Sam Dunn: The £15bn that has fallen off our radar

How on earth can we forget about our own cash? We spend a huge part of our lives toiling to earn a living, so surely we wouldn't mislay or overlook our well-deserved rewards?

How on earth can we forget about our own cash? We spend a huge part of our lives toiling to earn a living, so surely we wouldn't mislay or overlook our well-deserved rewards?

Yet we do - lots of us do. Some £15bn of unclaimed assets is sloshing around in the nation's savings accounts, pension funds, endowment policies, shares, National Savings accounts and sundry other investment vehicles. These "orphan" assets largely comprise money left behind when the owner has died, or forgotten funds lying dormant in accounts.

A tiny part of this mountainous sum nearly ended up being contributed by my own sister, who, for several years, simply forgot she had nearly £5,000 tucked away in a savings account.

Caught up in a fraught house move that led to a breakdown in communication with her bank, the sum slipped her mind.

It was only two years ago, when calculating how much cash she would need for a deposit on a home, that she came to the shock realisation. She rushed to retrace the money and has since spent it.

Her excuse - moving address and forgetting to let everyone know - is one of the most common reasons why banks have lost touch with their customers and such a huge national sum has built up over the years.

Another ready source of this unwanted income is older people investing for their grandchildren, forgetting to tell their own children and then dying. Many also put money aside for others and go to the grave without making a will.

Knowing where it comes from is one thing for the banks; what to do with it is quite another.

For years, it's been a case of relying on members of the public to come forward, unsure of what they may - or may not - have tucked away.

But the public themselves now have help at hand. For example, the Unclaimed Assets Register, a commercial organisation that charges a fee, will scour old accounts for you across all financial bodies - life companies, share registers, banks and building societies.

If it's a long-lost pension, you can do your own search free of charge by contacting the Pension Service at www.thepension-service.gov.uk.

Other institutions, such as National Savings & Investments and the banks themselves, will of course help you if approached. But it's all one-way traffic.

Lose your money in tragic circumstances or simply lose sight of it, and there's little chance that you or the rightful owner will get it back.

If a parent building up a savings account for a child were to die, and the cash dropped off the radar, it may well be that the investment and the child will never be reunited.

This shameful state of affairs has rumbled on for far too long, and that has suited the financial services industry.

Money left with these companies has been free to accumulate in value and, in many cases, be used to the institution's financial advantage.

There may be a glimmer of hope, though.

Talks between the Treasury, officials from financial institutions and industry trade bodies aimed at overturning this status quo have been grinding on during the past 12 months, spurred by rumblings for change from Chancellor Gordon Brown.

These appeared very publicly in his 2004 Budget, when he said that where "assets and owners cannot be reunited, it is also right that [they] be reinvested in society, as long as the original owners' entitlements to reclaim are preserved".

Quite where the negotiations are going remains hazy, however. Financial institutions - and banks, in particular - reckon everybody has overestimated the amounts in orphan funds.

A dense bundle of legal and accounting points are also waiting to be unpicked.

In whatever future way they're put together again, they need to allow both the preservation of an individual's inalienable right to their money and better use to be made of it in the time it remains unclaimed.

Mr Brown's use of the word "'community" in terms of orphan assets in the same Budget speech prompted much speculation that charities would be heavily involved in this grand redistribution scheme.

This solution is supported by the Balance Charitable Foundation body set up to look at ways of releasing the £15bn to charity. It is also backed by a raft of insurance brokers, accountants and lawyers.

However, as with the other negotiations, progress has been slow.

To be fair, the general election has muddied the waters.

If Labour is re-elected, the party's manifesto makes it clear that it wants financial institutions to kickstart a pro-active process of reuniting owners with their lost cash.

In the event of no claims being made, the institution is to channel the funds into the community instead.

The Conservative manifesto proposes to use the money to top up the pension funds of companies that go bankrupt and leave their workers short of their retirement earnings.

The Lib Dems made no manifesto statement but back Labour's policy.

Whatever the outcome, it's to be hoped that the winners will no longer be the banks.

s.dunn@independent.co.uk