Australians spend close to $6 million each week on scratch lotto tickets in the hope of picking up some extra cash. Yet billions of dollars of forgotten money is sitting in government coffers just waiting to be claimed. Some of it could be yours.
Our money watchdog ASIC says there is a pool of $1.2 billion in unclaimed bank accounts, life insurance, shares and other investments.
It’s hard to fathom how people can lose track of what are, in some cases, significant sums of money. But if you’ve ever moved without letting the bank know your new address chances are you could have some forgotten cash.
Money held in bank accounts becomes 'unclaimed' if the account hasn’t been used for seven years and contains a balance of $500 or more.
ASIC’s database of unclaimed bank accounts extends back to 1989 for savings account and 1959 for trading accounts. Records of unclaimed life insurance policies go as far back as 1952.
Since mid-2013, unclaimed money has been earning interest. So you could have a tidy nest egg you may be unaware of. While many of the unclaimed amounts are for a few hundred dollars, plenty of people are owed sums in the tens of thousands. In some cases, the forgotten balances run into hundreds of thousands of dollars.
The lost money held by ASIC is always claimable by the rightful owner - there is no time limit on claims. So it’s worth taking a moment to check if you have any forgotten money – it costs nothing. Just head to the government’s MoneySmart website and click on Tools and resources. The site also explains how to reclaim lost funds. Last financial year, over $158 million was paid out to more than 25,000 people.
If you draw a blank with the ASIC database, head to your state or territory revenue website. State governments hold other types of unclaimed money like dividends, salaries and wages and rental bonds.
Amazingly, the pool of lost money doesn’t stop there. More than six million super accounts totaling around $16 billion, is managed by the Tax Office. If it turns out you have some forgotten super, think about folding the balance into your main super fund. It’s a simple way to save on fees and stay in touch with your super throughout your working life.
Recently, I thought I had better take my own advice and do a search. To my surprise I found lost dividends from a share I own, the cheques had gone to an old address. I reclaimed over $1,000 and of course updated my address with the share registry.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
Sorting out your finances is something we know we should do, but can easily be pushed aside in favour of more appealing activities.