By Andy Davies, Financial Institutions Relationship Manager at Estatetrace
Unclaimed Premium Bonds in the Spotlight
Wills and probate solicitor Patrice Lawrence recently commented in an article about unclaimed Premium Bonds penned by Alex Homer from the BBC Premium Bonds: Unclaimed prizes from NS&I draws pass £100m – BBC News.
“It’s shocking that a government-owned bank is sitting on nearly £100m [in unclaimed prizes] that doesn’t belong to it during a cost of living crisis,” Patrice told the BBC.
Why So Many Premium Bond Prizes Remain Unclaimed
The conversation between the BBC newsreaders continued, one asking, “If NS&I know about 11 people [Premium Bond Winners], why don’t they contact them?”
Response: “Chances are people from a long time ago have moved or sadly some may be deceased.”
And this is the challenge. The current reliance is on the next of kin finding paperwork while there is £105 million unclaimed Premium Bonds winnings which should be back in the economy.
So, why are firms doing the bare minimum when there are tracing services out there?
Tracing Services Can Reunite Owners with Their Premium Bond Winnings
The answer is simple. Investment and a proactive plan are needed to trace customers.
At Estatetrace, we offer tracing services for financial institutions where customers have become disengaged or have gone away. While we have a high discovery rate to find these gone-away customers, we are also able to support financial institutions in demonstrating that they have made all reasonable endeavours to trace a customer and repatriate them with their assets. This means funds can be transferred to things like the Dormant Assets Scheme, if this is appropriate, their own nominated charity, or archived on their systems.
Beyond Premium Bonds: Billions in Unclaimed UK Assets
Ollie Wright, Head of FI Team at our parent company Estatesearch responded on LinkedIn about the BBC’s article (https://www.linkedin.com/feed/update/urn:li:activity:7358518916408590336/). He asks Rt Hon Rachel Reeves to “imagine £105 million back in the economy”. It is a great point but the problem goes far deeper than this.
It is the pure scale of the issue that is the greatest challenge. In fact, the NS&I premium bond issue is just the tip of a very large iceberg. In NS&I’s most recent annual report and audit they confirm that £3 Billion is currently held in their closed products or in accounts where they have not had contact with customers for more than 15 years. And NS&I is not alone. There are many banks and other financial institutions where assets have become lost in the system, where customers have moved house and mis-laid the paperwork or they have passed away. The scale of the problem is immense. Our team regularly present about ‘Britain’s Milling Billions’. No one knows precisely how much money has become ‘lost’ in UK banks and other financial institutions. Estimates put it around £200 Billion but whatever the true figure is, it is large.
How Enhanced Tracing Delivers Better Results
NS&I reported they had used a credit reference agency a few years ago and were able to trace around 10% of a sample of 100,000 ‘gone away’ customers. This is a positive step in the right direction, and similar to where other financial services firms make a start, but far more could and should be done.
Using an enhanced tracing service such as Estatetrace can yield results of up to 80%, where we are able to provide updated contact details or pass on information about executors if a customer has passed away so beneficiaries can receive what is rightfully theirs.
We work with many leading financial services firms and other forward-thinking organisations that are now taking a proactive approach to managing the integrity of customer data. This work to trace and update records ensures better outcomes for customers and can make a significant contribution to putting money back into the pockets of consumers (and therefore the economy), or moving assets to the Dormant Asset Scheme or charity for beneficial projects.
A Call for Action on Unclaimed Premium Bonds and Assets
I wholeheartedly agree with Patrice Lawrence. It is indeed shocking that such significant sums are not being repatriated with their rightful owners, particularly during such difficult economic times. However, the NS&I Premium Bond example is just a tiny proportion of the unclaimed assets in the UK, which could be put to better use to benefit the economy as a whole.
I would love to see more financial institutions undertake projects to trace gone away customers so that money can be spent or put to better use. In relation to NS&I, Rt Hon Rachel Reeves imagine £3 billion back in the economy.
Patrice Lawrence has set up a petition to review how NS&I contact Premium Bond prize winners, see https://petition.parliament.uk/petitions/714919