Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will introduce a package of protection for previous policy holders with Safe Hands Funeral Plans.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA) from 29 July 2022. When FCA regulation takes effect, funeral plan providers will need to be authorised by the FCA in order to enter into or carry out funeral plan contracts.

Safe Hands Plans has recently gone into administration. The government understands that this development will be concerning for customers of Safe Hands and continues to monitor the implementation of regulation in this sector closely.

I was very pleased to see Dignity’s recent commitment to provide ongoing support to Safe Hands’ customers for the next six months. This will ensure that any planholders who pass away during this time will receive a funeral without any additional charge.

While the FCA does not yet regulate funeral plan providers, it is supporting the administrators and the wider industry as they look to find a longer-term solution for Safe Hands’ customers.

It is unfortunate but unavoidable that bringing a previously unregulated sector into regulation – whatever form that may take – creates a possibility that some providers are not able to meet the threshold for authorisation. However, a well-regulated market should promote effective competition and drive better outcomes for consumers in the long-term.

Where a provider is unable to obtain FCA authorisation because of underlying issues, it is important to understand that this is not an issue created by bringing the sector into regulation. Rather, bringing the sector into regulation exposes these unsustainable business models and prevents these problems from getting worse.

The government understands that the rising cost of living is making life harder for people. These are global challenges: however, as set out in the Spring Statement, the government is providing support worth over £22 billion in 2022-23 to help families with these pressures.