Inquiry call after funeral plan firm collapsed owing £70 million to distressed families

The company collapsed in mysterious circumstances l eaving some 46,000 people out of pocket, yet – to date – no action has been taken against the executives or owners

Campaigners are demanding an inquiry into firms offering pre-paid funeral plans following the collapse of one company that left British families empty-handed. The failure of Safe Hands Plans Ltd left tens of thousands of people without both their money and the peace of mind offered when buying a funeral plan to cover the costs surrounding a death.

The company collapsed in mysterious circumstances in 2022 leaving some 46,000 people out of pocket, yet – to date – no action has been taken against the executives or owners. The Serious Fraud Office (SFO) opened an investigation into the company in October 2023, however, the victims are concerned about slow progress in holding the owners of the business to account.

Now, the consumer group Fairer Finance is pushing the new government to carry out a public inquiry into the funeral plan sector following the failure of Safe Hands and a second firm called One Life. Fairer Finance said both the Treasury and city watchdogs at the Financial Services Authority effectively ignored a series of warnings about the firms involved.

James Daley, managing director of Fairer Finance, said: “It is vital that we have a full public inquiry into the failures of government and regulators that allowed so many consumers to lose millions. The substantial losses faced by funeral plan-holders were entirely avoidable. Indeed, when the Treasury legislated to first protect funeral plan customers in 2001, it was its stated intention to ensure that customers’ money would be safe.

“Sadly, poorly drafted legislation and a lack of clarity for the Financial Services Authority created the conditions for funeral plan firms to play fast and loose with customers’ money.

Both the Treasury and the FCA were warned about potential issues with Safe Hands as early as 2017, but no action was taken. If an intervention had happened then, the sale to Safe Hands and the alleged fraud that followed may never have occurred.”

He added: “Now, two years after the collapse of Safe Hands, while the Serious Fraud Office is conducting a criminal investigation, there has still been no examination of the legislative and regulatory failures that contributed to this disaster. No one has been held accountable, and tens of thousands of vulnerable individuals remain out of pocket.”

Margaret and David Fee, from Ratby, Leicestershire, spent thousands of pounds on pre-paid funeral plans to lessen the trauma for their loved ones when they died. Margaret - a former bereavement services officer with the NHS - said the cost of the plans, which was more than £5,000, had been paid for from David's pension pot.

Margaret, aged 78, told the BBC, that payments for what is now a worthless funeral plan had left a black hole in their finances. She said: "I think they want criminally prosecuting - to tell the truth … "They've caused so much pain to such a vulnerable age group."

And David, speaking tearfully as Margaret comforted him, said: "It gets you inside, stomach ulcers and that through worry, and all these things add up eventually. And sometimes you think, is it worth carrying on? But you've got to."

Gill Marshall, a retired grandmother of four, paid £4,000 for a Safe Hands funeral plan. She said: “You thought you were set up, and then not only have you not got a funeral plan, but you haven't got the money to put it into another one."

The Financial Conduct Authority said it had limited powers to regulate funeral firms at the time Safe Hands failed. A Treasury spokesperson said: "Once concerns were raised about the funeral plan market, we made it illegal to sell pre-paid funeral plans without authorisation from the Financial Conduct Authority – protecting 1.6 million customers and their families."

The Serious Fraud Office said its "active criminal investigation into alleged fraud" by Safe Hands and its parent company SHP Capital Holdings Limited is progressing.