diff --git a/cumulus/pallets/collator-selection/Cargo.toml b/cumulus/pallets/collator-selection/Cargo.toml
index 025a089b3c36601757a8d44f57044c9e0fcb5d04..34e0d94b976a9c34126d26bd50e52c2905f9f8e3 100644
--- a/cumulus/pallets/collator-selection/Cargo.toml
+++ b/cumulus/pallets/collator-selection/Cargo.toml
@@ -27,6 +27,7 @@ sp-staking = { path = "../../../substrate/primitives/staking", default-features
 frame-support = { path = "../../../substrate/frame/support", default-features = false, version = "32.0.0" }
 frame-system = { path = "../../../substrate/frame/system", default-features = false, version = "32.0.0" }
 pallet-authorship = { path = "../../../substrate/frame/authorship", default-features = false, version = "32.0.0" }
+pallet-balances = { path = "../../../substrate/frame/balances", default-features = false }
 pallet-session = { path = "../../../substrate/frame/session", default-features = false, version = "32.0.0" }
 
 frame-benchmarking = { path = "../../../substrate/frame/benchmarking", default-features = false, optional = true, version = "32.0.0" }
@@ -38,7 +39,6 @@ sp-tracing = { path = "../../../substrate/primitives/tracing" }
 sp-runtime = { path = "../../../substrate/primitives/runtime" }
 pallet-timestamp = { path = "../../../substrate/frame/timestamp" }
 sp-consensus-aura = { path = "../../../substrate/primitives/consensus/aura" }
-pallet-balances = { path = "../../../substrate/frame/balances" }
 pallet-aura = { path = "../../../substrate/frame/aura" }
 
 [features]
@@ -57,6 +57,7 @@ std = [
 	"frame-system/std",
 	"log/std",
 	"pallet-authorship/std",
+	"pallet-balances/std",
 	"pallet-session/std",
 	"rand/std",
 	"scale-info/std",
diff --git a/cumulus/pallets/collator-selection/src/lib.rs b/cumulus/pallets/collator-selection/src/lib.rs
index 84bde5c9fac9f640692458f02b37f0ee108a734f..296033f44447570703b80dd1f3f4527ed5b7b192 100644
--- a/cumulus/pallets/collator-selection/src/lib.rs
+++ b/cumulus/pallets/collator-selection/src/lib.rs
@@ -119,7 +119,7 @@ pub mod pallet {
 	use sp_std::vec::Vec;
 
 	/// The in-code storage version.
-	const STORAGE_VERSION: StorageVersion = StorageVersion::new(1);
+	const STORAGE_VERSION: StorageVersion = StorageVersion::new(2);
 
 	type BalanceOf<T> =
 		<<T as Config>::Currency as Currency<<T as SystemConfig>::AccountId>>::Balance;
diff --git a/cumulus/pallets/collator-selection/src/migration.rs b/cumulus/pallets/collator-selection/src/migration.rs
index 5dc2fba4279a9b04dc9f1866fb2c36ea1abde80c..425acdd8bfb59768241399e3be5efb44a13c8a74 100644
--- a/cumulus/pallets/collator-selection/src/migration.rs
+++ b/cumulus/pallets/collator-selection/src/migration.rs
@@ -17,9 +17,107 @@
 //! A module that is responsible for migration of storage for Collator Selection.
 
 use super::*;
-use frame_support::traits::OnRuntimeUpgrade;
+use frame_support::traits::{OnRuntimeUpgrade, UncheckedOnRuntimeUpgrade};
 use log;
 
+/// Migrate to v2. Should have been part of <https://github.com/paritytech/polkadot-sdk/pull/1340>.
+pub mod v2 {
+	use super::*;
+	use frame_support::{
+		pallet_prelude::*,
+		storage_alias,
+		traits::{Currency, ReservableCurrency},
+	};
+	use sp_runtime::traits::{Saturating, Zero};
+	#[cfg(feature = "try-runtime")]
+	use sp_std::vec::Vec;
+
+	/// [`UncheckedMigrationToV2`] wrapped in a
+	/// [`VersionedMigration`](frame_support::migrations::VersionedMigration), ensuring the
+	/// migration is only performed when on-chain version is 1.
+	pub type MigrationToV2<T> = frame_support::migrations::VersionedMigration<
+		1,
+		2,
+		UncheckedMigrationToV2<T>,
+		Pallet<T>,
+		<T as frame_system::Config>::DbWeight,
+	>;
+
+	#[storage_alias]
+	pub type Candidates<T: Config> = StorageValue<
+		Pallet<T>,
+		BoundedVec<CandidateInfo<<T as frame_system::Config>::AccountId, <<T as Config>::Currency as Currency<<T as frame_system::Config>::AccountId>>::Balance>, <T as Config>::MaxCandidates>,
+		ValueQuery,
+	>;
+
+	/// Migrate to V2.
+	pub struct UncheckedMigrationToV2<T>(sp_std::marker::PhantomData<T>);
+	impl<T: Config + pallet_balances::Config> UncheckedOnRuntimeUpgrade for UncheckedMigrationToV2<T> {
+		fn on_runtime_upgrade() -> Weight {
+			let mut weight = Weight::zero();
+			let mut count: u64 = 0;
+			// candidates who exist under the old `Candidates` key
+			let candidates = Candidates::<T>::take();
+
+			// New candidates who have registered since the upgrade. Under normal circumstances,
+			// this should not exist because the migration should be applied when the upgrade
+			// happens. But in Polkadot/Kusama we messed this up, and people registered under
+			// `CandidateList` while their funds were locked in `Candidates`.
+			let new_candidate_list = CandidateList::<T>::get();
+			if new_candidate_list.len().is_zero() {
+				// The new list is empty, so this is essentially being applied correctly. We just
+				// put the candidates into the new storage item.
+				CandidateList::<T>::put(&candidates);
+				// 1 write for the new list
+				weight.saturating_accrue(T::DbWeight::get().reads_writes(0, 1));
+			} else {
+				// Oops, the runtime upgraded without the migration. There are new candidates in
+				// `CandidateList`. So, let's just refund the old ones and assume they have already
+				// started participating in the new system.
+				for candidate in candidates {
+					let err = T::Currency::unreserve(&candidate.who, candidate.deposit);
+					if err > Zero::zero() {
+						log::error!(
+							target: LOG_TARGET,
+							"{:?} balance was unable to be unreserved from {:?}",
+							err, &candidate.who,
+						);
+					}
+					count.saturating_inc();
+				}
+				weight.saturating_accrue(
+					<<T as pallet_balances::Config>::WeightInfo as pallet_balances::WeightInfo>::force_unreserve().saturating_mul(count.into()),
+				);
+			}
+
+			log::info!(
+				target: LOG_TARGET,
+				"Unreserved locked bond of {} candidates, upgraded storage to version 2",
+				count,
+			);
+
+			weight.saturating_accrue(T::DbWeight::get().reads_writes(3, 2));
+			weight
+		}
+
+		#[cfg(feature = "try-runtime")]
+		fn pre_upgrade() -> Result<Vec<u8>, sp_runtime::DispatchError> {
+			let number_of_candidates = Candidates::<T>::get().to_vec().len();
+			Ok((number_of_candidates as u32).encode())
+		}
+
+		#[cfg(feature = "try-runtime")]
+		fn post_upgrade(_number_of_candidates: Vec<u8>) -> Result<(), sp_runtime::DispatchError> {
+			let new_number_of_candidates = Candidates::<T>::get().to_vec().len();
+			assert_eq!(
+				new_number_of_candidates, 0 as usize,
+				"after migration, the candidates map should be empty"
+			);
+			Ok(())
+		}
+	}
+}
+
 /// Version 1 Migration
 /// This migration ensures that any existing `Invulnerables` storage lists are sorted.
 pub mod v1 {
@@ -90,3 +188,136 @@ pub mod v1 {
 		}
 	}
 }
+
+#[cfg(all(feature = "try-runtime", test))]
+mod tests {
+	use super::*;
+	use crate::{
+		migration::v2::Candidates,
+		mock::{new_test_ext, Balances, Test},
+	};
+	use frame_support::{
+		traits::{Currency, ReservableCurrency, StorageVersion},
+		BoundedVec,
+	};
+	use sp_runtime::traits::ConstU32;
+
+	#[test]
+	fn migrate_to_v2_with_new_candidates() {
+		new_test_ext().execute_with(|| {
+			let storage_version = StorageVersion::new(1);
+			storage_version.put::<Pallet<Test>>();
+
+			let one = 1u64;
+			let two = 2u64;
+			let three = 3u64;
+			let deposit = 10u64;
+
+			// Set balance to 100
+			Balances::make_free_balance_be(&one, 100u64);
+			Balances::make_free_balance_be(&two, 100u64);
+			Balances::make_free_balance_be(&three, 100u64);
+
+			// Reservations: 10 for the "old" candidacy and 10 for the "new"
+			Balances::reserve(&one, 10u64).unwrap(); // old
+			Balances::reserve(&two, 20u64).unwrap(); // old + new
+			Balances::reserve(&three, 10u64).unwrap(); // new
+
+			// Candidate info
+			let candidate_one = CandidateInfo { who: one, deposit };
+			let candidate_two = CandidateInfo { who: two, deposit };
+			let candidate_three = CandidateInfo { who: three, deposit };
+
+			// Storage lists
+			let bounded_candidates =
+				BoundedVec::<CandidateInfo<u64, u64>, ConstU32<20>>::try_from(vec![
+					candidate_one.clone(),
+					candidate_two.clone(),
+				])
+				.expect("it works");
+			let bounded_candidate_list =
+				BoundedVec::<CandidateInfo<u64, u64>, ConstU32<20>>::try_from(vec![
+					candidate_two.clone(),
+					candidate_three.clone(),
+				])
+				.expect("it works");
+
+			// Set storage
+			Candidates::<Test>::put(bounded_candidates);
+			CandidateList::<Test>::put(bounded_candidate_list.clone());
+
+			// Sanity check
+			assert_eq!(Balances::free_balance(one), 90);
+			assert_eq!(Balances::free_balance(two), 80);
+			assert_eq!(Balances::free_balance(three), 90);
+
+			// Run migration
+			v2::MigrationToV2::<Test>::on_runtime_upgrade();
+
+			let new_storage_version = StorageVersion::get::<Pallet<Test>>();
+			assert_eq!(new_storage_version, 2);
+
+			// 10 should have been unreserved from the old candidacy
+			assert_eq!(Balances::free_balance(one), 100);
+			assert_eq!(Balances::free_balance(two), 90);
+			assert_eq!(Balances::free_balance(three), 90);
+			// The storage item should be gone
+			assert!(Candidates::<Test>::get().is_empty());
+			// The new storage item should be preserved
+			assert_eq!(CandidateList::<Test>::get(), bounded_candidate_list);
+		});
+	}
+
+	#[test]
+	fn migrate_to_v2_without_new_candidates() {
+		new_test_ext().execute_with(|| {
+			let storage_version = StorageVersion::new(1);
+			storage_version.put::<Pallet<Test>>();
+
+			let one = 1u64;
+			let two = 2u64;
+			let deposit = 10u64;
+
+			// Set balance to 100
+			Balances::make_free_balance_be(&one, 100u64);
+			Balances::make_free_balance_be(&two, 100u64);
+
+			// Reservations
+			Balances::reserve(&one, 10u64).unwrap(); // old
+			Balances::reserve(&two, 10u64).unwrap(); // old
+
+			// Candidate info
+			let candidate_one = CandidateInfo { who: one, deposit };
+			let candidate_two = CandidateInfo { who: two, deposit };
+
+			// Storage lists
+			let bounded_candidates =
+				BoundedVec::<CandidateInfo<u64, u64>, ConstU32<20>>::try_from(vec![
+					candidate_one.clone(),
+					candidate_two.clone(),
+				])
+				.expect("it works");
+
+			// Set storage
+			Candidates::<Test>::put(bounded_candidates.clone());
+
+			// Sanity check
+			assert_eq!(Balances::free_balance(one), 90);
+			assert_eq!(Balances::free_balance(two), 90);
+
+			// Run migration
+			v2::MigrationToV2::<Test>::on_runtime_upgrade();
+
+			let new_storage_version = StorageVersion::get::<Pallet<Test>>();
+			assert_eq!(new_storage_version, 2);
+
+			// Nothing changes deposit-wise
+			assert_eq!(Balances::free_balance(one), 90);
+			assert_eq!(Balances::free_balance(two), 90);
+			// The storage item should be gone
+			assert!(Candidates::<Test>::get().is_empty());
+			// The new storage item should have the info now
+			assert_eq!(CandidateList::<Test>::get(), bounded_candidates);
+		});
+	}
+}
diff --git a/cumulus/parachains/runtimes/assets/asset-hub-rococo/src/lib.rs b/cumulus/parachains/runtimes/assets/asset-hub-rococo/src/lib.rs
index f68d142fd5b89b7f2386f6eabf7040643f89a7d4..4f3162d9c26a75771c6901217d61ca9680cae535 100644
--- a/cumulus/parachains/runtimes/assets/asset-hub-rococo/src/lib.rs
+++ b/cumulus/parachains/runtimes/assets/asset-hub-rococo/src/lib.rs
@@ -962,10 +962,10 @@ pub type UncheckedExtrinsic =
 	generic::UncheckedExtrinsic<Address, RuntimeCall, Signature, SignedExtra>;
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
-	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
 	InitStorageVersions,
 	// unreleased
 	cumulus_pallet_xcmp_queue::migration::v4::MigrationToV4<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	// permanent
 	pallet_xcm::migration::MigrateToLatestXcmVersion<Runtime>,
 );
diff --git a/cumulus/parachains/runtimes/assets/asset-hub-westend/src/lib.rs b/cumulus/parachains/runtimes/assets/asset-hub-westend/src/lib.rs
index 4c5da99c8eaa0e1b19b506e03040bb6bb911e01e..3d5c5bd42725b76fb269ec1d75a4a9b92829c75e 100644
--- a/cumulus/parachains/runtimes/assets/asset-hub-westend/src/lib.rs
+++ b/cumulus/parachains/runtimes/assets/asset-hub-westend/src/lib.rs
@@ -938,7 +938,7 @@ pub type Migrations = (
 	// v9420
 	pallet_nfts::migration::v1::MigrateToV1<Runtime>,
 	// unreleased
-	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	// unreleased
 	pallet_multisig::migrations::v1::MigrateToV1<Runtime>,
 	// unreleased
diff --git a/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-rococo/src/lib.rs b/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-rococo/src/lib.rs
index e46820f50419df259c1b880d17619eb495ad0623..7b6af611c91d73e41136c445c9ed1431d1d4c9f0 100644
--- a/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-rococo/src/lib.rs
+++ b/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-rococo/src/lib.rs
@@ -139,7 +139,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
-	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	pallet_multisig::migrations::v1::MigrateToV1<Runtime>,
 	InitStorageVersions,
 	cumulus_pallet_xcmp_queue::migration::v4::MigrationToV4<Runtime>,
diff --git a/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-westend/src/lib.rs b/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-westend/src/lib.rs
index 71a41f6d8edd6d0215353f3de90f47189452e136..abc9c05f18d422ac5de409ccb95b8c3bf7939c2f 100644
--- a/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-westend/src/lib.rs
+++ b/cumulus/parachains/runtimes/bridge-hubs/bridge-hub-westend/src/lib.rs
@@ -118,7 +118,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
-	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	pallet_multisig::migrations::v1::MigrateToV1<Runtime>,
 	InitStorageVersions,
 	// unreleased
diff --git a/cumulus/parachains/runtimes/collectives/collectives-westend/src/lib.rs b/cumulus/parachains/runtimes/collectives/collectives-westend/src/lib.rs
index ab3d83fe435a1c666301d1e92a11ec40802e3c70..93ff506de97501dde137116a1d409992e408421f 100644
--- a/cumulus/parachains/runtimes/collectives/collectives-westend/src/lib.rs
+++ b/cumulus/parachains/runtimes/collectives/collectives-westend/src/lib.rs
@@ -722,7 +722,7 @@ pub type UncheckedExtrinsic =
 /// `OnRuntimeUpgrade`. Included migrations must be idempotent.
 type Migrations = (
 	// unreleased
-	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	// unreleased
 	cumulus_pallet_xcmp_queue::migration::v4::MigrationToV4<Runtime>,
 	// permanent
diff --git a/cumulus/parachains/runtimes/contracts/contracts-rococo/src/lib.rs b/cumulus/parachains/runtimes/contracts/contracts-rococo/src/lib.rs
index 8ac88476cd5c0f540142bddfcad0169de00d5bb8..f5313f892e0fced6df804f0b6137e3ad35f30e83 100644
--- a/cumulus/parachains/runtimes/contracts/contracts-rococo/src/lib.rs
+++ b/cumulus/parachains/runtimes/contracts/contracts-rococo/src/lib.rs
@@ -98,6 +98,8 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
+	pallet_collator_selection::migration::v1::MigrateToV1<Runtime>,
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	cumulus_pallet_parachain_system::migration::Migration<Runtime>,
 	cumulus_pallet_xcmp_queue::migration::v2::MigrationToV2<Runtime>,
 	cumulus_pallet_xcmp_queue::migration::v3::MigrationToV3<Runtime>,
diff --git a/cumulus/parachains/runtimes/coretime/coretime-rococo/src/lib.rs b/cumulus/parachains/runtimes/coretime/coretime-rococo/src/lib.rs
index 571c1d6bcb9c45ecdc3cc91c5774805e57dd1c47..bce3e6e8059289ffa3d8c6f91b39216437343173 100644
--- a/cumulus/parachains/runtimes/coretime/coretime-rococo/src/lib.rs
+++ b/cumulus/parachains/runtimes/coretime/coretime-rococo/src/lib.rs
@@ -108,6 +108,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	cumulus_pallet_xcmp_queue::migration::v4::MigrationToV4<Runtime>,
 	// permanent
 	pallet_xcm::migration::MigrateToLatestXcmVersion<Runtime>,
diff --git a/cumulus/parachains/runtimes/coretime/coretime-westend/src/lib.rs b/cumulus/parachains/runtimes/coretime/coretime-westend/src/lib.rs
index 7c6baa02ca62a4ff05ba5cee2ffd9f1203668c23..5c26055e5868d9f16603e7bbcc208ef23e088a6a 100644
--- a/cumulus/parachains/runtimes/coretime/coretime-westend/src/lib.rs
+++ b/cumulus/parachains/runtimes/coretime/coretime-westend/src/lib.rs
@@ -108,6 +108,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	cumulus_pallet_xcmp_queue::migration::v4::MigrationToV4<Runtime>,
 	// permanent
 	pallet_xcm::migration::MigrateToLatestXcmVersion<Runtime>,
diff --git a/cumulus/parachains/runtimes/people/people-rococo/src/lib.rs b/cumulus/parachains/runtimes/people/people-rococo/src/lib.rs
index af8ef0bf1386df2e246dd56aa1737aef3ca39eeb..c49854257c931b7a3edaa7ba27402977cba36885 100644
--- a/cumulus/parachains/runtimes/people/people-rococo/src/lib.rs
+++ b/cumulus/parachains/runtimes/people/people-rococo/src/lib.rs
@@ -102,6 +102,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	// permanent
 	pallet_xcm::migration::MigrateToLatestXcmVersion<Runtime>,
 );
diff --git a/cumulus/parachains/runtimes/people/people-westend/src/lib.rs b/cumulus/parachains/runtimes/people/people-westend/src/lib.rs
index 04bddadc5958738ff06c80d4417ffc74aaaf8b9e..31f5e4882adfe24f94e2e2f1357289ec9a0b102d 100644
--- a/cumulus/parachains/runtimes/people/people-westend/src/lib.rs
+++ b/cumulus/parachains/runtimes/people/people-westend/src/lib.rs
@@ -102,6 +102,7 @@ pub type UncheckedExtrinsic =
 
 /// Migrations to apply on runtime upgrade.
 pub type Migrations = (
+	pallet_collator_selection::migration::v2::MigrationToV2<Runtime>,
 	// permanent
 	pallet_xcm::migration::MigrateToLatestXcmVersion<Runtime>,
 );
diff --git a/prdoc/pr_4229.prdoc b/prdoc/pr_4229.prdoc
new file mode 100644
index 0000000000000000000000000000000000000000..05af8e062a32b5df8284f269159df53982412531
--- /dev/null
+++ b/prdoc/pr_4229.prdoc
@@ -0,0 +1,10 @@
+title: "Fix Stuck Collator Funds"
+
+doc:
+  - audience: Runtime Dev
+    description: |
+      Fixes stuck collator funds by providing a migration that should have been in PR 1340.
+
+crates:
+  - name: pallet-collator-selection
+    bump: patch