The Government has published legislation allowing it to use money in dormant bank accounts for charitable purposes.
In response to a recent inquiry from the Department of Finance, banks and building societies have estimated there is £140 million in dormant accounts.
Money in these accounts, unused for more than 15 years, will be placed in a fund run by the National Treasury Management Agency, according to the Dormant Accounts Bill, 2001.
The objective of the Bill is to put account-holders, or their heirs or successors, in touch with their dormant funds, according to a statement from the Department of Finance.
The scheme, which begins next April, will oblige banks, building societies and the Post Office Savings Bank to make contact with all customers who have accounts where there has been no customer-initiated transaction for 15 years or more. Savings bonds, savings certificates and instalment savings schemes will also be covered by the legislation, but it will not include Prize Bonds.
Banks will be required to make "best efforts" to contact account-holders, in many cases by writing to that person at the last known address. They must also bring the scheme to the attention of the public, using advertisements in national daily newspapers, every year.
These will inform all other customers of the procedure should they wish their funds to be retained at the bank or building society. "In that way, customers with low-value accounts, who haven't been personally notified by their bank or building society, as well as the elderly or the infirm, will be informed of their rights in relation to their accounts, and of what they should do to get any further information they may require," said the statement.
If the owners of accounts dormant at the end of March 2002 do not reclaim their money by the end of March 2003, it will be transferred to a Dormant Accounts Fund.
This is to be established and managed by the National Treasury Management Agency. However, the beneficial owner of the money will have a guaranteed right of reclaim to their property at any time.
As well as meeting claims for refunds from owners, the agency will also make payments under a scheme of disbursement.
The Minister for Social, Community and Family Affairs will appoint members to a board whose remit will be to oversee a scheme for the payment of surplus dormant account funds, based on guidelines given by the Minister.
This addresses the recommendations of the Public Accounts Committee, in its DIRT inquiry report, that dormant funds be "used for specific purposes of societal and community benefit".
"In effect, surplus monies will be used to fund programmes or projects designed to assist those who are educationally, physically, socially or economically disadvantaged," the statement said.
The initial legislation will be confined to accounts held in banks and building societies, but it is intended that the scheme will be extended to other institutions.
A follow-up Bill, said the statement, would be brought forward later this year to cover the more complex area of mature but unclaimed life assurance policies.