Pre-paid funeral plans are used by many people to cover the cost of funerals, they operate by paying money received either by instalments or lump sum payments to a funeral plan provider chosen by the customer. The funeral plan provider then invests the money paid into an insurance policy or an independent trust fund.

Pre-paid funeral plans are available to buy at most funeral directors in the UK.

Although the conditions of pre-paid funeral providers vary essentially the plan that is purchased should cover the full cost of a funeral paid for and should also fulfil the plan holder’s final wishes for any funeral arrangements.

Who regulates the funeral plan providers.

The current established regulator of funeral plan providers is the Funeral Planning Authority (FPA). However not all funeral plan providers are registered with the FPA. There is a list at: Funeral Planning Authority, Prepaid funeral plan providers.

Registered members must follow the FPA’s Rules and Code of Practice.

When are the pre-paid funeral providers to be regulated?

The Financial Conduct Authority will start to regulate providers that provide and arrange pre-paid funerals from 29 July 2022. 

From July all providers must apply to the FCA for authorisation. The FCA provides a list which shows the status of each provider. They also provide a list of existing providers who will not be applying for authorisation or have withdrawn their applications: providers who will not be authorised.

It’s vitally important to check these lists before purchasing a pre paid funeral plan.

What will happen once the funeral plan providers are regulated?

From 29 July 2022 all funeral plan providers must be authorised by the FCA. Any providers that aren’t authorised will be committing a criminal offence if they even attempt to sell or administer a funeral plan contract. This is because they won’t be able to deliver the plans that have been paid for.

Once regulated any complaints that are made may be referred to the Financial Ombudsman Service.

The FCA saying ‘We want to make sure that you have access to the Financial Services Compensation Scheme (FSCS) from the first day of regulation, so your money is protected if the firm fails.’ 

In July the FCA will introduce a range of measures to protect the consumer which will include a ban on pre-paid funeral companies from cold calling potential customers.

Why the need for regulation?

Safe Hands pre-paid funeral plans went into Administration in March 2022, upon doing so they withdrew their application for FCA authorisation in February. Safe Hands was at one time registered with the Funeral Planning Authority but is no longer included in the FPA list of Prepaid funeral plan providers.

When Safe Hands pre-paid funeral plans went under administration its understood that they had approximately 46,000 plan holders. Because Safe Hands aren’t within the ombudsman’s jurisdiction they are unable to help any customers of Safe Hands Plans Limited.

At the time of writing the administrators estimate that the process of realising assets and issuing partial repayments to plan holders will be a significant undertaking. Thus being so it will take some time to complete. 

Is there any help for the customers of Safe Hands customers?

To help the plan holders the administrators will contact plan holders directly. if necessary for them to make a claim they will provide details of how to make a claim and what you can claim for.

Any plan holders that have paid any or of their funeral plan instalments via a credit card or have paid fully via credit card may be entitled to register a claim with their credit card provider under s75 of the Consumer Credit Act 1974.  

What Dignity PLC can do to help.

Dignity plc is one of the UK’s largest providers of funeral plans. They have sent a plan to the administrators that would allow them to cover some of the pre-paid funeral plans and will offer any support thats urgently needed to help families to find any solutions that will hopefully provide a solution so that any customers won’t be left without anything in place.

Economic Secretary to the Treasury, John Glen, expressed his gratitude to Dignity for stepping in “to provide funerals on behalf of Safe Hands’ customers in the immediate period after the firm entered into administration” and agreeing to do that “for a further six months”.

What you can do.

If you have purchased a pre-paid funeral check who you purchased it from. If you find that you have purchased it from Safe hands then follow the advice given above to see if you can get any of your payments back.

It’s despicable that vulnerable people and their families have been treated in this manner, hopefully the regulation in July 2022 will prevent this from happening again.

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