 

Since its launch more than 45 banks and building societies have joined the scheme. Dormant money can only be redistributed to charities when it is untouched for a minimum of 15 years and the financial organisation involved has been unable to trace the owner.

 

Among the redistributed funds over the years, £150m was allocated to support COVID-19 recovery.

 

When the Scheme was a decade old the government noted that “significantly fewer funds” were “flowing through the system each year” so in 2016 it was decided it needed to expand.

 

Through the Dormant Assets Act 2022, it opened to other sectors within financial services, starting with dormant money in insurance and pension accounts in June 2023, with other new sectors, including investments, wealth management, and securities, to follow.

 

 

Priority areas of funding

 

The UK government had estimated the expansion would provide £350m for good causes. But in June 2025 the Department for Culture, Media and Sport (DCMS) announced an extra £90m would be available, to ensure £440m goes to good causes by 2028.

 

This will be shared by organisations working in four priority areas. Charities are being urged to take note of these priorities if they want to access initiatives being funded through dormant assets.

 

 

Youth support

 

Using the money to support youth is a key aim of the Scheme, with £132.5m to be used “for the provision of services, facilities or opportunities to meet the needs of young people”.

 

Within this the government hopes dormant cash will be used to increase disadvantaged young people’s access to “enrichment opportunities in the arts, culture, sports, and wider youth services”. This includes a focus on young people’s employability and wellbeing.

 

Fostering a “culture of reading” among young people and access to “music-making and performance” are also a focus. Another is supporting children in care and care leavers to ensure they have access to enrichment activities as well as job and mental health support.

 

The National Lottery Community Fund is a key player in this strand of funding. The government has said it will work with the funder to design specific programmes and leverage additional private and philanthropic investment.

 

 

Financial inclusion

 

Helping people to better manage their finances is another priority. This will also receive £132.5m in funding over the next three years. This aims to support those who are financially excluded and “underserved consumers to access affordable and useful products and services”.

 

“As low-income families struggle to build savings and access affordable credit, they are less able to manage unexpected financial shocks which puts them at significantly greater risk of problem debt and leaves them more likely to use loan sharks,” the government warns.

 

Fair4AllFinance, which specialises in supporting such communities, will deliver the work. Improving financial inclusion has been a long-standing priority area of the Scheme and since 2020 work by Fair4AllFinance through dormant assets has saved customers an estimated £29m in interest fees.

 

 

Social investment

 

A total of £87.5m will be allocated for social investment from 2025 to 2028, with £12.5m used to reach organisations that support young people. The money will be used to leverage private investment and philanthropic finance to boost money available for community projects.

 

Areas blighted by long-term economic decline is a focus, with half of investment aimed at the 30% most deprived neighbourhoods. At least a quarter will go to the most deprived 10% of neighbourhoods.

 

This strand of work will be delivered by Access – The Foundation for Social Investment.

 

 

Community Wealth

 

Another £87.5m will be set aside for Community Wealth Funds, which invest money into disadvantaged neighbourhoods to support the development of services and facilities. 

 

This is being delivered by The National Lottery Community Fund and is based around a mission of “kickstarting economic growth”. Typical initiatives it will fund include employability training, providing community breakfast clubs, and funding mentoring schemes.

 

Crime reduction is another element of this funding. An example the government gives of an initiative that has already received dormant asset funding is the Good Shephard Centre in Bradford, which provides a ‘safe neighbour HUB’ for people to report hate crimes and receive practical support.