Adopting a more proactive approach to estate planning & supporting vulnerable individuals better
By Ben Furlong, Customer Services Director, Estate Search
In the UK we face a challenge! It is estimated that there are over £200 billion in unclaimed assets in the UK. This includes £1.45 billion and rising in banks and building societies[1], £3.4 Billion in National Savings and Investments, and £640 Million in dormant share registrations[2]. Furthermore, there is thought to be anywhere between £15 billion and £200 billion in unclaimed pension pots and life insurance policies[3].
So, what does this mean? For consumers, it’s easy to forget a company pension that was set up years ago or that premium bonds that were purchased in the dim and distant past. However, with the cost-of-living crisis continuing to escalate it is even more important that people protect and keep track of their assets, and this means people need to pay more attention to planning ahead for what happens to their assets when they are gone.
As a legal technology company for private client solicitors, Estatesearch often helps legal firms working on bereavement and loss of mental capacity cases. As one of the founders of the Vulnerable Banking Group, we have long been advocates of protecting those who are most at risk, particularly when it comes to uncovering unclaimed or forgotten assets to ensure beneficiaries receive funds that are rightfully theirs when a relative passes away.
Having a Will in place can certainly make this process easier. However, we recently commissioned a survey of 2,000 UK residents conducted by independent market research firm Danebury Research and found that less than half (47%) have a Will and of these, less than a third said that it was up to date (28%). The survey highlights the real challenges which families and their executors face when it comes to identifying and locating the assets of the deceased.
We also found that there is a clear gender disparity with well over half of male respondents confirming they have a Will (54%) compared with only 41% of women.
Further, we found that more than half (52%) of respondents hadn’t or didn’t know if their Will had been registered with a Will registry service. In London, this was only 36%. We also found that if a spouse or significant other passed away, 35% of respondents said they would not be able to locate all their assets.
Asset and liability searches offer a solution. On behalf of one solicitor, our asset and liability search recently identified an unknown bank account containing over £75k, and this meant those funds were rightfully distributed to the beneficiaries rather than remaining forgotten. We believe financial organizations must work more closely with technology companies to help protect the interests of their customers in such cases, particularly those customers who are classed as vulnerable, for example following a bereavement or loss of mental capacity.
The good news is that the FCA’s new Consumer Duty principle promotes higher and clearer standards of consumer protection across financial services and comes into force on 31 July 2023, and so from this date, it becomes essential that organizations work together to deliver good outcomes for customers and support them despite a limited approach to estate planning.
One example of such collaboration is the Application Program Interface (API) we have recently developed which removes the burden of data handling for financial institutions, allowing the individual institutions to filter their own data by relevance to the asset request automatically and see very quickly where any further investigation is required. Results are returned securely to our online portal, typically within 24 hours. This reduces the resources needed by banks to respond to requests and benefits representatives trying to identify and locate financial profiles of a deceased or vulnerable person’s estate. Estatesearch has already delivered the API to two major high street banks, allowing them to implement the automation tool into their own databases and cut weeks off the administration time of profile searching.
Through a combination of advances in technology and a best practice approach to asset searches we can work together to ensure all beneficiaries, particularly those that are considered vulnerable, are treated fairly and receive what is rightfully theirs, regardless if there was a will or not.
Sources:
https://www.reclaimfund.co.uk/about-us/financial-information
www.fca.org.uk/publication/thematic-reviews/tr16-02.pdf
