Call to protect 46,000 savers after pre-paid funeral firm Safe Hands goes under ahead of industry crackdown
Around 46,000 funeral savers whose provider went bust should have their money guaranteed by the Government, campaigners say.
Pre-paid funeral firm Safe Hands folded last week ahead of a crackdown on the industry by the regulator.
Rival provider Dignity has confirmed it will fulfil any funerals for Safe Hands customers who die before April 7.
Collapse: Pre-paid funeral firm Safe Hands folded last week ahead of a crackdown on the industry by the regulator
But there is no guarantee others will get money back, and many had paid for plans worth more than £3,000.
James Daley, managing director at Fairer Finance, is calling on the Government to ensure plan holders are compensated in full.
He says: ‘The Government should be doing much more to reassure customers at this uncertain time — including being willing to stand behind anyone who loses out.
‘It was a Government decision not to regulate funeral plans back in 2000, and it is the act of introducing regulation today that will potentially crystallise losses for thousands of elderly consumers.’
Martyn James, of complaints site Resolver, also called for the Treasury to back customers, adding: ‘Customers believed the money they paid would be protected.’
The Financial Conduct Authority (FCA) pledged to regulate the sector after a probe exposed evidence of misselling and unfair charges.
From July 29, any funeral plan provider not authorised by the FCA must cease trading.
But Safe Hands withdrew its application with the regulator last month.
Funeral plan customers typically pay between £3,000 and £5,000 to ensure their costs are covered when they die.
However, there is a shortfall between Safe Hands customer investments and forecasted funeral costs to be paid.
Administrator FRP will also investigate the conduct of the firm’s directors and why the business failed.
A Treasury spokesman says regulating pre-paid funeral plans will protect consumers from bad practice.
An FCA spokesman says: ‘We will support the administrators to see whether there is a longer-term solution for Safe Hands’ customers.’