Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to funeral plans coming under the the Financial Services Compensation Scheme as of 29 July 2022, whether previous Safe Hands Funeral Plans policy holders will be retrospectively awarded compensation equivalent to what they would be due under the Financial Services Compensation Scheme.

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. This will ensure that, for the first time, consumers are protected by compulsory and robust regulation.

Safe Hands Plans went into administration in March 2022. The government understands that this will be concerning for customers of Safe Hands and continues to monitor the implementation of regulation in this sector closely.

Dignity’s recent commitment to provide ongoing support to Safe Hands’ customers until November 2022 is welcome. This will ensure that any planholders who pass away during this time will receive a funeral without any additional charge.

Prior to the firm going into administration, Safe Hands Plans was not an authorised financial services firm. The Financial Services Compensation Scheme (FSCS) is the UK’s compensation scheme of last resort and pays compensation to consumers in respect of claims made in connection with regulated activities when authorised financial services firms fail. Extending the protection of the FSCS – which is funded by a levy on financial services firms – to unregulated firms would send an inappropriate and unhelpful message.

When the pre-paid funeral plan sector comes into regulation on 29 July, FSCS protection will apply for customers of firms that have obtained FCA authorisation, customers whose plans are transferred to such firms, and customers who buy funeral plans from such firms in the future.