The pre-paid funeral plan provider Safe Hands has gone into administration and as a result, it is no longer accepting new applications for funeral plans but is looking to assist those who have an existing Safe Hands funeral plan. In this article, we look at what you can do if you have an existing Safe Hands funeral plan and what to do if you have organised a funeral where the account holder had a funeral plan with Safe Hands.
What is a pre-paid funeral plan?
A pre-paid funeral plan allows you to pay for the cost of your funeral and this can be done via an upfront cost or a monthly plan. The idea of a funeral plan is to remove the financial burden from your relatives when you pass away but it is not the only way to cover the cost of a funeral when you die. You can find out more information on funeral plans, how they work and how they compare to life insurance in the following article, 'Life insurance or funeral plan: Which is best?'
Why has Safe Hands gone into administration?
Safe Hands has gone into administration due to a 'period of severe financial challenge, which has left the business unsustainable in its current form.' Safe Hands has also stated that this is due to a number of factors some of which may be linked to the coronavirus pandemic. Safe Hands are currently exploring other potential opportunities to rescue the business with the help of other funeral plan providers.
What to do if you have an existing Safe Hands funeral plan
If you have an existing Safe Hands funeral plan you will be contacted in the next 7 days via post with written confirmation and further details regarding the company's administration. Safe Hands cannot currently confirm as to whether existing Safe Hands funeral plans will be fulfilled and the company says that existing customers should consider their funeral plans as cancelled with immediate effect.
Safe Hands says it is looking for alternate solutions including the transfer of existing funeral plans to other providers and customers will be contacted with more information in due course. Safe Hands has, however, reached a temporary 14-day agreement with funeral services provider Dignity which it is currently reviewing. Despite this, Safe Hands has put measures in place to prevent payments from being taken for existing funeral plans and customers are being advised to contact their banks and cancel direct debits and standing orders.
What to do if your relation has died and had a funeral plan with Safe Hands
Funerals due to go ahead in the next 14 days that are being paid for by a Safe Hands funeral plan will be arranged by funeral services provider Dignity as agreed by the joint administrators of Safe Hands. Despite this, Safe Hands funeral plan holders are still being advised to make a claim with Safe Hands as creditors in the administration. All plan holders will be contacted in due course with information on how to do this. Meanwhile, Safe Hands says it is trying to look for a more permanent solution.
Will I get my money back for my Safe Hands funeral plan?
All Safe Hands funeral plan holders are advised to raise a claim with Safe Hands and will be contacted on how claims can be submitted. How much money you will get back for your funeral plan is not yet known and according to the Safe Hands website 'there is a shortfall between the level of plan holder investments and the forecast level of funeral plan costs to be paid. Essentially, the value of the investments is not enough to meet the funeral plan obligations of the Company'.
If you have paid any amount of your funeral plan on your credit card you may be eligible to claim under Section 75 of the Consumer Credit Act 1974. Contact your credit card provider to find out if you are eligible to claim.
Are pre-paid funeral plans regulated?
Currently, funeral plan providers do not have to be regulated by the Financial Conduct Authority and as a result, are not likely to be protected by the Financial Services Compensation Scheme (FSCS) in the event that they go bust. Safe Hands funeral plans were not regulated by the FCA but were an appointed representative of a regulated firm up until 13th January 2021.
However, a change of law which is being enforced from 22nd July 2022 means that all funeral plan providers will have to be regulated by the FCA going forward. This is to ensure that consumers are receiving a fair product and prior to July the FCA are conducting reviews of funeral plan providers that have submitted applications to be regulated. Those that are not applying for regulation will have to cease trading before 22nd July 2022.
Having a funeral plan provider regulated by the FCA will mean that consumers will have FSCS protection and the ability to complain to the Financial Ombudsman should the provider go bust. For more information on the new rules and what FSCS protection means for funeral plans, read our article What is the Financial Services Compensation Scheme (FSCS)?