Safe Hands Plans Ltd, a prominent UK provider of prepaid funeral plans, has entered administration, raising significant concerns for thousands of its customers. The company, based in Yorkshire, appointed FRP Advisory as administrators, citing financial difficulties that made it unable to continue trading.
This collapse comes ahead of new regulations set to be introduced by the Financial Conduct Authority (FCA) for the funeral plan sector from July 2022. While these new rules aim to provide greater consumer protection, current Safe Hands customers will unfortunately not be covered by them or by the Financial Services Compensation Scheme (FSCS), which protects consumers when financial firms fail.
Customers who have purchased a plan with Safe Hands are being advised to contact FRP Advisory directly for information regarding their prepaid arrangements. The administrators will be assessing the company's assets and liabilities, and exploring potential options for plan holders, though the outcome remains uncertain.
The collapse of Safe Hands underscores the historical lack of regulation in the prepaid funeral plan market, which has allowed some providers to operate without robust safeguards for customer funds. The government’s decision to bring the sector under FCA oversight was a direct response to concerns about consumer detriment and the need for greater transparency and security.
For those holding plans with other providers, this situation serves as a stark reminder to check the terms and conditions of their agreements, particularly regarding how customer funds are held and protected. From July, all funeral plan providers will need to be authorised by the FCA, meaning plans purchased after this date will benefit from enhanced consumer protections, including access to the FSCS in the event of a firm’s failure.
The Labour Party has previously called for stronger consumer protections in the financial services sector, and this incident will likely reignite calls for swift implementation and enforcement of the new FCA regulations. The government, through the Treasury, has emphasised that the upcoming regulatory regime will ensure that consumers can have confidence in the funeral plan market moving forward.